Who is the King of Medtech?
Tuesday, December 1, 2015
Conventional wisdom has it that the United States is still the strongest global player in the medical device industry. But a casual look at the five largest medical device companies reveals that only Johnson & Johnson has a U.S. domicile. Among the top 10, half are now based Europe, including Medtronic (Ireland), GE (Healthcare division is in the United Kingdom), Fresenius and Siemens (Germany), Novartis (Switzerland), and Philips (Netherlands).
While the United States has attempted to crackdown on so-called inversion deals, it is possible that U.S.-based firms will continue to relocate their headquarters to take advantage of the considerably lower corporate taxes there. Drug- and device-maker Pfizer’s plan to buy Allergan (Dublin) could be further evidence of this trend in the healthcare space. In August, in a piece titled “Inversion Deals Retain Their Allure,” the Wall Street Journal noted that inversion deals continue to be popular among U.S.-based companies. “It is recognised that Europe has a low corporate tax, and so a number of medical device companies (and companies in other industries) are moving their headquarters to Europe because of the attractive corporation tax,” Marcus Gould, regulatory affairs manager at GlySure Ltd (Oxfordshire, UK), said during a conversationon LinkedIn’s Medical Devices Group.