M E D I C A L T E C H N O L O G Y : B R I N G I N G I N N O V A T I O N & V A L U E T O P A T I E N T S

2015

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Noel Zuniga, devoted husband, father and

NCIS federal agent, suffered a heart attack

following a routine run. Counting the seconds,

his doctors identified a blockage and inserted a

stent to keep his artery open, but in Noel’s case

it was not enough and he went into cardiogenic

shock. Physicians then utilized an advanced

medical technology – a minimally invasive pump –

to allow Noel’s heart to rest and recover, saving

his life. Today, Noel has returned to an active and

full life, thanks to medical technology innovation.

P R O F I L E I N I N N O VAT I O N

ADVAMED ADVOCATES ON A GLOBAL

BASIS FOR THE HIGHEST ETHICAL

STANDARDS, TIMELY PATIENT

ACCESS TO SAFE AND EFFECTIVE

PRODUCTS, AND ECONOMIC

POLICIES THAT REWARD

VALUE CREATION.

OUR MISSION

2

2015 was a year of significant progress for AdvaMed and the medical technology industry. From winning a two-year suspension of the innovation-crushing medical device tax, to House passage of FDA reforms in the 21st Century Cures Act, to elimination of significant tariffs on medtech exports via World Trade Organization expansion of the Information Technology Agreement, working together we achieved critical results on behalf of industry and patients everywhere.

Driving our efforts in 2015 was AdvaMed’s “Innovation Agenda,” created with input from our Board, with specific recommendations to renew and reinvigorate America’s medtech innovation ecosystem (see p. 5). Throughout this report are descriptions of each of the five pillars of our Innovation Agenda, as well as compelling patient stories that showcase how a healthy innovation ecosystem can make all the difference to the people we serve.

During the busy year, our industry continued to deliver life-changing medical advancements to patients in need. These innovations allow people to live longer and healthier lives, yield savings across the health care system by replacing more invasive procedures and reducing hospital stays, and help create good-paying American jobs. Communicating this simple but important message, that our industry is an engine of both public health and economic progress – bringing innovation and value to patients – is a key part of AdvaMed’s integrated advocacy approach to advancing public policies that support investment, innovation and patient access.

Looking back on the year, the Association succeeded in these efforts on many fronts, yielding important benefits to AdvaMed member companies and the patients they serve. Here are some the year’s highlights:

LETTER FROM THE PRES IDENT AND CHAIRMAN

1 Our Mission

2-3 Letter from the President

and Chairman

4 Membership

5 Innovation Agenda

6-7 Advocacy in Action

8-9 Technology and

Regulatory Affairs

10-11 Payment and

Health Care Delivery

12-13 Legal Affairs

14-15 International

16 State Affairs

17 Events & Education

18-19 Life Changing Innovation

20-21 Sector Spotlight

22-23 AdvaMedDx

AdvaMedDx Board

Executive Committee

24-25 Accel

Accel Board

Executive Committee

26-27 AdvaMed 2015

28-29 Board of Directors

Executive Committee

TABLE OF CONTENTS

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

3

LETTER F R OM THE PRES IDENT AND CHAIRMAN

• Passage of a two-year suspension of the medical devicetax, marking a major milestone in AdvaMed’s six-yearcampaign to repeal this onerous tax. Suspension will savethe industry nearly $2 billion annually and provide newfunds for investment in innovation.

• House passage of the 21st Century Cures Act with a fullslate of regulatory reform proposals, including an expeditedpathway for breakthrough technologies. If enacted, thesereforms will increase the efficiency and predictability of theFDA review process, and improve patient access to the bestin medical progress.

• Repeal of the Sustainable Growth Rate formula for Medicarephysician payments, eliminating the pressure point fromrepeated, temporary patches that caused Congress to lookto our industry for offsets. The Association also workedwith member companies, CMS and lawmakers to developand advance coverage, coding and payment proposalsfor legislation to help accelerate patient access to next- generation treatments and cures as part of congressionalinnovation initiatives.

• World Trade Organization expansion of the 1996 InformationTechnology Agreement, responding to AdvaMed advocacy,thus eliminating burdensome tariffs on $10 billion worth ofU.S. medical technology exports.

• AdvaMed development of a China Code of Ethics onappropriate industry interactions with health care providersin China, and numerous tools and awareness materials toassist members with implementation and compliancecertification. AdvaMed also launched a compliance app formobile devices, with features to assist industry interactionsand discussions with health care providers on issues underthe AdvaMed Code of Ethics and Physician PaymentsSunshine law.

