Guiding Principles

Medtronic adopted an enterprise-wide process to plan for Health Care Provider (HCP) and Health Care Organization (HCO) service agreements. This process includes enhanced documentation and analysis regarding the business need for services, and the selection of a particular HCP/HCO to perform those needed services. We also standardized our consulting-services agreements to ensure consistency across our company.

The Needs Assessment process seeks to ensure that collaboration with HCPs/HCOs is based on legitimate business need, is limited in scope, and payment is based on principles of fair market value (FMV) compensation.

The Needs Assessment process examines key aspects of each HCP/HCO engagement, including:

• The services we need to obtain from HCPs/HCOs and the reasons they cannot be performed in-house.
• The bona fide need for the consulting service.
• The necessary HCP/HCO qualifications for the consulting services we seek.

The level of management review and executive oversight of requests for consulting services correlates with the anticipated scope and level of services being requested.

Medtronic will continue to use our documented fair market value methodology for all compensation. It includes:

• Annual limits on HCP-services relationships
• A fixed-fee compensation model for training and education activities
• Restrictions on royalty earners and their participation in clinical research for products on which their royalties are earned.

Medtronic reports, on a quarterly basis, compensation in a calendar year totaling more than $5,000 to US physicians for royalties and physician consulting services (excluding clinical advisory services). We voluntarily disclose compensation made directly to:

• A physician, a private foundation, or LLC controlled by the physician
• A practice group, or physician partnership for the work of one physician member of the group*
• Hospitals or academic institutions for the work of an identified physician*

Note that physicians whose compensation is shared on our website are active, practicing, licensed physicians, and those who are actively involved in clinical research.

* In some cases, Medtronic compensates an entity for services provided by, or royalties earned for the inventions of, a physician associated with that entity. In such cases, Medtronic does not know the amount of payment, if any, the entity makes to the physician. As such, the payment data presented in this Registry may not reflect the actual amounts received, if any, by the listed individual physicians.

In the spirit of continuous improvement, we constantly monitor and evaluate additional activities to ensure our collaboration with physicians is based on the most appropriate principles and guidelines. We conduct regular holistic reviews of each physician relationship, including annual reviews of projects and consulting agreements.

Medtronic engages interested stakeholders in dialogues on best practices and critical issues in physician-industry collaboration. For example, in 2011 we:

• Worked with the Healthcare Leadership Council to form the National Dialogue for Healthcare Innovation (NDHI), an interactive forum for leaders from across American healthcare to engage in constructive dialogue about issues affecting innovation and patient care.
• Facilitated the very first Summit on Physician-Industry Collaboration, which led to the development of a consensus statement around principled collaboration for the benefit of patients.