Becton Dickinson & Co

A global trend towards limiting growth of healthcare costs may also put industry-wide pressure on medical device or clinical diagnostic pricing. In the U.S., the Center for Medicaid Services ("CMS") has proposed the expansion of its Competitive Bidding Program ("CBP"). This proposed expansion would introduce a pricing model that could significantly influence the cost structure of some medical devices in the U.S. healthcare system; specifically, those reimbursed under CMS’ Durable Medical Equipment, Prosthetic, Orthotic and Supplies payment system. By leveraging supplier competition to establish payment rates, the CBP mirrors purchasing initiatives seen in international markets, where procurement strategies attempt to prioritize

cost-efficiency, which could lead to uncertainty with respect to innovation, quality and patient access challenges or supplier attrition, as seen in prior bidding cycles. In addition, we expect recently enacted and proposed changes under legislative debate to Medicare, Medicaid and the Affordable Care Act to impact healthcare coverage, all of which if implemented could adversely affect both the demand and prices customers are willing to pay for our products. Globally, governments in China and other countries continue to use various mechanisms to control healthcare expenditures, including increased use of competitive bidding and tenders, price regulation (such as volume-based procurement programs ("VoBP")), government imposed payback provisions, and changes in reimbursement practices and policies on average selling prices for our products, which have unfavorably impacted our revenues and may continue to impact our results of operations in certain countries.

Reductions in customers’ research budgets or government funding may adversely affect our business.

We sell products to researchers at pharmaceutical and biotechnology companies, academic institutions, government laboratories and private foundations. Research and development spending of our customers can fluctuate based on spending priorities and general economic conditions and customers could reduce research and development spending and/or delay or avoid purchases of our products in response to economic factors. A number of these customers are also dependent for their funding upon grants from U.S. government agencies, such as the U.S. National Institutes of Health and similar agencies in other countries. The level of government funding of research and development is unpredictable and we have seen a reduction in government funding in fiscal year 2025. The availability of governmental research funding has been, and may in the future be, adversely affected by policy changes, economic conditions and governmental spending reductions, including the downsizing or reduced funding of certain government agencies. Further, an extended federal government shutdown resulting from a failure to pass budget appropriations, adopt continuing funding resolutions or raise the debt ceiling, together with any other budgetary decisions limiting or delaying government spending, could negatively impact U.S. or global economic conditions.