Medtronic

Aktivs

In 2016, Medtronic includes more than 250 enterprises, commercial representative offices, research centers and administrative bodies.

Since 2014, the main offices of Medtronic plc are located in Ireland. At the same time, the operating headquarters of the company remains in Minneapolis (USA).

Medtronic's European headquarters are located in Tolochenaz, Switzerland.

In 2016, the company's technologies are used in the treatment of more than thirty chronic diseases affecting various areas and organs of the human body.

Medtronic has an extensive portfolio of products, focuses on diversified growth and is characterized by a wide territorial coverage: the company has over 88 thousand employees in more than 160 countries.

Company structure

2023: Merging Robot and Surgical Technology Units

On March 21, 2023, it became known that Medtronic, one of the world's largest manufacturers of medical devices, has merged the divisions for the production of robots and surgical technologies.

Mike Marinaro, who became president of Medtronic's surgical robotics operations division in 2022, is now executive vice president and president of Medtronic's surgical operations department, it was reported. The structure, the company's website says, combined "a legacy of surgical devices and new robotic intervention technology to overhaul the future of surgery."

Previously, Marinaro led the Surgical Robotics business, responsible for the growth and scaling of the corresponding division. In addition, Marinaro led the tachycardia, bradycardia and infection control teams, where he oversaw initiatives to bring implantable products to market. When exactly Medtronic appointed Marinaro to the post of president of the surgical operations department is not specified. According to some sources, this happened in February 2023, according to others - in March of the same year.

The change in organizational structure is designed to improve management efficiency and reduce costs. Medtronic seeks to minimize costs, which is especially important in the current macroeconomic situation. The merger of robot and surgical technology units comes amid a massive "big cost-cutting" initiative. It's unclear whether Medtronic has cut jobs in consolidating those departments. According to the company itself, its staff exceeds 95,000 employees in about 150 countries around the world. In general, Medtronic prefers not to go into details about the possible reduction in headcount.^[1]

Products

Defective and hazardous products

Main article: Defective and dangerous Medtronic products

Every year, Medtronic recalls many defective devices. Some patients have to have repeated surgeries to extract the dangerous product from their bodies. Read more here.

Defibrillators

• Medtronic defibrillators

Pacemakers

• Medtronic pacemakers

Neurostimulators

• Medtronic neurostimulators

Insulin pumps

• MiniMed Series

Consumables

Main article: Medtronic consumables

Performance indicators

Main article: Medtronic Financial Performance

2021: Revenue growth of 4.2%, to $30.12 billion, profit - $3.61 billion

At the end of fiscal 2021, Medtronic earned revenue of $30.12 billion, which is 4.2% more than a year earlier. Excluding the additional profit of $331 million, obtained due to currency fluctuations favorable for the company, as well as other one-time factors, sales increased by 2%.

In the division for the production of technologies for the treatment of cardiovascular diseases, annual revenue rose by 2.9%, to $10.77 billion. More than half of sales came from products that help people with heart rhythm disorders and heart failure. The implementation of solutions for the treatment of structural heart diseases and aorta problems has changed slightly over the year and amounted to $2.83 billion.

The second largest area of ​ ​ Medtronic's business was surgical products - their sales in 2021 to the financial year amounted to $8.74 billion, which is 4.6% higher than a year ago.

In the neurological direction, the company's turnover grew even stronger on an annualized basis - by 6.1%, to $8.2 billion. In the market for solutions for diabetes patients, Medtronic's revenue increased by 1.9% and reached $2.41 billion. The growth was largely due to a tangible increase in sales of insulin pumps amid the growing distribution of MiniMed 780G models around the world and MiniMed 770G in the United States. At the same time, the vendor noted a decrease in sales of consumables.

The largest market for the American manufacturer remains the United States. There, in the 2021 reporting year, the company earned $15.53 billion in revenue, which is 4.1% more compared to 2020. In other developed countries combined, sales grew by 5.7% to $9.82 billion, and in emerging markets the company showed an increase of 1.5% (to $4.78 billion).

Medtronic's net profit at the end of 2021 was $3.61 billion.^[2]

2020: Global Cardiovascular Treatment and Diagnosis Equipment Market Share - 20.4%

Medtronic's market share of cardiovascular treatment and diagnosis equipment was 20.4% (Evaluate data). Read more here.

Acquisitions of companies and sale of assets

Main article: Acquisitions of companies and sale of Medtronic assets

Like many other corporations, Medtronic grew through takeover deals. Chronicle of mergers here.

Business in Russia

Main article: Medtronic Russia

Medtronic has been present on the Russian market since the early 1990s, and as a Russian representative office since 2003.

Information Technology at Medtronic

Main article: Information Technology at Medtronic

Employee salaries

2019: Average salary in Lithuanian unit - €10,100

According to the Lithuanian Social Insurance Fund (SODRA), in June 2019, the Lithuanian division of Medtronic BV paid its employees an average of 10,100 euros "on paper."^[3]

2017: The average salary in the Lithuanian division is 8200 euros

The average salary in the Lithuanian division of Medtronic BV according to June 2017 is 8,200 euros per month^[4].

History

2024: Withdrawal from the IVL market

On February 20, 2024, the manufacturer of medical equipment Medtronic announced its intention to exit the business of producing artificial lung ventilation devices (IVL) due to the worsening financial situation. At the same time, changes will be made to the organizational structure of the company.

