What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-27 compared with 2022-02-25 · 145 added, 149 removed, 298 unchanged (50% of the section changed)

First person pronouns used in this Report, such as “we,” “us,” and “our,” refer to ICU Medical, Inc.

First person pronouns used in this Annual Report on Form 10-K, such as “we,” “us,” and “our,” refer to ICU Medical, Inc.

(“ICU”) and its subsidiaries unless context requires otherwise.

Changes from Prior Periodic Reports

In this report we have complied with the disclosures required by the Securities and Exchange Commission ("SEC") release No.

33-10890 "Management's Discussion and Analysis, Selected Financial Data, Supplementary Financial Information."

Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information

In November 2020, the SEC issued Release No.

33-10890, “Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information” which became fully effective on August 9, 2021.

This release was adopted to modernize, simplify, and enhance certain financial disclosure requirements in Regulation S-K.

Specifically, the SEC eliminated the requirement for selected financial data, only requiring quarterly disclosure when there are retrospective changes affecting comprehensive income, and amending the matters required to be presented under Management’s Discussion and Analysis (“MD&A”) to, among other things, eliminate the requirement of the contractual obligations table.

We have eliminated from this document the items discussed above that are no longer required.

Information on our contractual obligations is still disclosed in a narrative within the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this report.

Company Background and Overview of Business

ICU is one of the world's leading pure-play infusion therapy companies with global operations and a wide-ranging product portfolio that includes IV solutions, IV smart pumps with pain management and safety software technology, dedicated and non-dedicated IV sets and needlefree connectors designed to help meet clinical, safety and workflow goals.

In addition, ICU manufactures automated pharmacy IV compounding systems with workflow technology, closed system transfer devices for preparing and administering hazardous IV drugs and cardiac monitoring systems for critically ill patients.

ICU develops, manufactures and sells innovative medical products used in infusion therapy, vascular access, and vital care applications.

ICU's product portfolio includes ambulatory, syringe, and large volume IV pumps and safety software;

dedicated and non-dedicated IV sets, needlefree IV connectors, peripheral IV catheters, and sterile IV solutions;

closed system transfer devices and pharmacy compounding systems;

as well as a range of respiratory, anesthesia, patient monitoring, and temperature management products.

Headquartered in San Clemente, California, ICU was founded in 1984.

In 1992, we had our initial public offering and reincorporated under Delaware law.

Our primary customers are acute care hospitals, wholesalers, ambulatory clinics and alternate site facilities, such as outpatient clinics, home health care providers, and long-term care facilities.

Since our inception we have grown organically and through acquisition, and we currently serve customers in more than 90 countries throughout the world.

Since our inception we have grown organically and through acquisition.

In February 2017, we acquired Pfizer Inc.’s (“Pfizer”) Hospira Infusion Systems (“HIS”) business.

3 unchanged sentences

Pursuit’s primary product is the ClearGuard ® HD cap, which is used for the maintenance of hemodialysis catheters.

In September 2021, we entered into a definitive agreement to acquire Smiths Medical 2020 Limited ("Smiths Medical"), the holding company of Smiths Group plc's global medical device business and, on January 6, 2022, the acquisition closed.

The Smiths Medical acquisition complements and broadens our existing product portfolio to include syringe and ambulatory infusion devices, vascular access, and vital care products, and significantly strengthens and expands our global market reach.

The following business discussion is as of December 31, 2021 and as such does not incorporate the Smiths Medical acquisition.

As of December 31, 2021, our primary product offerings are listed below, which we present in four product lines as follows:

In January 2022, we acquired Smiths Medical 2020 Limited (“Smiths Medical”), the holding company of Smiths Group plc’s global medical device business.

The Smiths Medical acquisition complemented and broadened our preexisting product portfolio by adding syringe and ambulatory infusion devices, vascular access, and vital care products, and significantly strengthened and expanded our global market reach.

As of December 31, 2022, our primary product offerings are listed below.

Our product offerings related to our Smiths Medical acquisition are listed separately as we integrate that business.

Infusion Consumables

Infusion therapy sets, used in hospitals and ambulatory clinics, consist of a tube running from a bottle or plastic bag containing a solution to a catheter inserted in a patient’s vein, that may or may not be used with an IV pump.

Our primary Infusion Consumable products are:

• Clave™ needlefree products , including the MicroClave, MicroClave Clear, and NanoClave™ brand of connectors, accessories, extension and administration sets used for the administration of IV fluids and medications and the Neutron catheter patency device, used to help maintain patency of central venous catheters;

• SwabCap and SwabTip disinfecting caps, used to protect and disinfect any needlefree connector, including competitive brands of connectors, and male luers;

• ClearGuard HD antimicrobial barrier caps for hemodialysis catheters;

• Tego TM hemodialysis connector used to cap and protect hemodialysis central venous catheter hubs.

Closed System Transfer Devices (“CSTD”) and hazardous drug compounding systems are used to prepare and deliver hazardous IV medications such as those used in chemotherapy, which, if released, can have harmful effects to the healthcare worker and environment.

Our products are:

Our primary products include:

• Clave™ needlefree products, including the MicroClave, MicroClave Clear, and NanoClave™ brand of connectors, accessories, extension and administration sets used for the administration of IV fluids and medications and the Neutron catheter patency device, used to help maintain patency of central venous catheters;

• ChemoLock TM CSTD, which utilizes a proprietary needlefree connection method, is used for the preparation and administration of hazardous drugs.

