1. INSEAD
Alumni Health Care Summit 2009
Bringing Medical Technologies to the World
Dr. Karl Schweitzer
Vice President Neuromodulation Europe & Central Asia
Medtronic International

2. Medtronic 1949 - 2009
60 Years of Innovation in MedTech
> 38,000 employees
> 120 countries
29 manufacturing sites
> 40 years presence in Europe
#1 or #2 position in all markets
$ 14.6 billion in Annual Sales
$ 5.6 billion in International
$ 1.36 billion on R&D

3. Our Universe: MedTech Industry
Continuous Innovation
New science, technology, materials, “combination products”
Short product lifecycle & investment recovery period ~18-24 months
Speed of innovation vs time-to-market (approvals/EBM) % of MDT revenues
Price Pressure from products
Reimbursement (DRG, etc), HTAs (NICE/UK, HAS/F) introduced in the last
2 years
Procurement (Purchasing groups, pan-European tenders)
International price referencing
2/3
Highly Competitive Markets
High Cost of Doing Business
High support and service: training & education, clinical support
High distribution, service and maintenance costs, product tracking
“Bedside to Bench”
Critical interactions with implanters/referrers/physicians: as users, for R&D
(inventors/developers), clinical trials, as trainers, etc.
Hospital focus/administration

4. Medtronic: “Bedside to Bench”
Solutions for Chronic Diseases
ENT Conditions Psychiatric Disorders
Structural Heart Disease Movement Disorders
Chronic Pain
Cardiac Arrhythmia Spinal Conditions
Diabetes
CardioVascular Disease
Incontinence
Minimally Invasive & Implantable Devices

5. Context: Under-used Therapies x Favorable Demographics
Demographics Driving
100% International Opportunity
90%
• Therapy penetration - low
80%
US Penetration
70% Int’l Penetration
• Increasing wealth - demand
60% • Urbanization trends - access
50%
• Population growth
40%
30% • Ageing populations
20% by 2050: 2 billion > 60 years
10% 380 million > 80 years
Pace- Heart Spinal Diabetes
Stents ICDs AAA Neuro
makers Valves Fusion Pumps

6. Context: Ageing Population x Increased Wealth
Projected Population of the Aged
Top Eight Projected 2050 Gross
(≥ 65) in Regions of Various Domestic Product (GDP) Regions
Development; 1980-2040
In 000’s
1,000
Developed China 44.5
Developing
800 United 35.1
Least Developed
States
India 27.8
600 Western Europe 12.5
Japan 6.7
400
Brazil 6.0
200 Russia 5.8
South Africa 1.2
1980 2000 2020 2040 -- 10 20 30 40 50
Source: UN Population Division In Trillions of $US
Developing Regions Represent Large China and India Markets Will Rival
Market Opportunity the U.S. Market in Size
Source: IHT

7. Medtronic: Bringing MedTech to the World
China
• Evaluate “local” segment opportunities
• Larger Footprint through Medtronic - Weigao
Joint Venture (Spine)
India
• Implement unique business models for
developing healthcare systems
• Drive awareness through clinical and referral
programs (Cardiac)

8. Patient Access Hurdles Need to Be Overcome
Efficient Research &
Development
Parliament & Optimized Clinical
Government Relations Trials
Public
Faster
Awareness Budget Pressure Regulatory Review
Clinician & Patient Optimal Reimbursement
Advocacy & Funding
Effective
Referring Physician
Solutions Product
Education
Training

9. Medtronic Carelink: Savings through
“Real Time” Diagnosis and Management of Patients
• Internet-based service for
41% Savings
clinicians & patients using CareLink
• Management of cardiac disease 1,400
& diabetes Total cost
Yearly cost per patient €
1,200
€1267
• Remote device & physiologic 1,000
monitoring
800
• Clinical data mgmt. & integration Total cost
600 €744
• Worldwide 440,000 patients 400
Productivity gains: 200
- increased clinical productivity
- less hospitalizations 0
Usual follow-up CareLink-based
- improved medical compliance scheme scheme
Innovative MedTech is Part of the Solution

10. Macroeconomic Implications of Ageing
200%
Net Growth/Decline in Working Population 1970-2010
150% 2010-2050
100%
50%
0%
-50%
Mexico Brazil India China South Australia Canada US Netherlands Spain France UK Russia Italy Japan Germany
Korea
Source: Deloitte Research, UN Population Division
Competitiveness is at Stake for Major Economies -
Need for Longer Productive Life!
10

11. Paradigm Shift in Health Care:
from “Cost” to “Value”
Health is Wealth !
Thank You