Medtronic CEO Jeff Martha announced the restructuring. According to him, the IVL business was actively developing during the COVID-19 pandemic against the background of a shortage of relevant medical devices. However, then the situation changed, and this direction began to become "increasingly unprofitable." Therefore, the company decided to curtail the production of ventilators. It is said that the closure of this business is in the interests of Medtronic, and the savings achieved will help in the development of more promising products.

Medtronic announced its intention to exit the business of producing artificial lung ventilation devices (IVL)

Following the reorganization, the remainder of the Patient Monitoring and Respiratory Interventions (PMRI) unit will be integrated into the Acute Care and Monitoring (ACM) group. She specializes in pulse oximeters, remote patient monitoring devices, breathing control systems and other products. At the same time, Medtronic will continue to fulfill its obligations under previously concluded contracts for the supply of ventilators.

The closure of the IVL direction is expected to increase investment in the ACM division, which, in the end, will help focus on profitable growth. In general, thanks to the reorganization, Medtronic will be able to adapt to the changed market situation and difficult macroeconomic conditions. Among the company's key business areas are insulin pumps for people with diabetes, cardiac surgery solutions, and equipment for use in neurosurgery and spinal surgery.^[5]

2023

Firing California employees as part of plan to "significantly cut costs"

On April 7, 2023, it became known that Medtronic, one of the largest manufacturers of medical devices, was forced to reduce the number of personnel.

According to resource MassDevice, Medtronic is restructuring to improve efficiency, business processes stimulate growth and "significantly reduce costs." A total of 59 employees in the unit in Sunnyvale (state) will be laid off. California

As we review the business structure, we need to make long-term changes to ensure the sustainability of the organisation. Earlier, we announced plans to close this facility [the Sunnyvale site], and after careful analysis and consideration of the current situation, we decided to curtail the activities of the facility in June 2023. In this regard, some positions in the state will be liquidated, Medtronic said in a statement.

Job cuts will begin in April 2023 and will last until September of the same year. Medtronic says it will provide employees being laid off with comprehensive support. If possible, some employees of the abolished division will be transferred to other structures of the company.

The closing division is linked to Epix Therapeutics, a developer of radiofrequency heart ablation technology that Medtronic bought for $316 million in 2019. In the current macroeconomic situation and the conditions of the crisis, Medtronic is forced to optimize business operations. In particular, the combination of the divisions of surgical robotics and surgical innovations of the company was carried out. In addition, there is talk of proposals for early retirement for some workers. As of the end of the closed fiscal year, Medtronic's workforce exceeded 95,000 employees worldwide.^[6]

Medtronic has created a company to develop kidney treatment technologies

On April 1, 2023, Medtronic and DaVita announced the formation of Mozarc Medical, which will specialize in the development of advanced kidney treatment technologies. Read more here.

2022

Monitor Business Branch

In late October 2022, Medtronic announced the spin-off of a product business to monitor patient conditions and respiratory interventions to the new company. It was named Medtronic NewCo. Read more here.

Launch of sales of wearable devices that detect symptoms of infectious diseases

On September 2, 2022, it became known that Medtronic had expanded its portfolio of patient monitoring devices with a partnership with BioIntelliSense. Medtronic will have exclusive distribution rights to BioButton's continuous monitoring wearable device, which BioIntelliSense developed. Read more here.

2021

Heart pump sales close after string of defective product recalls

In early June 2021, Medtronic announced it was discontinuing sales of its HeartWare Ventricular Assist Device (HVAD) heart pumps following a string of reviews of defective products. The company has notified customers of the need to switch to alternative mechanical circulatory support. Read more here.

Neurosurgeon in the United States will pay millions for kickbacks in the supply of Medtronic medical equipment

In early May 2021, the court sentenced the neurosurgeon [Wilson Asfora|Wilson Asfora]] for receiving kickbacks when supplying Medtronic medical equipment. The doctor and two medical device distributors he owns - Medical Designs and Sicage - agreed to pay $4.4 million to settle the charges. Read more here.

Opening of R&D Centre in India

In early April 2021, Medtronic announced the opening of a laboratory R&D in. India The Medtronic Development and Innovation Center (, Medtronic Engineering and Innovation Center MEIC) with an area of ​ ​ about 14 thousand square meters. m is located in Hyderabad (). India The company intends to spend $160 million over five years to turn Hyderabad into its largest research center outside. USA More. here

2020

Allocation of $3.8 million to support medical workers in connection with the COVID-19 pandemic

Medtronic and the Medtronic Foundation announced the allocation of additional funds in the amount of 3.8 million, dollars which will be aimed at supporting and protecting medical workers, providing operational assistance, psychological support and food assistance to needy organizations and communities in connection with the further growth of the pandemic COVID-19 and the trend towards food shortages. This became known in December 2020. Thus, the total amount of donations from the company aimed at providing assistance in connection with the COVID-19 pandemic exceeded $46 million.

More than 400,000 respirator masks and 430,000 respirators were donated as part of charitable donations. These personal protective equipment will be distributed by the International Medical Corps. Masks will be delivered to hospitals and medical institutions located at the epicenter of the spread of COVID-19, or will be transferred directly to people as part of preventive measures. In addition, these health facilities serve people from needy and vulnerable communities who are most at risk and most affected by the pandemic.