1 unchanged sentence

• ChemoClave TM , an ISO Connection standard and universally compatible CSTD used for the preparation and administration of hazardous drugs.

ChemoClave utilizes standard ISO luer locking connections, making it compatible with all brands of needlefree connectors and pump delivery systems.

ChemoClave utilizes standard ISO luer locking connections, making it

compatible with all brands of needlefree connectors and pump delivery systems.

ChemoClave also is used to limit the escape of hazardous drug or vapor concentrations, block the transfer of environmental contaminants into the system, and eliminate the risk of needlestick injury.

• Diana TM hazardous drug compounding system, an automated sterile compounding system that incorporates ChemoClave and ChemoLock CSTD consumables and IV workflow technology for the accurate, safe, and efficient preparation of hazardous drugs.

It is a user-controlled automated system that provides repeatable accuracy of drug mixes and minimizes clinician exposure to hazardous drugs while helping to maintain the sterility of the drugs being mixed.

The preparation of hazardous drugs typically takes place in a pharmacy where drugs are removed from vials and prepared for delivery to a patient.

9 unchanged sentences

Also, in 2021, 2022 and 2023, the Plum 360 won the award as the top-performing Smart Pump EMR-Integrated.

• LifeCare PCA™ :

The LifeCare PCA infusion pump is an ICU Medical MedNet™ ready patient-controlled analgesia pump ("PCA"), providing complete IV Electronic Health Records ("IV-EHR") interoperability since 2016.

IV Medication Safety Software:

19 unchanged sentences

• SafeSet™ closed blood sampling and conservation system.

Infusion Systems-Smiths Medical

We offer a wide range of infusion pumps, disposables and safety software for use in both hospital and home settings.

These products participate in adjacent categories to the legacy ICU Medical Infusion Systems product line.

The primary Infusion Systems-Smiths Medical products are:

Ambulatory Infusion Hardware:

• CADD ® ambulatory infusion pumps and disposables, including administration sets and medication cassette reservoirs, support a variety of IV pain management therapies across clinical care areas from hospital to outpatient treatment.

Syringe Infusion Hardware:

• Medfusion TM syringe infusion pumps are designed for the administration of fluids and medication requiring precisely controlled infusion rates from a variety of syringe sizes in acute care settings.

Infusion Software:

• PharmGuard ® Medication Safety Software for MedfusionTM 4000 syringe and CADD™ Solis pumps allows for customized drug libraries to support the standardization of protocols for medication administration throughout the facility.

Vascular Access-Smiths Medical

Our Vascular Access-Smiths Medical products allow clinicians to safely access the patients’ bloodstream to deliver fluids and medication or to obtain blood samples.

Vascular Access products are often used in conjunction with Consumables and Infusion Systems devices.

Our primary Vascular Access products are:

• Jelco ® safety and conventional peripheral IV catheters, sharps safety devices for hypodermic injection, and venipuncture blood collection and peripheral IV catheters designed to help prevent needlestick injury and to reduce the risks associated with blood exposure and contamination while reducing patients’ risk of infection;

• DELTEC ® implantable ports and GRIPPER® non-coring needles for portal access;

• Portex ® arterial blood sampling syringes, anesthesia trays and kits for pain management;

• Powerwand ® midline catheters;

• MEDEX ® LogiCal ® Pressure Monitoring System and components.

Vital Care-Smiths Medical

We offer a range of devices and systems to maintain patients’ airways and body temperature before, during and after surgery.

Our primary Vital Care products are:

• Level 1 ® temperature management systems used in perioperative and critical care settings to help monitor and regulate patient temperature through rapid infusion, routine blood and fluid warming, irrigation warming and convective warming.

• Portex ® acapella ® bronchial hygiene products used to mobilize pulmonary secretions to facilitate the opening of airways in patients with chronic respiratory diseases such as chronic obstructive pulmonary disease ("COPD"), asthma and cystic fibrosis.

• Portex ® Bivona ® tracheostomy tubes in PVC and silicone construction that provide a secure airway for both surgical and percutaneous procedures.

Our silicone tracheostomy tubes are customizable to accommodate unique patient requirements.

Financial information relating to our reporting segment and primary product lines is set forth in Part II, Item 7.

1 unchanged sentence

Manufacturing

As of December 31, 2021, we operate four primary manufacturing facilities globally, which are discussed in Part I, Item 2 of this report.

We operate four main service centers globally.

We also rely on certain outside manufacturers for certain product lines in Infusion Systems and IV Solutions.

Our four primary manufacturing sites are:

• La Aurora de Heredia, Costa Rica, which manufactures most of our infusion pumps and dedicated disposables, as well as a portion of our non-dedicated infusion consumables products;

• Ensenada, Mexico, which manufactures infusion consumables products;

• Salt Lake City, Utah, which produces primarily our proprietary brands of connector and CSTD components, and sends those products to Costa Rica or Mexico for finished goods assembly;

• Austin, Texas, which produces our IV Solutions products.

Additionally, we leverage a long-term supply agreement with Pfizer (described below) to provide additional IV Solution products to us.