• AdvaMedDx development of comprehensive policy onreform ing diagnostics regulatory oversight. AdvaMedDxworked with FDA, key congressional committees and otherstakeholders to advance oversight reform legislation, andalso worked with CMS and other stakeholders to ensureeffective implementation of diagnostics payment reformprovisions of the Protecting Access to Medicare Act.

• Enactment of tax extenders legislation with provisions ofparticular benefit to the medtech industry’s emerging andearly-growth enterprises, championed by AdvaMed Accel,including permanent extension of the R&D tax credit.

• And, finally, continued celebration of AdvaMed’s 40thanniversary year at our annual medtech conference andexhibition in San Diego, its first West Coast venue. AdvaMed2015 attracted more than 2,300 attendees representing over900 companies and stakeholder groups from 26 countries.

Vincent A. ForlenzaChairman, President and Chief Executive OfficerBDChairman, AdvaMed

Scott WhitakerPresident andChief Executive OfficerAdvaMed

4 A D V A M E D 2 0 1 5 A N N U A L R E P O R T

AMPLIFYINGYOUR VOICE

AdvaMed is the world’s leading medical technology trade association, with member companies that develop, manufacture and sell innovative medical devices and diagnostic products. AdvaMed supports the needs of members of all sizes – from cutting edge, entrepreneurial start-ups to emerging growth and mid-size companies to the largest innovators and manufacturers.

As the voice for a unified industry, AdvaMed is uniquely positioned to advocate for policies that support value creation and patient access to innovation, to proactively address and shape laws and regulations, and to ensure the highest ethical standards for industry interactions with health care providers. From winning a two-year suspension of the medical device tax, to advancing legislation in support of 21st century cures, to increasing harmonization of global ethical standards, AdvaMed’s progress in 2015 reflects the Association’s ability to harness the collective view of its 300 members to achieve positive results for the industry and the economy, and for patient care.

Through its staff of more than 70 experts, AdvaMed offers members knowledgeable guidance in areas critical to industry’s success: technology and regulatory affairs, payment and health care delivery policy, legal and compliance, global strategy and analysis, and government and public affairs.

AdvaMed also offers a range of opportunities for member interaction and cooperation, including the Women’s Executive Network, educational workshops and webinars, and industry- driven working groups and committees that help develop feedback and positions on policies that affect every sector of the medtech industry.

M E M B E R S H I P

P R O F I L E I N I N N O VAT I O N

At the age of 14, Joe Abdo began having seizures

and was diagnosed with epilepsy. When medication

proved ineffective, an MRI was ordered, revealing

that Joe had a brain tumor. Doctors used intraop-

erative MRI technology to fully remove his tumor.

Today, Joe is cancer-free and a proud husband and

father, working at a molecular diagnostics company

as a way to give back to a field that saved his life.

MEMBERSHIP BREAKDOWN BY U.S. SALES:n Associate Members = 10%n Emerging Growth Members (< $100 mil.) = 66%n Mid-size Members ($100 mil.-$500 mil.) = 12%n Large Members (> $500 mil.) = 12%

10%12%

12%

66%

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

A D V A M E D 2 0 1 5 A N N U A L R E P O R T 5

UNLEASHINGOUR POTENT IAL

America’s medical technology industry creates life-saving and life-enhancing treatments and cures that drive efficiencies and cost savings in the health care system, improve the quality of patient care and generate high-quality jobs that contribute to economic growth. In this century of the life sciences, the opportunities for life-changing new treatments and diagnostics are breathtaking. But the innovation ecosystem that supports medical technology development today also faces unprecedented challenges that impede rather than speed our progress. To respond to these challenges, AdvaMed proposed in February a new Innovation Agenda.

AdvaMed’s Innovation Agenda – including a streamlined, seamless pathway at FDA and the Centers for Medicare and Medicaid Services (CMS) for significant breakthrough products – is a comprehensive program to unleash the potential of medical technology to extend and improve lives, reduce the cost and burden of disease, and maintain and enhance U.S. scientific and economic leadership.

AdvaMed’s Innovation Agenda consists of five “pillars,” each addressing a key component of the American innovation eco system. They include: improving FDA’s regulatory processes, restructuring CMS’s coverage and payment processes, reforming the U.S. tax system, improving access to international markets, and supporting the maintenance and growth of America’s R&D infrastructure.

