Building On Success
The Global Marketplace
Patient-Centered Care

As implantable cardioverter-defibrillators decreased in size during the 1990's, their functionality increased.

Building On Success

By 1999, the company had evolved from what was originally a "one-product" enterprise focused on heart pacing therapy to a large and diverse global leader with an array of technologies focused on treating chronic heart conditions; correcting degeneration of the spine; overcoming Parkinson's disease; controlling chronic pain, severe spasticity and debilitating tremor; and treating the symptoms of cerebral palsy and spinal cord injury.

The success of innovative products continued as well, moving Medtronic past the $4 billion mark in annual revenue in 1999. Some of the advances made during the decade include:

• Introduction and subsequent enhancement of implantable cardioverter-defibrillators for the treatment of sudden cardiac death
• Continued improvements in pacemaker therapy, including smaller devices, improved functionality and increased longevity
• Introduction of a small, portable, common programmer that serviced all Medtronic implanted cardiac devices in major hospitals all over the world to assure continuity of treatment for all Medtronic patients
• Introduction of neurological therapies for the treatment of chronic pain, spasticity, essential tremor and tremor associated with Parkinson's disease through implantable stimulation devices and implanted drug delivery systems
• Systems of products to support the industry trend toward minimally invasive cardiac surgery, designed to shorten surgical procedures, shorten hospital stays and restore patients more quickly to full lives
• Dramatic improvement in surgical devices and in balloon angioplasty including a variety of stents that reduce the incidence of repeat surgeries
• Through the acquisition of market-leading companies, expansion into therapies for spinal and orthopedic surgery, peripheral vascular, external defibrillation, and ear, nose and throat surgery.

The Global Marketplace

The global marketplace of the 1990s was characterized by change, rapid responsiveness, and a worldwide demand to contain health care costs.

Many hospitals, for instance, joined national buying groups or became affiliated with large, integrated health care systems and changed the way they made purchasing decisions.

To respond to those changes, Medtronic introduced the Cardiovascular Alliance. It brought leading hospitals, physicians, and Medtronic together in a long-term contractual agreement aimed at improving therapeutic outcomes and meeting economic challenges.

Medtronic also embarked on alliances with other companies to develop new technologies or drugs that work in tandem with our devices. For example, our collaboration with Novartis Pharmaceuticals Corp. on Lioresal Intrathecal, the drug used in intrathecal baclofen therapy, resulted in improved quality of life for thousands of patients with severe spasticity. The 1990s brought the explosion of information technology tools, and Medtronic introduced its first Internet site, www.medtronic.com, in 1995. The Internet soon became an important resource for information about the company for patients, customers and health consumers. As part of a new eBusiness strategy, the company entered into an alliance with Healtheon/WebMD, the leading consumer-focused health cae information Web site, to provide online resources about health conditions as well as information about Medtronic products and therapies.

As the product list had grown, so had the company. In 1991, Medtronic employed 8,000 people globally; by the end of the decade, employees numbered more than 22,000. Their combined efforts - envisioning, designing, testing, manufacturing, and marketing medical devices, systems, and therapies - enhanced the lives of more than 1.5 million patients per year.

Ongoing development activities, including seminars, training, and special programs, ensured that employees acquire and maintain the specialized knowledge and skills required for the company's success. In 1997, and again in 1999, as a demonstration of that success, Medtronic received the number-one ranking on the list prepared for the book titled 100 Best Stocks to Own in America. Additionally, Medtronic was named one of the "100 Best Companies To Work For" in America by Fortune magazine in 1998-1999, and 2001-2002.

In 1999, Medtronic marked its 50th anniversary with special celebrations for employees and customers around the world. The 50th anniversary was also celebrated by the introduction of a new Medtronic logo - a new adaptation of the rising human figure - as well as the company's first tagline: "When Life Depends on Medical Technology." This identity focused on Medtronic as "precise, pioneering, and passionate," and as the company to turn to "when life depends on medical technology."

Patient-Centered Care

The Activa Tremor Control System is designed to reduce tremors caused by disorders such as Parkinson's disease.

Art Collins, who had served in several executive roles at Medtronic, was elected Chief Executive Officer in 2001. He led the company as it entered the 21st Century poised for reinvention and growth, and with a new vision for the future: Medtronic is the world's leading medical technology company, providing lifelong solutions for people with chronic disease.

The new vision was crafted in response to demographic and societal changes: chronic disease was becoming more prevalent and more expensive for patients to manage; the population was aging in countries where Medtronic had a major presence; and the wealth of information available to patients, much of it via the Internet, meant that patients were better informed than ever before and taking a larger role in the management of their own health care.

To meet patient and customer needs in a new era of "patient-centered care," Medtronic leveraged and integrated the synergies in medical technology and information technology. One example was the CareLink Network that allowed patients at home to download information from their implanted defibrillators over the Internet, to be reviewed by their physicians. The CareLink Network freed patients from in-person doctor visits and allowed patients the freedom to travel yet still receive follow-up treatment and care.

Diabetes and heart failure - two chronic diseases that affect millions of patients worldwide - became important to Medtronic during the early 2000s. With the acquisition of MiniMed and MRG in 2001, Medtronic became the leader in insulin infusion pumps for patients with diabetes. The InSync and InSync ICD devices were the first to provide a new solution to heart failure, the progressive deterioration of the heart's capability to pump.

Biotechnology and biologics became another important part of the product equation in the late 1990s and early 2000s. Substances that cause a biologic response when used with our products - the InFuse* bone graft, consisting of recombinant human bone morphogenetic protein inserted into a spinal cage, for example - promoted better outcomes and faster healing for people requiring spinal fusion.

*INFUSE^® Bone Graft is approved for use with LT-CAGE^®, INTER FIX™ and INTER FIX™ RP, which incorporate technology developed by Gary K. Michelson, M.D.