We have four main regional device service centers in Sligo, Ireland;

Our manufacturing facilities are concentrated in the United States, Costa Rica, Mexico, and Czech Republic.

See Part I, Item 2 of this Annual Report on Form 10-K.

We also rely on certain outside manufacturers for certain product lines in Infusion Systems and we leverage a long-term supply agreement with Pfizer (described below) to provide additional IV Solution products to us.

In 2017, we entered into two Manufacturing and Supply Agreements ("MSAs") with Pfizer under which, (i) Pfizer agreed to manufacture and supply us with certain agreed upon products for an initial five-year term with a one-time two-year option to extend and (ii) we agreed to manufacture and supply Pfizer certain agreed upon products for a term of five or ten years depending on the product, with a one-time two-year option to extend.

The initial supply price under each MSA is annually updated and is in full consideration for all costs associated with the manufacture, documentation, packaging and certification of the products.

In January 2021, we amended our MSA with Pfizer whereby we agreed to manufacture and supply certain agreed upon products to Pfizer.

The amendment included a change to the term of the agreement to end on December 31, 2024 with Pfizer's unilateral election to extend through December 31, 2025.

Other changes included (i) changes to our level of supply of products to Pfizer, (ii) certain changes to our manufacturing lines, (iii) updates to our supply price with added volume price tiers for annual periods and (iv) certain minimum purchase requirements for certain products.

On February 1, 2022, effective as of January 1, 2022, upon our request, Pfizer executed a Product Addendum (the "Product Addendum") to our MSA agreement whereby Pfizer agreed to manufacture and supply to us certain agreed upon products subject to certain time and pricing terms and conditions.

The Product Addendum expired on November 30, 2022.

We operate regional device service centers, in a number of locations, including Salt Lake City, Utah, U.S., Sligo, Ireland;

San Laurent, Quebec, Canada;

Taipei, Taiwan and Rydalmere, Australia.

In 2017, we entered into two Manufacturing and Supply Agreements ("MSAs") with Pfizer under which, (i) Pfizer manufactures and supplies us with certain agreed upon products for an initial five-year term with a one-time two-year option to extend and (ii) we manufacture and supply Pfizer certain agreed upon products for a term of five or ten years depending on the product, with a one-time two-year option to extend.

The initial supply price will be annually updated and is in full consideration for all costs associated with the manufacture, documentation, packaging and certification of the products.

In January 2021, we amended our MSA with Pfizer, whereby we manufacture and supply certain agreed upon products to Pfizer.

The amendments include a change to the term of the agreement to end on December 31, 2024 with Pfizer's unilateral election to extend through December 31, 2025.

Other changes to the terms of the MSA include (i) amendments to our level of supply of products to Pfizer, (ii) certain changes to our manufacturing lines, (iii) updates to our supply price with added volume price tiers for annual periods and (iv) certain minimum purchase requirements for certain products.

On February 1, 2022, effective as of January 1, 2022, upon our request, Pfizer executed a Product Addendum (the "Product Addendum") to our MSA agreement, whereby Pfizer manufactures and supplies to us certain agreed upon products.

The Product Addendum includes the supply of additional product to us subject to certain time and pricing terms and conditions.

The Product Addendum expires on November 30, 2022.

See Part I, Item 2 of this Annual Report on Form 10-K.

Raw Materials

We purchase many of the components and raw materials used in manufacturing our products from numerous suppliers in various countries.

Certain components and raw materials are available only from a sole supplier.

We work closely with our suppliers to ensure continuity of supply while maintaining high quality and reliability.

We have generally been able to obtain adequate supplies of such raw materials and components.

Certain components and raw materials are available only from a single supplier.We currently attempt to manage the risk associated with such suppliers by means of inventory management, relationship management and evaluation of alternative sources when feasible.See Item 1A.

Risk Factors - We are dependent on single and limited source third-party suppliers, which subjects our business and results of operations to risks of supplier business interruptions, and a loss or degradation in performance in our suppliers could have an adverse effect on our business and financial condition.

Sales, Marketing and Administration

We ship around the world with the majority of our sales denominated in United States ("U.S.") dollars, Euro and Canadian dollars.

We are not dependent on any single customer.

Our products are marketed to medical product manufacturers, independent distributors and directly to end users.

distribution of solutions, IV sets and accessories is supported by a network of two owned and one leased distribution centers, which include King of Prussia, Pennsylvania;

We sell globally through our own direct sales force and through independent distributors.

We currently serve customers in over 100 countries throughout the world.

The majority of our sales is denominated in United States ("U.S.") dollars and we have sales denominated in Euros, Canadian dollars, Japanese Yen, British Pound and Australian dollars as well as other currencies.

In 2022, we had worldwide net sales to Medline of 15% of consolidated net sales.

In 2021 and 2020, we did not have sales over 10% to any single customer.

Our products are marketed and distributed in the U.S.

and internationally to medical product manufacturers, independent distributors and directly to end users.

The distribution of our products in the U.S.

is supported by a network of owned and leased distribution centers, which include King of Prussia, Pennsylvania;

Los Angeles, California;

and Dallas, Texas.

Dallas, Texas and Olive Branch, Mississippi.

We also utilize a number of public warehouses as part of our supply chain.