Throughout this report are further details of these five pillars, which will guide the Association’s long-term advocacy activities. In 2015, AdvaMed worked with policymakers and other industry stakeholders, and with lawmakers in Congress, to advance our proposals and to help ensure the continued promise of breath-taking medical progress in this century of the life sciences.

I N N O VA T I O N A G E N D A

Vanessa Ghigliotty was a recent college graduate

and single mother working as a nanny when she

was diagnosed with stage four colon cancer.

Admitted to the hospital for a suspected burst

appendix, an x-ray revealed tumors both inside

and outside of her colon. One year later, a PET

scan detected a recurrence. After eight surgeries

and three years of chemotherapy, Vanessa is a

cancer-free advocate for life-saving innovations.

P R O F I L E I N I N N O VAT I O N

6

WINNINGDEVICE TAX REL IEF

A D V O C A C Y I N A C T I O N

POLICYAdvaMed’s opposition to the tax and education of policymakers about its harmful nature began before the tax was even enacted as one of many revenue offsets for the 2010 Affordable Care Act (ACA). The Association opposed the tax as part of the ACA, and has subsequently pur-sued every possible legislative opportunity for repeal, whether as part of corporate tax reform, stand-alone legislation, or part of another legislative vehicle.

CONGRESS AdvaMed’s Government Affairs department led the way in building strong bipartisan support for repeal, holding hundreds of meetings with members of Congress and their staffs to educate them about the adverse effects of the tax on businesses and innovation. The Association organized dozens of Capitol Hill “fly-ins,” where member company execs met with congressional representatives and/or testified at hearings to drive home our message. AdvaMed also led a coalition of over 900 companies, associations, and patient, provider and research organizations, that worked together for repeal.

In the House, bipartisan repeal legislation sponsored by Rep. Erik Paulsen first passed in 2012 with 270 votes, including 37 Democrats. By the end of 2015, the House had passed device tax repeal five times, including a vote during the year that included 46 Democrats. In the Senate, a 2013 vote to include repeal in a non-binding budget resolution passed by an overwhelming majority of 79-20. By 2015, incoming Senate Majority Leader Mitch McConnell signaled repeal as a key priority for the year, and cosponsors of Senator Orrin Hatch’s bipartisan repeal bill reached 39. AdvaMed’s champions on the Hill also kept the need for repeal front-and-center during key fiscal inflection points and as part of the debate on fundamental tax reform, ultimately leading to device tax suspension at the end of 2015.

Senator Al Franken

and his staff discuss

the need for device

tax repeal with

Hallie Brinkerhuff,

Zimmer’s director of

advanced technology

(at left) during an

AdvaMed Capitol

Hill fly-in.

Senator Patrick Toomey of Pennsylvania,

chairman of the Senate Finance Com-

mittee’s Subcommittee on Health Care

(at left), greets Bruce Heugel, senior vice

president and CFO of B. Braun Medical,

who testified before the subcommittee

on the harmful nature of the device tax.

H.R.2029

“Consolidated Appropriations Act”

Signed December 18, 2015

BeitenactedbytheSenateandHouseofRepresentativesoftheUnitesStatesofAmericainCongressassembled…

*Sec.174,page830-831:

DEVICETAXMORATORIUM

Ø Thetax…shallnotapplytosalesduringtheperiodbeginningonJan.1,2016,andendingonDec.31,2017.

Ø TheamendmentmadebythissectionshallapplytosalesafterDec.31,2015.

In late 2015, Congress passed and the president signed a two-year suspension of the medical device tax as part of year-end tax extenders legislation, marking a major milestone in AdvaMed’s six-year campaign to repeal this onerous tax. Suspension will save the industry nearly $2 billion annually, freeing up funds for more next-generation treatments and cures. Securing full repeal remains a top priority. Nevertheless, suspen-sion represents a major first step, as well as broad bipartisan recognition of the negative effects the tax has had on R&D, American competitiveness and innovation. AdvaMed’s repeal strategy has relied on an integrated advocacy approach from the very beginning:

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

7

WINNINGDEVICE TAX REL IEF

RESEARCHIn today’s data-driven environment, winning policy debates depends on compelling, objective information. To that end, AdvaMed sponsored and leveraged studies from prestigious research organizations – including Battelle, the Pacific Research Institute, Ernst & Young, and the National Center for Policy Analysis – as well as AdvaMed member surveys in 2014 and 2015, to help quantify the device tax’s damaging effects. These effects included reduced R&D and delayed patient access to innovation. On the positive side, survey respondents indicated repeal would allow renewed investments in innovation. The findings were disseminated widely to members of Congress, the administration, the media and other health policy influencers.