As the global pandemic does not slow down, our goal ─ to protect doctors who work fearlessly on the front lines, said Noel Colón, senior vice president of Medtronic's quality assurance division. - We are glad that we help medical workers who take the brunt of the fight against COVID-19, providing the most important assistance to everyone who needs it, is at risk and who is more affected by the pandemic.

Among the nonprofits receiving additional support from the Medtronic Foundation in the form of a $1.6 million grant package are those focused on providing prompt assistance to citizens from communities in need, for example, the African Fund to Combat COVID-19 (COVID-19 Action Fund for Africa), international non-profit organizations Americas, Direct Relief, the charity program Meals on Wheels and numerous food banks.

As the coronavirus pandemic spreads around the world, there are strong pressures on health care, food assistance and mental health. It is extremely important for us to quickly provide support to counteract the disproportionate impact of the virus on communities in need, "said Paurvi Bhatt, president of the Medtronic Foundation. - We are turning our words of gratitude into action by teaming up with our partners to address the challenges facing brave health professionals who now need help and care more than ever.

Medtronic to pay millions for kickbacks to doctors in form of restaurant dinners

At the end of October 2020, it became known that Medtronic will pay a total of about $9.2 million for kickbacks to doctors in the form of dinners in restaurants. Medtronic agreed to pay $8.1 million to settle charges in connection with kickbacks to a neurosurgeon from South Dakota, as well as an additional $1.11 million for refusing to provide accurate reports on these expenses.

Kickbacks undermine the integrity of federal health programs and increase the costs borne by taxpayers, "said acting Assistant Attorney General for Civil Affairs Jeffrey Bossert Clark. - [The Department of Justice] is trying to identify and clamp down on all improper financial relationships between medical manufacturers and doctors that may influence their decision-making.

Medtronic admitted that it paid for social events at Carnaval Brazilian Grill, an expensive restaurant owned by South Dakota neurosurgeon Wilson Asfora. Asfora responded by using Medtronic's SynchroMed II implantable intrathecal infusion pumps to administer drugs to patients. Medtronic sponsored events at the restaurant were neurosurgeon meetings with business partners, colleagues, as well as potential customers. In nine years, Medtronic paid for more than 100 events at Asfora's restaurant, according to a Justice Department release.

Asfora and his two companies became defendants in a separate lawsuit for receiving kickbacks. A court decision in this case has not yet been made. As part of the settlement, Medtronic agreed to cooperate with the Justice Department in this investigation and litigation. The company also took corrective action, including firing the sales representative and sales manager involved in the situation.^[7]

7 top technologies in Medtronic strategy

In late August 2020, Medtronic's new CEO Jeff Marta outlined plans for a more flexible and competitive company. Among other things, Martha spoke about a number of technologies that could be key to the growth of Medtronic.

1. Robots surgeons

The strategy of the Medtronic group of minimally invasive treatments will be based on the new Hugo system, which is designed to compete with Intuitive Surgical's da Vinci robots. Medtronic said it has dealt with previously detected crashes and plans to register the product in early 2021. Titan Medical has also entered into an agreement with Medtronic to develop robotic surgical technologies.

2. AI surgery

Medtronic intends to expand its line of AI surgery devices by integrating Digital Surgery technologies into the soft tissue robotic surgery system. In addition, Medtronic wants to implement Digital Surgery solutions in client decision support systems and in operating video devices. Medtronic also intends to use Medicrea's AI technology for surgical planning for spinal surgeries, as well as for custom spinal implants.

3. Micra Electrodeless Pacemaker

The Micra AV electrodeless pacemaker is equipped with a number of additional atrial sensing algorithms that allow you to record myocardial movement. Through this, Micra AV regulates pacemaking in the ventricle, coordinating it with atrial contractions. This allows synchronous AV stimulation for people with atrioventricular block who previously needed a two-chamber pacemaker.

4. Renal denervation

Once renal denervation was considered a promising treatment for hypertension, but its reputation suffered greatly in the mid-2010s, when a major clinical trial by Medtronic failed to prove its effectiveness. However, the company did not stop there and began to study possible distorting factors that were not taken into account in the study. As a result, Medtronic has resumed clinical trials of the Symplicity Spyral renal denervation system and is awaiting results in 2021.

5. Neurostimulation

The Medtronic InterStim Micro neurostimulator sends electrical impulses to the sacral nerves in the lower back, which improves bladder and intestinal control in incontinence patients. Thanks to new technologies, this neurostimulator is smaller than competitors, and it is faster and more convenient to charge it. In addition, Medtronic has released the Percept PC deep brain stimulation system, which allows EEG recording during therapy.

6. Innovative mechanical ventilation technologies

During the pandemic, Medtronic actively provided ventilators and even established partnerships for the production of devices with companies not related to medical technologies such as Foxconn and Tesla. In a few months, the production of Medtronic ventilators has increased fivefold - from 200 to more than 1000 per week. In addition, Medtronic added remote control to its Puritan Bennett 980 ventilator, integrated Nellcor pulse oximetry sensors into the device and improved the Vital Sync remote monitoring system.

