Medtronic 2014 Annual Report Download - page 18

The charts below set forth net sales of our Diabetes products as a percentage of our total net sales for each of the last three fiscal
years:
Fiscal Year 2012
(dollars in millions)
Diabetes
$1,481
All Other
$14,703
Fiscal Year 2013
(dollars in millions)
All Other
$15,064
Diabetes
$1,526
Fiscal Year 2014
(dollars in millions)
All Other
$15,348
Diabetes
$1,657
10%
90%
9%
91%
9%
91%
Customers and Competitors
The primary medical specialists who use and/or prescribe our Diabetes products are endocrinologists, diabetologists, and
internists. Our primary competitors in the Diabetes business are Johnson & Johnson, DexCom, Inc., Insulet Corporation,
F. Hoffmann-La Roche Ltd, and Tandem Diabetes Care, Inc.
Research and Development
The markets in which we participate are subject to rapid technological advances. Constant improvement of products and
introduction of new products is necessary to maintain market leadership. Our research and development (R&D) efforts are
directed toward maintaining or achieving technological leadership in each of the markets we serve in order to help ensure that
patients using our devices and therapies receive the most advanced and effective treatment possible. We remain committed to
developing technological enhancements and new indications for existing products, and less invasive and new technologies for
new and emerging markets to address unmet patient needs. That commitment leads to our initiation and participation in many
clinical trials each fiscal year as the demand for clinical and economic evidence remains high. Furthermore, we expect our
development activities to help reduce patient care costs and the length of hospital stays in the future. We have not engaged in
significant customer or government-sponsored research.
During fiscal years 2014, 2013, and 2012, we spent $1.477 billion (8.7 percent of net sales), $1.557 billion (9.4 percent of net
sales), and $1.490 billion (9.2 percent of net sales) on R&D, respectively. Our R&D activities include improving existing
products and therapies, expanding their indications and applications for use, and developing new products. We continue to focus
on optimizing innovation, improving our R&D productivity, driving growth in emerging markets, evidence generation for our
growth platforms, and continue to assess our R&D programs based on their ability to deliver economic value to the customer.
Acquisitions and Investments
Our strategy to provide a broad range of therapies to restore patients to fuller, healthier lives requires a wide variety of
technologies, products, and capabilities. The rapid pace of technological development in the medical industry and the
specialized expertise required in different areas of medicine make it difficult for one company alone to develop a broad portfolio
of technological solutions. In addition to internally generated growth through our R&D efforts, historically we have relied, and
expect to continue to rely, upon acquisitions, investments, and alliances to provide access to new technologies both in areas
served by our existing businesses as well as in new areas and markets.
We expect to make future investments or acquisitions where we believe that we can stimulate the development of, or acquire
new technologies and products to further, our strategic objectives, and strengthen our existing businesses. Mergers and
acquisitions of medical technology companies are inherently risky and no assurance can be given that any of our previous or
future acquisitions will be successful or will not materially adversely affect our consolidated results of operations, financial
condition, and/or cash flows.
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