MEDIA OUTREACHThroughout the repeal effort, AdvaMed’s Public Affairs department expanded its range and use of multimedia to spread the word about the negative consequences of the tax and the positive value of medtech innovation – innovation the device tax put at risk. These efforts included creating compelling fact sheets, infographics, ads, videos and social media posts; helping to place op-eds and editorials by member company execs and others in key publications nationwide; and running print and on-line ads in influential Capitol Hill journals. In 2015, AdvaMed launched the United4Innovation campaign to amplify our message with new information, resources and allies, including a web portal that helped generate tens of thousands of letters from repeal supporters to Capitol Hill.

STATE EVENTSAdvaMed’s grassroots advocacy included taking our repeal campaign on the road and hosting events at member companies across the country to raise awareness about the effects of the tax on local economies, often with participation by members of Congress and other elected officials. Such events – in key states like Arizona, California, Colorado, Illinois, Indiana, New York, North Carolina, Ohio, Pennsylvania and Wisconsin – helped to educate and engage employees and policymakers alike, and increased the ranks of those able to speak with one voice on the urgent need for device tax relief.

House Majority Leader Kevin

McCarthy (second from right) meets

with AdvaMed Capitol Hill fly-in

participants to discuss device tax

repeal, including Walter Rosebrough

of Steris, AdvaMed Chair Vince

Forlenza of BD, Dr. Michael Leong

of the Stanford Pain Management

Center, Nadim Yared of CVRx,

Karen Prange of Boston Scientific,

and Mike Genau of Medtronic.

Caroll Neubauer, chairman

and CEO of B. Braun Medical

(at left) joins a device tax

repeal rally in Philadelphia

organized by state life

science trade association

Pennsylvania Bio, along with

Pennsylvania congressmen

Charlie Dent, Patrick Meehan

and Ryan Costello, and PA

Bio’s Christopher Molineaux,

president and CEO (at right).

Medical Device Tax Would Be Suspended For Two Years In Tax Deal

Medical Device Tax Is Killing Jobs, Depressing Innovation

Repealing Tax Has Bipartisan Appeal

Spending Deal’s Adjustments To Health Law Seen As Step To Permanent Change

8

Ensuring regulatory processes for medical technology that are efficient, predictable and transparent is essential for innovation to thrive and patients to benefit, and is the core focus of AdvaMed’s Technology and Regulatory Affairs department. Our team of regulatory experts works collaboratively with our members, and with FDA and its counterparts around the world, to help ease the often challenging regulatory path to market – from clinical trials and premarket reviews to post-market require-ments – so that patients and physicians can have timely access to safe and effective innovations that save and improve lives.

CONGRESSIONAL INNOVATION INITIATIVESIn 2015, the T&R department leveraged its strong working relationships with FDA staffers at all levels to help develop and advance legislative proposals as part of the 21st Century Cures initiative in the House Energy and Commerce Committee, to increase the efficiency and predictability of the FDA review process and improve patient access to the best in medical progress. This effort paid off with House passage in July of the 21st Century Cures Act, including provisions to:

• Establish an expedited pathway forbreakthrough technologies;

• Clarify valid scientific evidence requirements;

• Improve the standards recognition process;

• Allow the use of central institutional review boards tofacilitate the conduct of multicenter clinical trials; and

• Revitalize the “least burdensome” standardfor regulatory reviews.

Meanwhile, AdvaMed sought to advance similar provisions under the parallel Healthier Americans initiative in the Senate Health, Education, Labor and Pensions Committee.

USER FEE REAUTHORIZATIONAdvaMed continued to monitor implementation of the FDA user fee agreement of 2012, under which the agency committed to a number of strong, measurable performance goals to increase the efficiency and consistency of its review process. Achievements to date include significant improve-ments in PMA and 510(k) review times, and in approval times for investigational device exemption studies.

LIGHTINGA PATH FOR INNOVATION

T E C H N O L O G Y A N D R E G U L A T O R Y A F F A I R S

Improving FDA’s

regulatory processes

so that the cost and

time of development

and approval of

devices and diag­

nostics is reduced

and the CDRH mis­

sion statement that

American patients

will be the first in the

world to have access

to new devices is

achieved, while

maintaining the

highest standards of

safety and efficacy.