3 unchanged sentences

The FDA regulates, among other things, the research, development, testing, manufacturing, approval, labeling, storage, recordkeeping, advertising, promotion and marketing, distribution, post-approval monitoring and reporting and import and export of drug products, medical devices and combination drug/device products in the U.S.

to assure the safety and effectiveness of such medical products for their

intended uses and otherwise meet the applicable requirements of the Federal Food, Drug and Cosmetic Act (“FDC Act”).

to assure the safety and effectiveness of such medical products for their intended uses and otherwise meet the applicable requirements of the Federal Food, Drug and Cosmetic Act (“FDC Act”).

The Federal Trade Commission ("FTC") also regulates the advertising of our products.

19 unchanged sentences

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) clearance or, depending on the modification, PMA approval or de novo classification.

The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k), de novo classification request or a PMA in the first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination.

The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k), de novo classification request or a PMA in the first instance, but the FDA can

review any such decision and disagree with a manufacturer’s determination.

If the FDA disagrees with a manufacturer’s determination not to seek a new 510(k) or other form of marketing authorization for the modification to the 510(k)-cleared product, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until 510(k) clearance or PMA approval is obtained or a de novo classification is granted.

6 unchanged sentences

In addition, the FDA will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers' or suppliers' facilities to ensure compliance with the QSR.

The FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended

The FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct additional clinical studies post-approval.

42 unchanged sentences

There also are continuing, annual program fees for any marketed products.

Drug manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.

Drug manufacturers and their subcontractors are required

to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide to use.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

Post-Market Enforcement

Post-Market Enforcement in the U.S.

The FDA may withdraw marketing authorizations for drugs or medical devices if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

1 unchanged sentence

Other potential consequences include, among other things:

permit the import or export of products, consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs, the issuance of corrective information, injunctions, or the imposition of civil or criminal penalties.

complete withdrawal of the product from the market, product recalls, fines, warning letters, untitled letters, clinical holds on clinical studies, refusal of the FDA to approve pending applications or supplements to approved applications, product seizures or detention, refusal to permit the import or export of products, consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs, the issuance of corrective information, injunctions, or the imposition of civil or criminal penalties.

In addition, the FDA closely regulates the marketing, labeling, advertising and promotion of drugs and medical devices.

8 unchanged sentences

Pursuing marketing of medical devices in the EU will notably require that our devices be certified under the new regime set forth in the EU Medical Devices Regulation when our current certificates expire.

Medical Devices Directive

EU Medical Devices Directive

Under the EU Medical Devices Directive, all medical devices placed on the market in the EU must meet the relevant essential requirements laid down in Annex I to the EU Medical Devices Directive, including the requirement that a medical device must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others.

6 unchanged sentences

As a general rule, demonstration of conformity of medical devices and their manufacturers with the essential requirements must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use.

Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence.

claims made about the performance and safety of the device are supported by suitable evidence.

Except for low-risk medical devices (Class I non-sterile, non-measuring devices), where the manufacturer can self-declare the conformity of its products with the essential requirements (except for any parts which relate to sterility or metrology), a conformity assessment procedure requires the intervention of a notified body.

5 unchanged sentences

In particular, there will be a new audit by the notified body before it will renew the relevant certificate(s).

Medical Devices Regulation

EU Medical Devices Regulation

The regulatory landscape related to medical devices in the EU recently evolved.

4 unchanged sentences

The EU Medical Devices Regulation became effective on May 26, 2021.

The new Regulation among other things:

• strengthens the rules on placing devices on the market (e.g.

reclassification of certain devices and wider scope than the EU Medical Devices Directive) and reinforces surveillance once they are available;

• establishes explicit provisions on manufacturers' responsibilities for the follow-up of the quality, performance and safety of devices placed on the market;

• establishes explicit provisions on importers' and distributors' obligations and responsibilities;

• imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the new regulation;

• improves the traceability of medical devices throughout the supply chain to the end-user or patient through the introduction of a unique identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk;

• sets up a central database (Eudamed) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU;

• strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.

Devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 may generally continue to be made available on the market or put into service until May 26, 2025, provided that the requirements of the transitional provisions are fulfilled.

13 unchanged sentences

These reports will have to be submitted through Eudamed – once functional – and aim to ensure that, in addition to reporting to the relevant authorities of the EU member states, other actors such as the economic operators in the supply chain will also be informed.

Until Eudamed is

fully functional, the corresponding provisions of the EU Medical Devices Directive continue to apply.

Until Eudamed is fully functional, the corresponding provisions of the EU Medical Devices Directive continue to apply.

A serious incident is defined as any malfunction or deterioration in the characteristics or performance of a device made available on the market, including use-error due to ergonomic features, as well as any inadequacy in the information supplied by the manufacturer and any undesirable side-effect, which, directly or indirectly, might have led or might lead to the death of a patient or user or of other persons or to a temporary or permanent serious deterioration of a patient's, user's or other person's state of health or a serious public health threat.

Manufacturers are required to take FSCAs defined as any corrective action for technical or medical reasons to prevent or reduce a risk of a serious incident associated with the use of a medical device that is made available on the market.