7. Technologies for the Treatment of Diabetes Mellitus

Medtronic admitted that it has lost its leadership in technology for the treatment of diabetes mellitus, and therefore intends to acquire Companion Medical and its InPen intelligent insulin syringe system. The company also intends to increase research and development in the field of diabetes management with the investment of Blackstone.^[8]

Blackstone invests $337m in Medtronic diabetes unit

In mid-June 2020, it became known that Blackstone Life Sciences, part of the Blackstone group, invested $337 million in the diabetes division of Medtronic.

Thanks to the Blackstone deal, Medtronic will receive funding for several years in the total amount of up to $337 million. These funds will go towards the accelerated deployment of four programs to develop insulin pumps and continuously monitor glucose levels. According to Medtronic, Blackstone will receive royalties in the form of a percentage of sales if the proposed technologies successfully enter the market. No conctrained funded projects are listed.

Revenue from Medtronic's diabetes division contracted 9% in the first quarter of 2020 due to the COVID-19 pandemic, and the company is now looking to catch up. The centerpiece of the new strategy will be the advanced MiniMed 780G closed-loop hybrid pump, which implements an algorithm for setting the lower target glucose level at 100 mg/dL and an algorithm for automatically adjusting the insulin dose every five minutes.

The company conducted two clinical trials: in a pivotal study, it was proven that a new insulin pump allows better control of glucose levels in ordinary patients, and a second clinical study showed that the pump could be used in severe patients with uncontrolled diabetes to correct indicators.

Medtronic has to compete with companies such as Tandem, which develops the Control-IQ closed loop algorithm - it became the first interoperable means of automatic glucose control. So far, Tandem is considered "the best closed-loop system on the market." However, Medtronic expects to receive permission to sell the 780G system in the summer of 2020.^[9]

Medtronic paid tens of millions to license technology for robotic surgeons

In early June 2020, Medtronic struck a deal with Canadian company Titan Medical to develop and license technology for robotic surgeons. Under the terms of the deal, Medtronic will have access to some of Titan's intellectual property, and Titan will be able to commercialize these technologies in its own business. Read more here.

Tesla restarts New York plant to produce Medtronic ventilators

At the end of March 2020, Tesla announced that it would restart the New York plant, which previously produced solar panels. Now it will launch the production of artificial lung ventilation devices developed by Medtronic. Read more here.

2019

Abbott, Medtronic, Sanofi and Novo Nordisk started sharing diabetic data

In mid-September 2019, Abbott and Medtronic announced data sharing agreements for digital diabetes care solutions. For example, Abbott is partnering with Sanofi to integrate glucose assessment and insulin delivery tools. And Medtronic is partnering with Novo Nordisk to use insulin dosing data from smart pen syringes in its glucose monitoring devices. Read more here.

China imposed duties on medical equipment

On September 1, 2019, China introduced the first part of additional duties of 10% on American products worth $75 billion. And on December 15, new 5 percent fees will come into force. The duties affected some types of medical equipment, including dialysis devices, orthopedic products and hospital supplies. Read more here.

Jeff Martha is the new CEO of Medtronic

On August 28, 2019, Medtronic announced a change of CEO. Instead of Omar Ishrak, who led the company for about 8 years, Jeff Martha was appointed. Read more here.

Medtronic fires employee over obesity

At the end of August 2019, the trial ended, in which a former Medtronic employee accused the company of being fired due to pathological obesity. Read more here.

Medtronic fires employees after learning of their disability

In late July 2019, the U.S. Equal Employment Opportunity Commission sued Medtronic for discriminating against workers, alleging the company illegally fired a South Carolina employee because of her disability.

April Jackson temporarily worked as a forklift driver at the Medtronic site in Greenwood, South Carolina. Jackson has congenital abnormalities: she is missing one kidney and her bladder is deformed. Due to seeking medical attention, Jackson missed several night shifts, after which Medtronic immediately fired her, despite good reason and doctor's appointments that exempted Jackson from work for three days.

Despite the doctor's appointments, Jackson reported to work in a timely manner at midnight on the evening of February 6, 2017. However, she was unable to work a full shift. Before leaving, Jackson provided the shift supervisor with two copies of medical appointments exempting her from work until February 9, 2017. Jackson asked that the boss provide one of the copies to the human resources department. Jackson was fired three days later.

The Equal Employment Opportunity Commission insists Jackson only missed shifts due to illness, except in one case. An employment agency request sent to Medtronic to review the decision in light of Jackson's disability and doctor's appointments was ignored. The agency also argued that Medtronic did not hire Jackson as a permanent worker because of her disability.

The commission said it tried to negotiate with Medtronic without involving the court, but "failed to obtain an agreement acceptable to the commission from the defendant." The lawsuit provides for Jackson's compensation, punitive damages, as well as a permanent injunction against further disability discrimination.^[10]

Enter into a distribution agreement with Viz.ai

On July 23, 2019, it became known that Medtronic (Medtronic) enters into a distribution agreement with Viz.ai (Vis.ei-ai), a software developer (software) that allows you to detect signs of stroke, which will make it possible to expand the supply of this technology to hospitals and medical centers. Read more here.

Fine of $20 million for kickbacks to doctors when selling catheters

In mid-March 2019, Medtronic agreed to pay nearly $20 million to settle kickback charges related to the sale and promotion of ClosureFast radio frequency ablation catheters, which are being developed by a subsidiary of Covidien. Read more here.