INNOVATION AGENDA PILLAR 1

AdvaMed Technology and

Regulation Board Committee

Chairman Gary Pruden,

worldwide chairman, medical

devices, at Johnson & John-

son, opens a CDRH Town

Hall meeting at AdvaMed

2015 in San Diego.

Donald St. Pierre, deputy director, new product evaluation, at CDRH’s Office

of In Vitro Diagnostics and Radiological Health (at left); William Maisel, deputy

director for science and CDRH chief scientist; and Jan Welch, deputy director for

regulatory affairs at CDRH’s Office of Compliance, discuss regulatory proposals

with AdvaMed members and staff in January.

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

9

In preparation for anticipated reauthorization of the user fee agreement in 2017, AdvaMed engaged in discussions with members and other stakeholders to identify data needs and develop strategic framework goals for negotiations. These goals include: pre-submission process improvements; goals for timing between a PMA “approvable” decision and issuance of an approval order; goals for de novo applications; improve-ments in the CLIA-waiver process and goals; and continuation of the independent assessment required under the previous agreement. Negotiations with FDA for user fee agreement reauthorization commenced in September.

GUIDANCE DEVELOPMENTAdvaMed also met with FDA staff throughout the year to ensure consideration of important member goals as part of the agency’s development of several future guidance documents addressing the following topics: when to file a new 510(k) for a device modification; issues related to use of color additives in medical devices and colorant information requirements; and the type of modifications made to medical device software that require new 510(k) submissions.

Bill MacFarland, director, CDRH

Division of Enforcement B, Office

of Compliance (at right) and Kim

Lewandowski-Walker, FDA Office

of Regulatory Affairs, national

expert investigator, discuss the

case for quality at the AdvaMed

2015 conference in San Diego.

Janet Trunzo, AdvaMed senior executive vice president,

technology and regulatory affairs (at right) leads a discussion

of regulatory proposals with CDRH Director Jeffrey Shuren.

Michael Mussallem, chairman and CEO of Edwards Lifesciences (at right), discusses the need

for regulatory and other reforms with Senator Bill Cassidy of Louisiana, prior to providing

formal testimony before the Senate Committee on Health, Education, Labor & Pensions.

10

ACCESSFOR PAT IENTS IN NEED

Programs administered by the Centers for Medicare & Medicaid Services (CMS) provide health care coverage to millions of Americans, enabling patients to benefit from life-saving innovations from the medical technology industry. AdvaMed’s Payment and Health Care Delivery department works closely with CMS to ensure appropriate patient access to these innovations through efficient and predictable coverage, coding and payment processes – the importance of which is magnified when such policies are replicated by private payers.

HEALTH CARE DELIVERY CHANGESAs the health care system transitions away from fee-for-service toward more risk-based, integrated health care delivery models – such as CMS’s bundled payment programs and accountablecare organizations – AdvaMed seeks policy changes to ensurethat incentives offered to providers for achieving savings em-brace the full value of innovation in patient care, and that theformula for our health system is cost savings through medicalprogress, not cost savings instead of medical progress.

These efforts began to pay off in February when CMS announced it would allow payment adjustments in bundling pilots to help ensure access to products receiving new-technology add-on payments. Where there are significant gaps in quality measures that can prevent the full dimension of quality from being assessed by payers, AdvaMed continued to advocate for policies to help fill those gaps.

COVERAGE, CODING & PAYMENTAs part of AdvaMed’s Innovation Agenda, unveiled in February, the Association worked with member companies, CMS and lawmakers on Capitol Hill to develop and advance coverage, coding and payment proposals for legislation to help accelerate patient access to next-generation treatments and cures. These proposals include a streamlined, seamless path for CMS cover-age and payment for breakthrough products; establishment of automatic coverage for FDA-approved clinical trials; expanded coverage of telehealth services including remote monitoring used in the home; a streamlined process for granting temporary outpatient and physician payment codes to new technologies, and many more.

Meanwhile, AdvaMed worked with CMS to smooth imple men-tation of a centralized process for coverage of FDA-approved clinical trials, which began in January. Successful AdvaMed advocacy also resulted in the American Medical Association changing the wording of Current Procedural Terminology Category III codes so that non-coverage is no longer automatic.

P AY M E N T A N D H E A LT H C A R E D E L I V E R Y

Restructuring CMS’

coverage and

pay ment processes

to support

development of

new technologies

that improve

treatment, diagnosis

or prevention,

and provide

prompt patient

access to these

technologies.

Tamara Syrek Jensen,

director of CMS’s

Coverage and Analysis

Group, discusses the

evolving reimbursement

landscape and coverage

challenges at the

AdvaMed 2015

conference

in San Diego.