Manufacturers are required to take FSCAs defined as any corrective action for technical or medical

reasons to prevent or reduce a risk of a serious incident associated with the use of a medical device that is made available on the market.

An FSCA may include the recall, modification, exchange, destruction or retrofitting of the device.

9 unchanged sentences

Certain countries also mandate implementation of commercial compliance programs.

In the EU, regulatory authorities have the power to carry out announced and, if necessary, unannounced inspections of companies, as well as suppliers and/or sub-contractors and, where necessary, the facilities of professional users.

Failure to comply with regulatory requirements (as applicable) could require time and resources to respond to the regulatory authorities’ observations and to implement corrective and preventive actions, as appropriate.

Regulatory authorities have broad compliance and enforcement powers and, if such issues cannot be resolved to their satisfaction, can take a variety of actions, including untitled or warning letters, fines, consent decrees, injunctions, or civil or criminal penalties.

The aforementioned EU rules are generally applicable in the European Economic Area ("EEA") which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.

1 unchanged sentence

England, Wales and Scotland) medical device market according to the requirements provided in the Medical Devices Regulations 2002 (SI 2002 No 618, as amended) that sought to give effect to the three pre-existing EU directives governing active implantable medical devices, general medical devices and in vitro diagnostic medical devices whereas Northern Ireland continues to be governed by EU rules according to the Northern Ireland Protocol.

Following the end of the United Kingdom's ("UK's") withdrawal from the EU ("Brexit") transitional period on January 1, 2021, new regulations require medical devices to be registered with the MHRA (but manufacturers were given a grace period of four to 12 months, depending on the classification of the device, to comply with the new registration process) before being placed on the Great Britain market.

Following the end of the United Kingdom's ("UK's") withdrawal from the EU ("Brexit") transitional period on January 1, 2021, new regulations require all medical devices to be registered with the MHRA before being placed on the Great Britain market.

The MHRA only registers devices where the manufacturer or their UK responsible person has a registered place of business in the UK.

Manufacturers based outside the UK need to appoint a UK responsible person that has a registered place of business in the UK to register devices with the MHRA in line with the grace periods.

By July 1, 2023, in Great Britain, all medical devices will require a UK Conformity Assessed ("UKCA") mark but CE marks issued by EU notified bodies will remain valid until this time.

Manufacturers may choose to use the UKCA mark on a voluntary basis until June 30, 2023.

Beginning January 1, 2022, manufacturers based outside the UK need to appoint a UK responsible person that has a registered place of business in the UK to register devices with the MHRA.

On June 26, 2022, the MHRA published its response to a 10-week consultation on the post-Brexit regulatory framework for medical devices and diagnostics.

MHRA seeks to amend the UK Medical Devices Regulations 2002 (which are based on EU legislation, primarily the EU Medical Devices Directive and the EU In Vitro Diagnostic Medical Devices Directive 98/79/EC), in particular to create a new access pathway to support innovation, create an innovative framework for regulating software and artificial intelligence as medical devices, reform IVD regulation and foster sustainability through the reuse and remanufacture of medical devices.

Regulations implementing the new regime were originally scheduled to come into force in July 2023, but have recently been postponed to July 2024.

Devices bearing CE marks issued by EU notified bodies under the MDR or MDD are now subject to transitional arrangements.

In its consultation response, the MHRA indicated that the future UK regulations will allow devices certified under the MDR to be placed on the market in Great Britain under the CE mark until either the certificate expires or for five years after the new regulations take effect, whichever is sooner.

Devices certified under the MDD could continue to be placed on the market until either the certificate expires or for three years after the new regulations take effect, whichever is sooner.

Following these transitional periods, it is expected that all medical devices will require a UK Conformity Assessed ("UKCA") mark.

Manufacturers may choose to use the UKCA mark on a voluntary

basis until June 30, 2023.

However, UKCA marking will not be recognized in the EU.

1 unchanged sentence

Compliance with this legislation is a prerequisite to be able to affix the UKCA mark to our products, without which they cannot be sold or marketed in Great Britain.

An MHRA public consultation was opened until end of November 2021 on the post-Brexit regulatory framework for medical devices and diagnostics.

The regime is expected to come into force in July 2023, coinciding with the end of the acceptance period for EU CE marks in Great Britain, subject to appropriate transitional arrangements.

The consultation indicated that the MHRA

will publish guidance in relation to the changes to the regulatory framework and may rely more heavily on guidance to add flexibility to the regime.

In addition, the trade deal between the UK and the EU generally provides for cooperation and exchange of information between the parties in the areas of product safety and compliance, including market surveillance, enforcement activities and measures, standardization-related activities, exchanges of officials, and coordinated product recalls.

21 unchanged sentences

• the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information;

• the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children's Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services ("CMS") information related to payments or other "transfers of value" made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain health care professionals (physician assistants, nurse practitioners, clinical nurse

specialists, anesthesiologist assistants, certified registered nurse anesthetists, anesthesiology assistants and certified nurse midwives), and teaching hospitals and ownership and investment interests held by the physicians described above and their immediate family members;

payments or other "transfers of value" made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician health care professionals (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists, anesthesiology assistants and certified nurse midwives), and teaching hospitals and ownership and investment interests held by the physicians described above and their immediate family members;

• analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers;

7 unchanged sentences

Third-party payors are increasingly reducing coverage and reimbursement for certain healthcare services and products and challenging prices charged for healthcare services and products.