2018

Medtronic will pay $50.9 million for the sale of medical devices for unauthorized indications

On December 4, 2018, Medtronic agreed to pay $50.9 million to resolve a conflict over post-marketing control of medical devices, including those designed to treat vascular defects in the brain.

Ev3 Inc, which is owned by Medtronic, pleaded guilty to selling a neurovascular medical device for unproven and potentially dangerous indications for use and will pay $17.9 million in connection with this. The conflict is linked to the Onyx embolic system, which was approved by regulatory authorities in 2005 for limited use as a device blocking blood flow in arteriovenous brain malformations.

According to a statement from prosecutors, ev3 from 2005 to 2009 sold Onyx for other unauthorized indications and continued to do so even after officials alerted ev3 executives in 2008 to identified security issues.

Medtronic said in a statement that it also resolved two other conflicts that reached the court. Covidien, another Medtronic subsidiary, paid doctors to use a Solitaire thrombectomy device that is designed to restore blood flow to some stroke patients, prosecutors said. The scheme led to payments to the state's Medicare and Medicaid health programs for false indications. In this case, Medtronic received a fine of $13 million.

Medtronic also said it had agreed to pay $20 million to settle another investigation related to various illegal actions by Covidien and ev3 to promote their goods, in particular international sales for falsified testimony. However, Medtronic does not consider the amount of the fine to be a fair refund for these offenses.^[11]

Appointment by the court of payment of $112.5 million to the inventor for low fees

At the end of November 2018, the court ordered Medtronic to pay surgeon and inventor of Polish origin Rick Sasso $112.5 million as a result of his lawsuit. Read more here.

Transition to Risk Offset Contracts

On April 2, 2018, it became known that Medtronic CEO Omar Ishrak was pushing for an increase in the number of so-called risk compensation contracts.  

We are talking about client contracts based on results - when results are critical, and the risks of not receiving the expected results are very large.

As The Wall Street Journal (WSJ) reported in early April 2018, Medtronic signs contracts with customers to adjust prices based on how well a particular product works, instead of the customer paying a fixed price for the product, regardless of its effectiveness.

The transition to results-based contracts follows a healthcare industry initiative to pay for care services based on changing patient health. 

Medtronic began contracting based on results in 2017. By the beginning of April 2018, the company signed about 1000 agreements requiring the company to reimburse certain expenses of medical institutions.

The company also entered into a contract with Aetna to compensate for the cost of insulin pumps if the patient did not experience improvements when using the Medtronic pump.

In an interview with the WSJ, Omar Ishrak emphasized that the purpose of these contracts is to provide customers with an additional guarantee that their costs are justified, rather than cutting Medtronic's costs.

When asked about the decision to move to performance-based contracts, Ishrak noted the following:

Medtronic is developing technologies to improve treatment effectiveness. We are building life support systems to relieve pain, restore health and prolong life. It is necessary to increase the responsibility of manufacturers of medical devices.[12]

2017

$12 million fine for false advertising

On December 13, 2017, Massachusetts Attorney General Maura Healey reported that Medtronic agreed to pay $12 million to conduct a deliberately false marketing campaign to promote the Infuse bone implant, which is used to enhance bone growth.

According to the court record, Medtronic sought to boost sales of the item by using fake scientific articles with false evidence relating to its safety and benefits. Read more here.

Opening of development centers in Israel

In September 2017, Medtronic opened development centers in Israel in conjunction with the local Innovation Authority (IIA  ).

The Medtronic development centers, which have opened in the cities of Yokneam Ilit and Jerusalem, will focus on Big Data technologies in healthcare and brain function monitoring, respectively.

About 100 people will work at these facilities. IIA investments will amount to $14 million.

It is noted that Medtronic became the first company in the world to create a development center in Israel with the support of the Israeli Innovation Directorate. According to Bloomberg, citing its own sources, business interest in opening production and research sites in Israel is primarily due to the favorable tax environment in the region and the low tax rate on intellectual property.

Other sources of the publication say that the example of Medtronic may be followed by other multinationals that are negotiating with the Israeli authorities over possible investments.

About Medtronic's plans to open two centers in Israel for research and development (R&D; - Research and Development, R&D) first became known in May 2017.

Then the CEO of  Medtronic Omar Ishrak met with the Minister of Economy and Industry of Israel Eli Cohen and the head of the Israeli Innovation Management Aaron Aharon to discuss the details of cooperation.

The NoCamels.com portal, citing Yedioth Ahronoth, reported that Medtronic will invest about $56 million in R&D facilities, provided that the country's government will provide the company with a grant of $15 million.

Medtronic's representative office in Israel opened in 1974. Since then, the company has acquired several local medical device manufacturers. Some of these firms have grown a lot, others have ceased to exist. There are those whose activities have been transferred abroad.

Among the companies purchased are Given Imaging (produces techniques for capsule endoscopy), superDimension (produces endoscopes), Oridion Systems (specialization - capnographic monitors and modules) and PolyTouch (laparoscopic surgical instruments for soft tissue prosthetics).

In addition, Medtronic works closely with the Israeli company DreaMed Diabetes, which created the technology for round-the-clock monitoring of glucose levels in insulin pumps.