Jo Carol Hiatt, chair of the National Product Council,

Kaiser Permanente (at left); Bruce Japsen, a reporter with

Forbes; Joseph Rolley, vice president, global market access,

at ConvaTec; and Camille Farhat, president of American

Medical Systems (at right), discuss quality of life products

in the value-based care landscape at the AdvaMed 2015

conference in San Diego.

INNOVATION AGENDA PILLAR 2

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

11

In April, we saw repeal of the Sustainable Growth Rate formula for Medicare physician payments, eliminating the pressure point from repeated, temporary patches that caused Congress to look to the medtech industry for offsets. In June, the Asso-ciation held a payment policy conference in Arlington, Va., to address the key challenges and opportunities of the evolving coverage and reimbursement landscape.

RESEARCHIn 2015, AdvaMed-supported research highlighted both the strong value of medical technology and rising evidence requirements for coverage that can impede patient access. A Tufts study published in the February issue of Health Affairs showed it is 20-times harder to get a favorable Medicare coverage decision than 10 years ago. A study by Avalere found that leading health systems are able to adopt the latest medical advances and provide technology-intensive care without having higher Medicare spending than hospitals using less technology. Another study affirmed earlier findings that medtech has comprised a relatively small and constant share of national

health expendi-tures – about six percent – for more than two decades, and that medtech prices have grown at just one-third the rate of prices in the overall economy since 1989, under-scoring how our intensely competi-tive industry helps keep prices low.

Gail Boudreaux, CEO and founder of GKB Global Health,

and former CEO of United Healthcare (at right), and Michael

Farrell, CEO of ResMed, discuss the needs of hospital CEOs

and payers at the AdvaMed 2015 conference in San Diego.

www.AdvaMed.org

DECREASEDFATALITIES

THE VALUE OF MEDICAL TECHNOLOGY

Medical devices make up a small and stable part of national health spending

Advanced medical devices and diagnostics allow people tolive longer, healthier, and more productive lives

Between 1989 and 2013...

Medicare spending on high-tech hospitals is no higherthan other hospitals

Between 1980 and 2010...

Spending on medical technology as a share of total national health expenditures has stayed steady at about 6%.

Prices for medical devices have grown more slowly than the Medical Consumer Price Index or the overall Consumer Price Index.

0.9%

4.5%2.7%

MEDICAL DEVICEPRICES

MEDICAL CONSUMER PRICE INDEX

10 %

8 %

6 %

4 %

2 %

CONSUMER PRICE INDEX

SOURCE: G. Donahoe, G. King. “Estimates of Medical Device Spending in the United States.” June 2015.

1989 2013

Medical advancements helped increase life expectancy by 5 years and reduce fatalities from heart disease, stroke and breast cancer by more than half over the past 30 years. Medical advancements yield health care savings by replacing

more expensive procedures, reducing hospital stays and allowing people to return to work more quickly.

58%ADVANCED

MEDICAL TECHNOLOGY

HELPED REDUCE DURATION OF

HOSPITAL STAYS BY

SOURCE: National Center for Health Statistics. “Health, United States, 2012: With Special Feature on Emergency Care.” Hyattsville, MD. 2013.

A 2015 study examining Medicare spending found that a higher percentage of hospitals with the highest levels of technology have spending rates below the national average.

MEDICARE SPENDING BELOW NATIONAL AVERAGE

SOURCE: Avalere Health. “The Impact of Medical Technology on Medicare Spending.” September 2015.

OTHER HOSPITALS

TOP TECHNOLOGYHOSPITALS

65% 56%100

80

60

40

20

0

% OF

HOS

PITAL

S

Patrick Conway, CMS’s deputy administrator for innovation & quality

and chief medical officer, discusses the importance of patient access to

innovation at AdvaMed’s Payment Policy Conference in Arlington, Va.

12

AdvaMed’s Legal Committee works with in-house lawyers and compliance officers at member companies around the world to help foster a predictable legal environment that values innova-tive health care solutions, enhances public health and ensures patient access to the latest advancements in medical technol-ogy. The legal team also engages diverse stakeholder groups, including government regulators, physician specialty societies and others, to advance the highest global standards for ethical interactions between industry and health care professionals.