Health Care Reform

Health Care Reform in the U.S.

In the U.S., there have been, and we expect that there will continue to be, a number of federal and state proposals to limit payments by governmental payors for medical devices, and the procedures in which medical devices are used.

6 unchanged sentences

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013, and will stay in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021 unless additional Congressional action is taken.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers, which went into effect on April 1, 2013, and will stay in effect through 2031, with the exception of a temporary suspension from May 1, 2020 through March 31, 2021 unless additional Congressional action is taken.

On January 2, 2013, the American Taxpayer Relief Act of 2012, was signed into law, which, among other things, further reduced Medicare payments to several providers, including hospitals.

We cannot predict whether future healthcare initiatives will be implemented at the federal or state level or internationally, or the effect any future legislation or regulation will have on us.

Such legislation and regulation of healthcare costs may, however, result in decreased lower reimbursements by governmental and private payors to our customers, which may adversely affect our business, financial condition and results of operations.

Such legislation and regulation of healthcare costs may, however, result in decreased lower reimbursements by

governmental and private payors to our customers, which may adversely affect our business, financial condition and results of operations.

EU Healthcare Reform

Additional healthcare reform measures in the EU may be adopted in the future as well.

For instance, in December 2021, Regulation (EU) No 2021/2282 on Health Technology Assessment (“HTA”) amending Directive 2011/24/EU, was adopted.

This regulation which entered into force in January 2022 intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and providing the basis for cooperation at the EU level for joint clinical assessments in these areas.

The regulation foresees a three-year transitional period and will permit EU member states to use common HTA tools, methodologies, and procedures across the EU, working together in four main areas, including joint clinical assessment of the innovative health technologies with the most potential impact for patients, joint scientific consultations whereby developers can seek advice from HTA authorities, identification of emerging health technologies to identify promising technologies early, and continuing voluntary cooperation in other areas.

Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement.

Data Privacy and Security

3 unchanged sentences

In addition, certain foreign laws govern the privacy and security of personal data, including health-related data.

For example, the General Data Protection Regulation ("GDPR") imposes strict requirements for processing the personal data of individuals within the EEA.

Further, from January 1, 2021, companies have had to comply with the GDPR and also the UK GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.

The UK GDPR mirrors the fines under the GDPR, i.e., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover.

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

In the EU, the GDPR went into effect in May 2018 and imposes stringent data protection requirements for controllers and processors of personal data of persons within the EEA.

The GDPR applies to any company established in the EEA as well as to those outside the EEA if they collect and use personal data in connection with the offering of goods or services to individuals in the EEA or the monitoring of their behavior.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

Data privacy laws in the EU and the EEA are developing rapidly and, in July 2020, the Court of Justice of the European Union ("CJEU") limited how organizations could lawfully transfer personal data from the EEA to the U.S.

by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on use of the standard contractual clauses ("SCCs").

While the CJEU upheld the adequacy of the SCCs, it made clear that reliance on them alone may not necessarily be sufficient in all circumstances.

Use of the SCCs must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place, however, the nature of these additional measures is currently uncertain.

The CJEU went on to state that if a competent supervisory authority believes that the SCCs cannot be complied with in the destination country and the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer.

The European Commission issued revised SCCs on June 4, 2021 to account for the decision of the CJEU and recommendations made by the European Data Protection Board.

The revised SCCs must be used for relevant new data transfers from September 27, 2021;

existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022.

There is some uncertainty around whether the revised clauses can be used for all types of data transfers, particularly whether they can be relied on for data transfers to non-EEA entities subject to the GDPR.

The revised SCCs apply only to the transfer of personal data outside of the EEA and not the UK;

the UK’s Information Commissioner’s Office launched a public consultation on its draft revised data transfers mechanisms in August 2021.

Since January 2021, companies have to comply with the GDPR and also the UK GDPR.

The relationship between the UK and the EU in relation to certain aspects of data protection law remains uncertain, and it is unclear how UK data protection laws and regulations will develop in the medium to longer term.

The European Commission has adopted an adequacy decision in favor of the UK, enabling data transfers from EU member states to the UK without additional safeguards.

However, the UK adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews/extends that decision, and remains under review by the Commission during this period.

In September 2021, the UK government launched a consultation on its proposals for wide-ranging reform of UK data protection laws following Brexit.

There is a risk that any material changes which are made to the UK data protection regime could result in the European Commission reviewing the UK adequacy decision, and the UK losing its adequacy decision if the European Commission deems the UK to no longer provide adequate protection for personal data.

Our industry is highly competitive.

We believe our ability to effectively compete in this industry will be determined by our ability to provide a wide breadth of cost-effective, high quality products.

We believe our ability to effectively compete in this industry is determined by our ability to provide a wide breadth of cost-effective, high quality products.

We believe the added breadth of our acquired product portfolios have increased our competitiveness as we can now provide a one-stop shop for customers and offer more flexible competitive pricing.

We also believe our acquired infusion pump product offering will enable us to pull through a larger volume of higher margin infusion consumables, and we believe we have a wider customer reach through our unified distribution channels.