In addition to the company's equipment being used in many local clinics and medical centers, the manufacturer is a partner of the MindUp technology start-up incubator in Haifa.

By September 2017, Medtronic has a national staff of 750.

According to the IIA, there are about 320 international companies operating in Israel by September 2017. In 2016, foreign investments in the country amounted to $12.6 billion, which is 7% more than a year ago.^[13]

Renal Denervation Efficacy Study

In late August 2017, Medtronic presented the results of the company-sponsored SPYRAL HTN-OFF MED study on the efficacy of renal (renal) denervation. Read more here.

Insurance company compensates patients for buying Medtronic pumps if they helped achieve positive results in lowering sugar levels

In June 2017, Medtronic agreed with a large insurance company to cover the effective operation of insulin pumps of an American manufacturer.

Diabetics usually check their blood sugar several times a day and inject insulin if necessary. Pumps automate this process.

Medtronic has signed an agreement with Aetna. The company will pay patients to buy three models of Medtronic insulin pumps, in case these devices have yielded positive results.

This agreement strengthens our emphasis on value-oriented health care, "comments Hooman Hakami, President of the Diabetes Division of Medtronic. - We know that technology alone is not enough, and improving results is important.

Medtronic did not disclose the financial details of the contract with Aenta, but noted that in such transactions, the revenues of the parties are tied to medical results and can vary depending on whether patients achieve or do not meet targets.

Vice President of the American diabetes business Medtronic Suzanne Winter (Suzanne Winter) noted that first Aetna will pay insurance for patients to achieve the A1c blood sugar level parameter. In the future, it is planned to form other conditions, including those related to the treatment of hypoglycemia and the general satisfaction of patients, she said.

The arrangement between Medtronic and Aetna is a new example of health care shifting to prescription drug production and medical equipment, the acquisition of which is reimbursed if expected results are achieved, Reuters observers said.

Earlier, Medtronic entered into an agreement with the insurance company UnitedHealth Group, which also began to pay refunds based on clinical results demonstrated by the partner's devices.^[14]

Repurchase of shares for $5 billion

On June 23, 2017, Medtronic announced share buybacks as part of a major capital return program to shareholders.

According to a statement from Medtronic, it is planned to purchase up to $5 billion in common securities from existing shareholders within an unnamed period. Based on the quotation rate as of June 23, 2017, this volume corresponds to 56.1 million shares, or 4.1% of the total outstanding. A previous share buyback was announced in 2015.

In addition to this program, Medtronic will return capital to investors through the payment of a quarterly dividend - at 46 cents per share, which is 7% more than previously.

The increase in dividends testifies to the confidence of the board of directors and management in obtaining strong cash flow and the ability to provide profits to our shareholders, says Omar Ishrak, CEO and Chairman of the Board of Medtronic. - We pledge to pay at least 50% of our cash flow annually through dividends and share buybacks, balancing the return of cash to shareholders and strong reinvestment in our business to achieve sustainable growth.

Despite a fairly large capital return program, investors reacted neutrally to it: after the official statement, the value of Medtronic shares did not change. At the same time, from the beginning of 2017 to June 23, the company's quotes jumped by a quarter, while the S&P 500 index, to which Medtronic belongs, increased by 8.7%.

However, on June 26, 2017, Medtronic securities rose in price to the highest value in history - $88.49. As a result, the market capitalization of the American manufacturer of medical devices exceeded $122 billion.

For 2017, Medtronic operates in 4 segments:

• develops and produces high-tech devices and equipment for the cardiovascular field of medicine (revenue from this segment is almost half of the total revenue),
• restorative therapy,
• minimally invasive treatments and
• diabetes therapy.

Payment of $24 million to a doctor for violating his patents for the treatment of the spine

In May 2017, a trial ended in which Dr. Mark Barry accused Medtronic of patent infringement when the company developed devices for the treatment of the spine. Medtronic could not prove its innocence, moreover, the amount of the fine increased by 20% compared to the previous court decision. Read more here.

Payment of $14 million in taxes in the case of concealment of $1.4 billion in profit

In January 2017, the Internal Revenue Service (IRS) agreed to reduce the tax arrears collected from Medtronic to $14 million as part of the tax proceedings for the company's activities in Puerto Rico.

The case involved so-called transfer pricing or rules governing transactions between different divisions of the same company. This is the simplest and most common scheme of international tax planning, the purpose of which is to minimize the taxes paid. Transfer prices are the object of control of the fiscal authorities of the state.

Although Puerto Rico is a dependent territory on the United States, the companies prescribed there are considered foreign to the American tax system. These companies pay income taxes at the local rate, and the 35 percent rate in effect in the United States applies to them only after the income is repatriated.

The IRS filed a tax lawsuit (U.S. Tax Court), stating that Medtronic did not tax $1.36 billion in income when transferring intellectual property to the Puerto Rican subsidiary, Medtronic Puerto Rico Operations, which manufactures medical devices. The statement of claim said Medtronic taxed only 7% of the subsidiary's profits.

In June 2016, Judge Kathleen Kerrigan ruled that the evidence presented by the IRS of Medtronic's guilt was "gratuitous, wayward and unreasonable." The Puerto Rican subsidiary participated in every aspect of the production process and made a significant contribution to the company's total profit, she said.

