Medtronic’s Agreement Will Expand the Use of Its Tyrx Envelopes

Replacing infected heart devices costs the US healthcare system ~$1 billion each year. Reflecting confidence in its Tyrx envelope, Medtronic has put a program in place that aims to reduce infection rates related to heart devices. As part of the program, Medtronic signed “risk sharing” agreements with more than 140 hospitals and clinics in the US. The agreement confirms that a substantial rebate will be given towards the cost of removing and replacing an infected Medtronic device if it was implanted along with a Tyrx envelope. The program has helped Medtronic gain higher market share. To participate in Medtronic’ growth potential, investors can invest in the iShares Russell 1000 Value ETF (IWD). IWD has ~1.1% of its total holdings in Medtronic.

In the wake of changing industry dynamics, similar value-based programs are being implemented across the healthcare space. In 2016, Stryker (SYK) undertook a similar program called “SurgiCount Promise,” which involved a $5 million product liability indemnification agreement in case the company’s surgical sponges get left in the patient despite using its specialized bar code system tracking. Other major players that have recently undertaken such “risk sharing” agreements include Johnson & Johnson (JNJ) and St. Jude Medical. Now, St. Jude Medical is part of Abbott Laboratories (ABT).

View more information: https://marketrealist.com/2017/06/medtronics-agreement-will-expand-use-tyrx-envelopes/

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