We also believe our infusion pump product offering will enable us to achieve sales of a larger volume of higher margin infusion consumables, and we believe we have a wider customer reach through our unified distribution channels.

Infusion Consumables

3 unchanged sentences

Braun Medical, Inc.

Our CSTD used for the preparation and safe handling of oncology drugs, compete with similar products from BD, and EquaShield.

Our CSTD products and systems, used for the preparation and safe handling of oncology drugs, compete with similar products from BD and EquaShield.

We believe that our current CSTD product offering provides benefits over these competing systems in several areas related to safety, ease of use, quality, and cost;

however, ongoing innovation in this market space will be required.

Infusion Systems

however, ongoing innovation will be required to remain competitive in this market space.

Infusion Systems (Legacy ICU and Smiths Medical)

We face strong global competitors in the Infusion Systems market.

In the United States ("U.S.") our competitors include BD, Baxter, and to a lesser extent B.

In the United States ("U.S.") our competitors include BD, Baxter, Moog Medical, Fresenius and B.

Outside of the U.S., our primary competitors are BD, B.

2 unchanged sentences

The smart pump market in recent years has been troubled with security concerns and product recalls.

We believe our ability to effectively compete in this market segment will be determined by our ability to build our brand strength using the development of technological advancements aimed at increasing the quality, reliability, safety and security of our pumps while at the same time focusing on manufacturing efficiency and cost-effectiveness, which are operationally challenging with evolving product lines.

We believe our ability to effectively compete will be determined by our ability to build our brand strength using the development of technological advancements aimed at increasing the quality, reliability, safety and security of our pumps while at the same time focusing on manufacturing efficiency and cost-effectiveness, which are operationally challenging with evolving product lines.

We participate in the IV solutions market only in the U.S.

2 unchanged sentences

Demand for IV solutions is typically high and raw materials required to produce IV solutions are readily available.

Our ability to compete will depend on our ability to maximize production, develop innovations in our product line, focus on cost-effectiveness and our ability to maintain the appropriate quality infrastructure.

Our ability to compete will depend on our ability to maximize production, develop innovations in our product line, focus on cost-effectiveness and maintain the appropriate quality infrastructure.

Critical Care

Our primary competitor in Critical Care is Edwards Lifesciences.

and/or certain foreign patents and/or pending patent applications relating to the technologies found in the Clave / MicroClave connector, MicroClave Clear connector, Neutron connector, Tego connector, ChemoClave system, ChemoLock connector, SwabCap disinfecting cap, Diana hazardous drug compounding system, ClearGuard antimicrobial barrier cap, Cogent hemodynamic monitoring system, and other products.

With the acquisition of HIS, we acquired rights, title and interest to a substantial number of patents and patent applications and related provisionals, divisionals, continuations, continuations-in-part, reissues, reexaminations, extensions, and substitutions of any of the foregoing (“Patent Rights”), that were primarily used or held for use by Pfizer in the HIS business.

There is however, no single patent or group of patents that we acquired that we believe is material in relation to our business as a whole.

Since the acquisition, we have filed additional patent applications on technologies relating to infusion pumps, software for operating infusion pumps, and software for communicating information to and from infusion pumps.

Our success may depend in part on our ability to obtain patent protection for our products and to operate without infringing the proprietary rights of third parties.

Vascular Access-Smiths Medical

Our Vascular Access product line of Smiths Medical competes primarily with BD and B.

Braun as well as Angio Dynamics, Greiner Bio-One and Teleflex Incorporated.

Our ability to remain competitive in this market will depend on our ability to focus on demonstrable patient outcomes by differentiating our products by improving device functionality and by providing successful customer training programs on the use and maintenance of our products.

Vital Care-Smiths Medical

The Vital Care product line of Smiths Medical competes with numerous competitors due to its broad product portfolio.

Those include multinational competitors such as Philips Healthcare as well as smaller more focused competitors such as Belmont and Intersurgical plc.

Our ability to compete in this market will depend on our ability to continue to make technological advances to our products, thereby increasing customer efficiency, and provide product support aimed at improving clinical decision-making that ultimately enhances patient safety.

Many of our product lines rely on patent protection.

We have obtained U.S.

and foreign patents relating to certain of the technologies found in our products, and are pursuing additional patent applications.

There is however, no single patent or group of patents that we own that we believe is material in relation to our business as a whole.

Our success will depend in part on our ability to obtain, maintain and enforce patent protection for our products and to operate without infringing on the proprietary rights of third parties.

While we have obtained certain patents and applied for additional U.S.

and foreign patents covering certain of our products, there is no assurance that any additional patents will be issued, that the scope of any patent protection will prevent competitors from introducing similar devices or that any of our patents will be held valid if subsequently challenged.

Our patents are important in preventing others from introducing competing products that are as effective as our products.

The loss of patent protection on the Clave / MicroClave connector, Neutron connector, Tego connector, Swabcap disinfecting cap, Clearguard antimicrobial barrier cap, ChemoClave system, and ChemoLock connector could adversely affect our ability to exclude other manufacturers from producing effective competitive products and could have an adverse impact on our financial results.

and foreign patents covering certain of our products, there is no assurance that the scope of any patent protection will prevent competitors from introducing similar or competing devices or that any of our patents will be held valid if subsequently challenged.