U.S. PHYSICIAN PAYMENTS SUNSHINE ACTIn 2015, AdvaMed engaged extensively with the Centers for Medicare and Medicaid Services (CMS) on implementation of the Sunshine Act, seeking to ensure an efficient disclosure process and that published data offers meaningful information to patients about industry-physician collaborations. The Asso-ciation worked to resolve members’ implementation concerns, including a proposal to combine physician Medicare payment data and Sunshine Act data on the CMS website, which CMS deferred in response to AdvaMed advocacy, and the question of whether medical journal reprints and payments supporting continuing medical education should be reportable, which continues to be discussed.

ETHICS & COMPLIANCEAdvaMed leads the promotion of ethical business environments in the medtech sector, consistent with the AdvaMed Code of Ethics on Interactions with Health Care Professionals (the AdvaMed Code). Among the Association’s 2015 accomplishments:

• AdvaMed organized andled industry-wide distrib-utor training sessions inLatin America and SouthernEurope focused on uniqueanti-corruption risks facedby third-party distributorsin emerging markets, aswell as ethical interactions,best-practices and compli-ance tools.

• AdvaMed – jointly with Med-Tech Europe – released newanti-bribery/anti-corruptioncompliance guidance with hypothetical scenarios and examplesof steps companies can take to minimize third-party risk.

• AdvaMed held its eighth annual Global MedTech ComplianceConference in May in Athens, Greece, which brought togethermore than 250 compliance professionals to discuss globaltrends facing the medtech industry. In February, we heldour fourth annual Latin America Compliance Conferencein Mexico City, Mexico.

• In the Asia-Pacific region,AdvaMed continued to playa leading role in the Asia-Pacific Economic Coopera-tion (APEC) businessethics initiative, workingto advance 11 new high- standard codes of ethicsthat have been adopted bymedical technology industryassociations.

• AdvaMed launched its Codeof Ethics on Interactions with Health Care Professionals

INNOVATIONADVOCATE

L E G A L A F F A I R S

AdvaMed Senior Executive Vice President and General Counsel Chris White (at right)

leads AdvaMed’s Latin America Compliance Conference in Mexico City with

Pablo F. Davila, president of AMID, the Mexican Association of Innovative Medical

Device Industries, who is also C.R. Bard’s head of Latin America North.

INNOVATION AGENDA PILLAR 3

Reform the U.S. tax

system to create a

level playing field,

starting with repeal

of the medical

device tax, a tax

that is draining

resources from

American manu­

facturing jobs

and research.

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

13

in China, which provides critical compliance guidance for medtech companies doing business in China, and developed numerous tools and awareness materials to assist members with China Code implementation.

• AdvaMed launched a compliance app for mobile devices(via iTunes) with features to assist industry interactions anddiscussions with health care providers on issues under theAdvaMed Code and Sunshine Act.

PHYSICIAN-OWNED DISTRIBUTORS (PODS)AdvaMed reconstituted its working group on PODs in 2015 and submitted written testimony to the Senate Finance Committee outlining long-standing industry concerns with the entities, which HHS’s Office of Inspector General determined “produce substan-tial fraud and abuse risk and pose dangers to patient safety.” The Association also advocated against hospital purchasing policies targeting PODs that unfairly discriminate against physician-owned small companies.

DEVICE TAXIn late 2015, AdvaMed advocacy led to a two-year suspension of the innovation-crushing medical device excise tax. To address issues surrounding implementation of the suspension, AdvaMed reconvened its Device Tax Working Group to consider the short-term legal effects, with plans to coordinate as necessary with the IRS and other stakeholders on interim guidance.

The Honorable David Pearce, U.S. ambassador to Greece (at left), addresses

attendees of AdvaMed’s Global MedTech Compliance Conference in Athens,

including Michael Mussallem, chairman and CEO of Edwards Lifesciences,

and Jeffrey Dunn, president and CEO of SI-Bone (at right).

Leo Tsao, assistant chief of the fraud section

of the U.S. Department of Justice, Criminal

Division (at right), Colleen Conry, partner at

Ropes & Gray, and Adam Morris, senior legal

counsel, global investigations, at Medtronic

(at left), discuss anti-corruption trends in

emerging markets at AdvaMed 2015.

14

AdvaMed’s Global Strategy and Analysis department works to level the playing field for medical technology companies across borders by advocating for trade, regulatory and reimbursement practices that are fair, transparent and predictable worldwide. Our team of international policy experts works with U.S. and foreign health care and government officials, and organizations like the World Health Organization, the Asia-Pacific Economic Cooperation forum, and other international medical technology associations, to help ensure policies that facilitate worldwide patient access to life-changing innovations.