In January 2017, Medtronic and the IRS entered into a tax calculation agreement, according to which the company underpaid $26.4 million in taxes in the reporting year, closed in April 2005, but overpaid $12.5 million for the next year. Thus, Medtronic will have to pay less than $14 million to the US budget. But first, the agreement between Medtronic and the IRS must be approved by the court.^[15]

2016

Fine of $17 million in China for fixing prices

In December 2016, it became known about the first fine imposed on a medical device manufacturer for illegal price fixing in China. The scandal erupted around Medtronic, but may spread to competitors.

According to the China Daily, the Chinese National Development and Reform Commission (NDRC) fined Medtronic 118.5 million yuan (about $17 million) for prohibiting dealers and distributors from lowering prices for Medtronic medical equipment, including insulin pumps and pacemakers.

Fixing minimum prices led to high patient costs and hindered the development of full-fledged open competition in the Chinese market for implantable medical devices, the NDRC said.

Medtronic received a fine of 4% of sales of products that appeared in the proceedings in 2015. The company has already taken certain corrective measures, the regulator said without providing further information.

The source notes that Medtronic became the first manufacturer of medical equipment to be investigated by Chinese antitrust authorities over price fixing. Accordingly, the fine for such a violation was the first in the country.

Medtronic neither denies, but also does not confirm price manipulation. At the same time, the company agreed to pay a fine.

We are fully committed to following all local laws and regulations, "a Medtronic spokesman told The Wall Street Journal.

Meanwhile, the China Economic Herald calls Medtronic only "the tip of the iceberg," since the Chinese authorities suspect about 100 pharmaceutical companies and manufacturers of medical equipment in a cartel conspiracy.^[16]

Create a new distribution center in EMEA

In November 2016, Medtronic announced the start of construction of a new organizational and technical sales base for products, which will be located in the Dutch city of Herlen near the company's Center of Excellence.

The new facility for the distribution of medical products will begin operation in mid-2017, take up an area of ​ ​ 33 thousand square meters and will work in close cooperation with CEVA Logistics, which as part of Medtronic manages the global supply chain.

The Medtronic supply center in Herlen will employ about 140 people, while the entire staff of the company in the city has about 1000 employees. Thanks to the new enterprise, the manufacturer of medical equipment expects to establish uninterrupted round-the-clock supply of products to more than 15 thousand hospitals and clinics throughout Europe.

The warehouses of the new center will receive surgical instruments, patient monitoring systems, implantable prostheses and other medical devices developed by Medtronic. The design and construction of the building will be carried out with the support of the construction company WDP.

We are committed to ensuring the timely delivery of our medical equipment to hospitals and patients. The unique geographical location of the new facility will support the planned growth in the European market, "said Sikko Zoer, Vice President of Customer Service and Supply Channel at Medtronic in EMEA (Europe, Middle East, Africa).

According to him, the distribution center in Herlen will provide Medtronic with world-class logistics services and emphasize the company's global expertise in the field of health.^[17]

Opening a headquarters for diabetes care

In September 2016, Medtronic announced the opening of a new headquarters to treat diabetes. The office is located in Plymouth (Minnesota, USA).

This facility will become the company's central place of business management in the field of treating diabetes mellitus with non-intensive methods. New products in this area will also be developed there, research will be carried out, marketing initiatives will be created and operating activities will be carried out.

Having our own platform indicates that we strongly believe in maintaining Medtronic's leadership in the treatment of type 2 diabetes, says Laura Stoltenberg, vice president and head of non-intensive diabetes treatment at Medtronic. - Our business is increasing the population Medtronic treats for more than just the first type of diabetes we've historically focused on. We put glucose among the vital signs, so monitoring its levels should be part of the work of caring for patients. Our staff in Plymouth are directly promoting this approach and improving the quality of life of sufferers.

Hooman Hakami, executive vice president of Medtronic's diabetes division, said the company is showing rapid growth and progress in the treatment of type 2 diabetes, something one could only dream of before. The formation of the corresponding business was part of the goal of helping 20 million people by 2020 and turning Medtronic from a manufacturer of pumps and sensors into a global company leading comprehensive diabetes treatment, Hakami said.

In September 2016, Medtronic released the results of a test of the company's MiniMed 670G insulin pump, which operates under the control of a closed-loop system. Testing carried out on 124 patients for three months showed the effectiveness and safety of the system for type 1 diabetes patients aged 14 and over.^[18]

Robot surgeon release plans

In early June 2016, Medtronic announced the timing during which the company is going to release its own robotic surgical system and start making money on it.

According to Reuters, citing Brian Hanson, head of minimally invasive therapy at Medtronic, the company will launch its autonomous robot surgeon before the start of fiscal 2019. First, new equipment will appear in Indian medical institutions.

The manufacturer expects that the system being created will begin to generate "significant revenues" in fiscal 2019 and will reduce the costs associated with the development of robotic surgery.

It is expensive so far, but we will look for options to eliminate this barrier, "Henson said during a presentation to investors.

He said that about 150 specialists working in Germany, as well as in the US states of Massachusetts, Connecticut and Colorado, are engaged in the creation of a robotic surgeon at Medtronic.

Robotic surgery develops within two areas: telesurgery (the surgeon directs the robot during the operation without directly contacting the patient) and surgery with minimal intervention. What type of robots the development of Medtronic will belong to is not specified.

