There are two parts to this story, the first part is by way of an introduction of how this unethical company has affected me personally, the second part is how it has affected you and others who aren’t aware of how far their exploitation has gone.
Part 1. Me. Well this doesn’t need any great research Medtronic has cost me financially, they have stolen my time, my health and my Karma. Why?
I was fitted with a Pacemaker made by Medtronic * after fainting in my home. I look back now and consider ‘should I have had the operation in the first place knowing what I know today’. To explain, I got out of bed one morning and felt lightheaded, I fainted banged my head and when I came to, I decided to drive to the local hospital. I was admitted and six days later was fitted with a Medtronic Pacemaker. What I didn’t know at the time was the track record of what I regard as a completely unethical money-making machine that puts profits before patients was the maker of this device. After months of tests following a “recall” of my device by Medtronic I was told that I needed a different Pacemaker and have the old one removed (under local anaesthetic) which was quite painful. The Pacemaker was replaced by a German made Biotronik * Pacemaker. As I write this I felt it appropriate to give Biotronik an opportunity to speak their mind and sent this message, (I recently had one of your Pacemakers fitted to replace a Medtronic device, I can say your pacemaker is now working well. However, I am now very concerned that Medtronic is putting profit before patients and continues to place patients at risk. I am now writing an article for the Times newspaper exposing some of the facts that I’ve uncovered and by way of this message wanted to give you the opportunity to have your say whether that be by means of your mission statement or whatever you feel appropriate. You don’t of course need to respond at all I should mention that this case has been running for some time and has now involved friends (politicians in Malta and the USA) Who I’m assured will want to see some real action against this company. Thank you for producing a reliable device and I look forward to hearing from you.) I will forward their reply if and when I get one.
So enough about me what about Medtronic *. Medtronic was founded in 1949 in Minneapolis by Earl Bakken and his brother-in-law, Palmer Hermundslie, as a medical equipment repair shop.
Through his repair business, Bakken came to know C. Walton Lillehei, a doctor of heart surgery at the University of Minnesota Medical School. The deficiencies of the pacemakers of the day were made painfully obvious following a power outage over Halloween in 1957, which affected large sections of Minnesota and western Wisconsin. A pacemaker-dependent paediatric patient of Lillehei died because of the blackout. The next day, Lillehei spoke with Bakken about developing some form of battery-powered pacemaker. Bakken modified a design for a transistorized metronome and created the first battery-powered external artificial pacemaker.
Medtronic’s original headquarters in St. Anthony, Minnesota
The company expanded through the 1950s, selling equipment built by other companies but also developing custom-made devices. Bakken built a small pacemaker that could be strapped to the body and powered by batteries. Work in the new field later produced an implantable pacemaker in 1960. The company built headquarters in the Minneapolis suburb of St. Anthony, Minnesota, in 1960 and the company moved to Fridley in the 1970s. Medtronic’s main competitors in the cardiac rhythm field include Boston Scientific and St. Jude Medical. In 1998, Medtronic acquired Physio-Control for $538 million.
Animal rights (2005 to 2010) In 2005, 2008, and 2010 PETA threatened to submit a shareholder resolution to improve animal welfare standards in the company. In 2005, PETA attempted to stop five specific animal experiments that it deemed “crude and cruel”. In 2008, PETA protested the outsourcing of animal testing to countries with lax animal welfare laws, such as China. In 2010, PETA attempted to stop Medtronic’s reported use of live animals in testing and training. In response, Medtronic conducted a feasibility study that found that banning the use of live animals was impractical. Medtronic continues to use live animals for testing and training but has said that it will look for alternatives in the future. In each case, PETA withdrew its shareholder resolution after talks with Medtronic’s leadership.
Tax inversion to Ireland (2014)
Medtronic legal headquarters, 20 Lower Hatch Street, Dublin 2, Ireland
In June 2014, Medtronic announced it would execute a tax inversion to Ireland by acquiring Irish-based Covidien plc (a previous U.S. tax inversion to Ireland in 2007), for $42.9 billion in cash and stock. The tax inversion enabled Medtronic to move its legal headquarters to Ireland, while maintaining its operational and executive headquarters in the U.S., thus allowing it to avoid taxation on more than $14 billion held overseas, and avail of Ireland’s beneficial low corporation tax regime. Medtronic’s tax inversion is the largest tax inversion in history and given the changes in the U.S. tax-code in 2016 to block the Pfizer-Allergain Irish tax inversion, is likely to remain the largest. Medtronic CEO Omar Ishrak defended the tax inversion in a 2015 interview to the Financial Times saying, “We just followed the rules and the deal was done based on strategic merits”. Ireland is less than 0.1% of Medtronic (or Covidien) sales, and the majority of Medtronic’s sales, and an even greater percentage of Medtronic profits (due to the higher margins on U.S. medical devices), are from the U.S. healthcare system. In 2016, the Star Tribune reported that Medtronic was still winning U.S. Federal contracts and attending U.S. trade-missions as a U.S. company.
In terms of scale, on 23 November 2018, Ireland’s largest stockbrokers, Davy Stockbrokers reported that the total capitalization of the Irish stock market was €104 billion (this does not include Medtronic, which Davy do not consider an Irish company). In contrast, on the same day Medtronic’s capitalisation was listed on Bloomberg at just over $130 billion (or €115 billion).
Medtronic’s acquisition of Covidien plc made Medtronic the world’s largest medical device company by revenues.
Post tax inversion to Ireland (2014–)
In February 2016, the company announced that it would acquire Bellco from private equity firm Charme Capital Partners. In June, the company announced its acquisition of HeartWare International Inc. for $1.1 billion. In December 2017, Medtronic acquired Crospon in €38 million ($45 million). In September 2018 the company acquired Mazor Robotics for $1.64 billion ($58.50 per American Depository Share or $29.25 per ordinary share. In late November, Medtronic acquired Nutrino Health Ltd boosting the company’s nutrition-related data services and analytics.
In May 2019, Medtronic announced it would acquire Titan Spine, a technology company focussed on titanium spine implants. Chief Executive Officer Omar Ishrak * will retire in April 2020 and will be succeeded by senior executive Geoff Martha. In January 2020, the company announced its intention to acquire Stimgenics, LLC and their primary therapy, differential target multiplexed spinal cord stimulation.
Acquisition history Medtronic Global rankings
In May 2018, Medtronic was ranked as the world’s largest medical device company by 2017 revenues (see table below).
In March 2017, Bloomberg’s database of U.S. tax inversions listed Medtronic and Wright Medical Group (Medtronic’s 2015 inversion to Ireland was over $100 billion, while Wright’s 2015 inversion to the Netherlands was $3.3 billion), as the only U.S. tax inversions of a U.S. medical device company in history. In February 2018, the Wall Street Journal listed Medtronic’s 2015 tax inversion to Ireland as the largest U.S. corporate tax inversion executed between 2013 and 2016. In May 2018, Medtronic was ranked as the largest corporate tax inversion in history.
So not only is this company exploiting the worlds population but its also avoiding tax to the US government of $ billions. Should they be brought to task? Should Omar Ishrak their CEO be asked to explain the actions of this company under his watch before he “retires” (well word has it he’s off to yet another money-making opportunity). How much money can one man accrue and what does he do with it all?
I hope the US government responds to what is a complete disregard for ethics and also regain control of this huge tax injection which can be used for the betterment of us all.