Public Policy Development & Political Contributions

In March 2010, the U.S. Congress passed historic health reform legislation that will shape the future of U.S. healthcare and the medical technology industry for decades to come. Medtronic was actively engaged in policy debates (some outlined below) early on, and we are encouraged by the inclusion of several elements that protect our industry, customers, and patients. Further, we applaud greater reliance on evidence-based medicine, economic incentive designed to reward quality and superior clinical outcomes, insurance market reforms, and coverage expansion that will ensure access for 30 million more Americans.

We see the implementation of healthcare reform as an opportunity for us to continue to make the case for both the societal value of our therapies and the long-term cost saving and enhanced efficiencies we generate for the healthcare system. We believe that Medtronic is a key part of the solution to improving healthcare around the world.

Medtronic will remain actively engaged in the ongoing healthcare policy debate as the legislation is implemented. With our Mission as our guide, we will be innovative in shaping our business and our therapies to compete in the new environment.

Below is a synopsis of our positions and how U.S. healthcare reform impacts our business:

Medical Device Tax

During the reform debate many proposals surfaced to create new revenue sources, including a proposed medical device rebate, projected to be $60 billion over 10 years, to help fund expanded healthcare in the United States. Medtronic representatives worked with legislators and other industry representatives to reach a compromise that changed the rebate to a deductible excise tax that is projected to equal $20 billion over the same time period. This allows Medtronic to support expanded access without significantly compromising future investments in innovation. The conventional excise tax is scheduled to begin in 2013 to coincide with coverage expansion. It will cover all product classes with the exception of retail products, which may provide some relief to our diabetes customers who use products such as continuous glucose monitors.

Transparency in Physician-Industry Collaboration

Medtronic continues to support the disclosure of relationships between physicians and industry consistent with our own industry leading voluntary initiatives. As with the AdvaMed code, we worked proactively to help shape the Payment Disclosure Act – also known as Sunshine legislation – that was included in U.S. healthcare reform. The resulting bill applies tracking and disclosure requirements irrespective of company size, ownership characteristics, or other qualifiers or exceptions, which we strongly support. It also prevents state efforts to impose additional requirements in this area and requires physician-owned entities to disclose the value of their investment interest. The healthcare reform bill calls for the industry to begin tracking these relationships in 2012 and reporting them in early 2013. Medtronic began voluntarily disclosing this information on June 1, 2010, more than two years ahead of the congressional mandate. Click here for more information on our commitment to transparency.

Comparative Effectiveness Research

Healthcare reform legislation calls for the creation of a national body to study and compare widely used medical therapies. Medtronic is a leader in promoting higher evidentiary requirements and supports comparative effectiveness research as a means to allow physicians and patients to make informed decisions in a way that can help reduce healthcare spending and improve patient care. To best achieve these objectives, Medtronic believes that analysis should reflect the unique attributes of medical technology and focus on comparative clinical outcomes rather than cost. Further, industry needs to have adequate input into the setting of research priorities and methodologies and to comment at key milestones in the analytic process.

For more on Medtronic’s approach to Comparative Effectiveness Research, see page 16 of our 2010 Annual Report.

At any given time, we have hundreds of clinical studies underway, and we will continue to work with the U.S. Congress and Administration on the implementation of comparative effectiveness research in a manner that recognizes the unique attributes of device innovation, clinical study, and product use.

Chronic Pain and AAA

Healthcare reform legislation also includes significant measures for people living with chronic pain and removes barriers for screening for abdominal aortic aneurysms (AAA). Our partnership with patients, clinicians and industry colleagues to advocate for those who suffer from these conditions helped shape the resulting bill, which will expand patient access to related therapies, fund important ongoing research, and enhance training and education regarding treatment options in both areas.

International Public Policy Development

Medtronic’s international relations team contributes to global public policy development through a multi-pronged advocacy campaign.

In fiscal year 2010, this included participation in:

  • the U.S. Congressional Global Health Caucus Panel Briefing on Chronic Disease in Emerging countries, designed to increase awareness of chronic diseases in low- and middle-income countries;
  • the Corporate Council on Africa Noncommunicable Disease (NCD) Breakfast Series, which introduces the private role in healthcare related to NCDs;
  • advocacy coordination for the United Nations General Assembly Special Session for NCDs, in particular developing a network through the Global Alliance for Women’s Health and encouraging specific member countries to increase their involvement and support; and
  • the Global Harmonization Task Force (for international medical device regulatory harmonization), Asian Harmonization Working Party, and Asia-Pacific Economic Life Sciences Innovation Forum, World Heart Federation, and International Diabetes Foundation.

Lobbying Disclosure

Medtronic works to advance U.S. public policy that promotes medical technology innovation and patient access to new therapies, both of which contribute to our mission of returning patients to full life.

Recent congressional action expands the regulations related to lobbying disclosure to include:

  • broader disclosure of activities by lobbyists;
  • restrictions on offering and receipt of gifts, including transportation and travel, for members of Congress and their staff;
  • restrictions on employed lobbying activities by former high-level government officials; and
  • clarity of internal legislation processes including earmark disclosures and accountability.

Companies are required to file disclosure reports six times per year. This information is available at http://disclosures.house.gov.

Medtronic also maintains memberships in AdvaMed and EucoMed, medical device trade associations in the United States and Europe, which advocate for legal, regulatory, and economic initiatives that advance global health by ensuring access to medical technology. Our AdvaMed dues are based on domestic sales, and a portion is used for public policy advocacy. Additional information can be found at http://disclosures.house.gov. In March 2010, AdvaMed named Medtronic CEO Bill Hawkins to head its Technology and Regulation Committee.

Medtronic is also a member of, and holds leadership positions in, other industry associations in Brazil, China, India, Japan, Mexico, Russia, Southeast Asia, Turkey and other countries and regions. In the United States, Medtronic also maintains memberships in the U.S. ASEAN Business Council, U.S. Brazil Business Council, U.S. China Business Council, Corporate Council on Africa, U.S. Japan Business Council, U.S. Korea Business Council, and U.S. Russia Business Council.

Political Contributions

To further support the advancement of public policy that supports our Mission, Medtronic established the Medical Technology Fund (MTF), an employee-based, voluntary, non-partisan political action committee in the United States.

Governed by a Board of Directors comprised of Medtronic employees and executives, the MTF has adopted by-laws and operational guidelines that include criteria for disbursements to federal candidates.

In the United States, in jurisdictions that permit corporations to make contributions to campaigns of state and local candidates or party committees, Medtronic uses the same MTF criteria and framework to evaluate such contributions. Any support for candidates is made in compliance with applicable law and regulations.

Medtronic follows its Political Contributions Policy and annually discloses all political contributions.