It is assumed that the Medtronic product will compete with the only robot on the market (by June 2016) capable of conducting operations in the field of abdominal surgery. We are talking about the da Vinci system developed by Surgical and used in the surgical treatment of prostate, kidney and bladder cancers, as well as in gynecology. In addition, Johnson & Johnson and Google are working on a similar project as part of the Verb Surgical startup.^[19]

Development of four lines of business. Structure

As of May 2016, Medtronic's structure consists of:

• Medtronic International is responsible for the operation of the company, sales and delivery of products outside the United States.

• Quality and Operations continuously carries out company-wide activities to improve the process of work in accordance with one of the key provisions of the mission: "make every effort to ensure the maximum reliability and quality of our products." This department is also responsible for general issues in the field of information technology, personnel and finance.

• Strategy and Innovation, a company-wide organization, coordinates R&D efforts and tools, especially when it comes to solutions that combine different technologies. This department also assesses the strategic prospects of investments.

• The Healthcare Policy and Regulatory Department is engaged in developing a strategic approach to issues affecting the production of medical equipment in general. As a global leader, Medtronic cooperates with government authorities and companies engaged in similar activities on issues related to obtaining permits from regulatory authorities, ensuring funding and availability of therapy and analyzing the cost-effectiveness of their use.

Creating a sculpture for a football stadium

On May 11, 2016, Medtronic announced its participation in the creation of an art monument near U.S. Bank Stadium, where the Minnesota Vikings of the National Football League play. Cooperation between the medical device manufacturer and the popular sports team is developing within the framework of a ten-year program.

The sculpture called "The Horn" is two giant curly ribbons with a mirrored surface from the inside. By type, they are similar to the ribbons used in rhythmic gymnastics, but in fact symbolize Gjallarhorn (the golden horn of the guardian of the Heimdall gods from German-Norse mythology), which is the symbol of the Minnesota Vikings team.

Measuring 33 x 9 x 8 m and weighing 38 tons, the structure will sit next to the world's tallest glass gate (about 26 meters) leading to the U.S. Bank Stadium arena. The sculpture, which was designed by local design firm Alliance, will consist of structural pipes, a plate steel frame, painted metal panels and stainless steel elements with mirrored finishes. The monument will be clearly visible at night thanks to LED lighting. The installation is scheduled to be erected by August 2016.

The Horn will be another project of the sponsorship collaboration Medtronic and Minnesota Vikings, which began in 2006. Previously, Medtronic Plaza was built near the Viking Stadium with the financial support of a medical technology provider, which regularly hosts various concerts and celebrations.

In addition, Medtronic opened the Medtronic Club bar-restaurant on the territory of U.S. Bank Stadium, and also, together with the team, supports various institutions and organizations in Minnesota, such as a zoo, a science museum, etc. Since 2011, Medtronic and a controlled investment fund have invested more than $56 million in state development. Medtronic is headquartered near the U.S. Bank Stadium (Minneapolis).^[20]

2015: Purchase of Irish Covidien for $49.9 billion

In 2015, Medtronic absorbed the Irish-based company Covidien. The deal amounted to $49.9 billion.

2014: Moving HQ from US to Ireland

In 2014, Medtronic's headquarters relocated from the United States to Ireland to optimize taxation in the amount of $14 billion. In doing so, the company announced plans to hire 1,000 new employees at its Minnesota facilities. Later, in December 2016, the company, on the contrary, moved jobs requiring low qualifications from the United States to the Philippines. By the end of 2016, she still recruited 500 new employees in Minnesota and promised to fulfill her previous obligations to hire^[21].

2012: Payment of $120 million to research authors

In October 2012, the US Senate Finance Committee found that Medtronic was actively involved in editing published studies and paid their authors about $120 million. In addition, Medtronic promoted information about clinical trials of the Infuse bone implant by distributing medical journals and publishing the findings on a government website.

2011: Omar Ishrak - Chairman of the Board and CEO of the company

In 2011, Omar Ishrak was elected Chairman of the Board of Directors and CEO of Medtronic. Prior to that, he served as president and CEO of General Electric Healthcare Systems.

1967: Service centre opened at Amsterdam airport

In the 1960s and 1970s, there was an extensive growth in the company's foreign economic activity. In the Medtronic 1960s, approximately one-third of all revenues are sales revenues outside the United States, of which the European market accounts for most of them. To ensure a better response to the needs of the market, a service center was opened in Amsterdam Schiphol Airport in 1967.

Large enterprises in,, and Holland To Canada France Puerto Rico were also built. Subsequently, the countries of Latin America and were added to this list. Japan

1949: Founding a company in the United States

Medtronic was founded in 1949 by American entrepreneurs Earl Bakken and his half-brother Palmer Hermundslie, who opened a medical equipment repair shop in Minneapolis, USA. The name of the company comes from the phrase Medical electronics - "medical electronics."

At the time of the company's founding, Earl was a graduate student at the University of Minnesota and majored in electrical engineering. In addition, he was engaged in the repair of laboratory equipment requiring a special approach at a hospital in Minneapolis. Soon, doctors asked him to also engage in the design and creation of new equipment samples.

Throughout its history of development, the company has rapidly expanded and transformed into a large international holding for the production of medical devices.

Notes