This is a partial transcript from Your World with Neil Cavuto, May 20, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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NEIL CAVUTO, HOST: Medtronic (search), the world’s biggest medical device maker on the cutting edge of health care, with new devices that would allow patients to skip operations like bone grafts and bypass surgery, earnings up 62 percent in the latest quarter. Here is the guy right in the middle of that, Medtronic boss, the CEO, Art Collins.
Mr. Collins, good to have you.
ART COLLINS, MEDITRONIC CHMN. & CEO (MDT): Good to be with you, Neil.
CAVUTO: I want to quickly get your reaction to this Supreme Court decision. We know how it affected a lot of drug makers yesterday and the notion that they could go for discount pricing on drugs. Any affect on some of the device makers like yourself?
COLLINS: No, not really. In fact, if you look at our pricing to Medicare and Medicaid beneficiaries, it is not all that much different than what we charged to other individuals. So while it is a very large issue for the pharmaceutical industry, it is not a particularly large issue for the medical device industry.
CAVUTO: So all of a sudden if a state like Maine or any other state that might get this idea wants group discounts on stents, who is to say that they can’t get it?
COLLINS: Well, we are currently being reimbursed under Medicare and Medicaid. And we find that those reimbursements by and large are adequate. We can quibble with certain products but it is not going to have a significant impact on medical devices as compared to pharmaceuticals.
CAVUTO: There are a large number of people who have a short position in your stock, in other words, hoping and praying that they can bash you down. And one of the arguments they use is that there are a number of drugs today that make stents and other devices you make totally unnecessary and that that is going to hurt you. What do you say?
COLLINS: Well, it is interesting, Neil, when medical devices have been compared to drug regimens and one of our largest businesses, cardiac rhythm management, where we have pacemakers and implantable cardio defibrillators to treat a number of heart disorders, it has basically been proven that medical devices are superior to drugs alone, sometimes they are common regimens. So we feel that the growth potential we have, not only in our base business of cardiac and cardiovascular care, but also in diabetes and neurological disorders and spinal is very healthy going forward.
CAVUTO: Bottom line is we are all getting older, particularly the Baby Boomers. They are the ones who are graying and they are the ones who need your stuff. And that has been kind of the wind at your back. I guess you expect that to outweigh what has been happening on the downside.
COLLINS: Well, you are absolutely right. If you look at the demographics not only here in the United States, but in many developed countries in the world, there is a larger percentage of the population that is moving into that 60 and 65-year-old and older category. And those individuals tend to access our products more than younger people. It is a trend that has been under way, you see the Baby Boomers now moving into that older position, that have greater cardiovascular problems. So we think this bodes well in the future for our products.
CAVUTO: Art Collins, thank you, and Art, I appreciate you juggling with all of the breaking news we have had today.
COLLINS: Sure, Neil.
CAVUTO: Thank you very much, Art Collins, the man who runs Medtronic.
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