We can also lose patent protection through expiration.

The inability to obtain effective patent protection or the loss of patent protection on a specific product line could adversely affect our ability to exclude other company from producing effective competitive products.

The loss of a significant portion of our patent portfolio could have an adverse impact on our financial results.

The fact that a patent is issued to us does not eliminate the possibility that patents owned by others may contain claims that are infringed by our products.

There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry.

Litigation, which would result in substantial cost to us and in diversion of our resources, may be necessary to defend us against claimed infringement of the rights of others and to determine the scope and validity of the proprietary rights of others.

Litigation, which would result in substantial cost to us and diversion of our resources, may be necessary to defend us against claimed infringement of the rights of others and to determine the scope and validity of the proprietary rights of others.

Adverse determinations in such litigation could subject us to significant liabilities to third parties or could require us to seek licenses from third parties and could prevent us from manufacturing, selling or using our products, any of which could have a material adverse effect on our business.

2 unchanged sentences

Seasonality/Quarterly Results

There are no significant seasonal aspects to our business.

We can experience fluctuations in net sales as a result of variations in the ordering patterns of our largest customers, which may be driven more by COVID-19 pandemic surges and its impact on hospital admissions and procedure volumes along with production scheduling and customer inventory levels, and less by seasonality.

Our expenses often do not fluctuate in the same manner as net sales, which may cause fluctuations in operating income that are disproportionate to fluctuations in our revenue.

Our business is not significantly impacted by seasonal aspects.

We can, however, experience fluctuations in net sales as a result of variations in the ordering patterns of our largest customers, which has been and may continue to be driven more by the COVID-19 pandemic surges and its impact on hospital admissions and procedure volumes along with production scheduling and customer inventory levels, as well as fluctuations due to supply constraints as a result of other macroeconomic

and global geopolitical events, such as the conflict in the Ukraine.

Our expenses do not typically fluctuate in the same manner as net sales, which may result in cause fluctuations in operating income that are disproportionate to fluctuations in our revenue.

Research and Development

Our research and development costs include personnel costs and expenses related to the development of new products.

We continue to invest in certain research and development ("R&D") projects to drive future growth and to remain competitive in our product lines.

Our main R&D facilities are located in the U.S and India.

Our R&D costs primarily include personnel costs and expenses related to the development of new products.

Research and development costs were $93.0 million in 2022, $47.5 million in 2021 and $42.9 million in 2020.

3 unchanged sentences

We believe the health and well-being of our employees are cornerstones for our successful operations.

Whether you are a machine operator in one of our four manufacturing locations, a material handler in a distribution center, a service technician supporting our products in the field, or a clinician training the use of our products in a hospital, we strive to prioritize the safety of our team members.

Whether you are a machine operator in one of our manufacturing locations, a material handler in a distribution center, a service technician supporting our products in the field, or a clinician training customers on the use of our products in a hospital, we strive to prioritize the safety of our team members.

This includes designing our work environments with a safety first mindset, providing personal protective equipment and safety training beginning day one.

Our ability to attract and retain talented individuals globally begins with our commitment to offer a career that gives people a unique opportunity to work in an exhilarating, fast-paced, inspiring, and collaborative environment where what they do makes a difference.

We offer competitive salaries and participation to all employees in incentive plans based on individual and company performance.

We offer competitive salaries and benefit packages to all employees as well as select participation in incentive plans based on individual and company performance.

We believe the development of our workforce is critical for personal growth and the success of our company as well.

2 unchanged sentences

This is principal for us in attracting, developing, retaining and rewarding talent on a global scale.

Finally, our leadership team, with its broad, and deep category knowledge and averaging approximately 17 years of experience in IV therapy has the necessary experience to effectively lead the execution of our strategy.

Finally, we believe that our leadership team, with its broad, and deep category knowledge and averaging approximately 22 years of experience in IV therapy has the necessary experience to effectively lead the execution of our strategy.

At December 31, 2022, we had approximately 14,500 employees located in over 35 countries.

2 unchanged sentences

"Financial Statements and Supplementary Data" of this Annual Report on Form 10-K in Notes 4 and 13 to the Consolidated Financial Statements, and is incorporated herein by reference.

COVID-19 Pandemic

In March 2020, the World Health Organization characterized a novel strain of coronavirus ("COVID-19") as a global pandemic.

The COVID-19 pandemic continues to have widespread and unpredictable impact on global economies, financial markets, and business practices, and continues to impact our business operations, including our employees, customers and suppliers.

See “Part II.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for discussion regarding the impact of the COVID-19 pandemic on our financial results.

Also, see “Part I.

Risk Factors” for discussion of the risks and uncertainties associated with the COVID-19 pandemic.

Available Information

Our website address is http://www.icumed.com.

We make available our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports free of charge on our website as soon as reasonably practicable after filing them with the Securities and Exchange Commission ("SEC").

We make available our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and other filings and amendments thereto those reports, free of charge on our website as soon as reasonably practicable after filing or furnishing them with the Securities and Exchange Commission ("SEC").

We also have our code of ethics posted on our website (http://www.icumed.com).

The information on our website is not incorporated into this Annual Report.

The information on our website is not incorporated into this Annual Report on Form 10-K.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on its website (http://www.sec.gov).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business