During the year, AdvaMed advocacy helped secure World Trade Organization expansion of the 1996 Information Technology Agreement, thus eliminating burdensome tariffs on $10 billion worth of U.S. medical technology exports. The team marked additional successes and progress points across the globe:

CHINA – Two CEO delegations in 2015 – led by AdvaMed Chairman Vince Forlenza of BD and International Board Com-mittee Chairman Kevin Lobo of Stryker – focused on increasing alignment with global regulatory, tendering and reimbursement practices, including practices impacting clinical trials, approval times and unique device identification. In November, successful AdvaMed advocacy helped secure commitments from China at the high-level Joint Commission on Commerce and Trade to treat imported and domestic medical technology the same, expand clinical trial exemption catalogues, enhance the China FDA’s pre-submission consultation process, develop new rules more transparently, and provide annual regulatory approval performance reports. AdvaMed also developed a China code of ethics on appropriate industry interactions with health care providers and related implementation tools.

LATIN AMERICA – In October, AdvaMed participated in a delegation of business leaders pursuing reform and investment opportunities in the region, including high-level meetings in Bogota with Colombian President Juan Manuel Santos. In Brazil, AdvaMed partnered with the other three associations in ABIIS to stave off price control efforts, pro-mote the value of medical technology and evaluate regulatory and health technology assessment gaps in an effort to improve access to medtech in Latin America.

OPENINGGLOBAL MARKETS

I N T E R N A T I O N A L

AdvaMed Executive Vice President, Global Strategy and Analysis,

Ralph Ives (at left) meets with Colombian President Juan Manuel

Santos in Bogota as part of an October delegation of business leaders

pursuing reform and investment opportunities in Latin America.

INNOVATION AGENDA PILLAR 4

Improving access

to international

markets by insisting

on free and fair

trade in medical

technology, and

working with

foreign governments

to achieve

innovation­friendly

regulatory and

payment policies.

Jon Huntsman, Jr., former U.S. ambassador to China and

Singapore, former U.S. trade ambassador and two-term

governor of Utah (at right) attends the AdvaMed CEO

Summit with AdvaMed International Board Committee

Chairman Kevin Lobo, chairman and CEO of Stryker (at left).

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

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JAPAN – Intensive AdvaMed advocacy helped ensure changes to Japan’s reimbursement rules were at the positive end of what was anticipated, and prevented adoption of a proposed “market expansion repricing rule” that would have led to deep reimburse-ment cuts for products with higher sales than projected. Japan also continued to make progress under an AdvaMed-supported regulatory performance plan aimed at improving patient access to innovation.

INDIA – AdvaMed continued to seek adoption of pending legislation that would carve out an appropriate, globally harmo-nized regulatory framework for medical devices, as distinct from drugs. AdvaMed also redoubled its efforts to address mounting political pressure for price controls in the country, forming a PR task force, enlisting the assistance of a new consulting firm, and initiating a study to examine barriers to patient access in India. The Association aims to work with India’s government and other stakeholders to increase awareness of the value of medical tech-nology and improve patient access to needed care.

EUROPEAN UNION – As the EU continues to move toward significant revisions to its regulatory system for devices and diagnostics, AdvaMed worked in close collaboration with MedTech Europe (an alliance of European medtech industry associations) to address key issues and press for maintaining the safety and efficiency of the EU’s current, decentralized regulatory approach. These efforts included organizing meetings between AdvaMed members and officials in EU member states to help make our case.

AdvaMed International Board Committee Chairman Kevin Lobo, chairman and CEO of Stryker (at right), and

William Jin, managing director of Stryker Greater China and vice chair of AdvaMed’s China executive committee

and board (at left) participate in an AdvaMed member CEO delegation to Beijing in May.

AdvaMed Chairman Vince

Forlenza, chairman, president

and CEO of BD, meets with Japan

Prime Minister Shinzo Abe in

April to discuss the Trans-Pacific

Partnership agreement.

16

Ensuring patients have access to innovative treatments and cures requires effective advocacy at all levels of government, including the state level. Accordingly, AdvaMed’s State Government Affairs team works to engage state lawmakers and regulators to advance our policy goals. In 2015, this included hosting a hearing by the California Assembly Select Committee on Biotechnology at the AdvaMed 2015 conference in San Diego focused on examining the state of the medical technology sector in California and policies influencing its continued vitality. Often working in concert with state and local medical technology groups, the team marked key successes across the nation:

COVERAGE & REIMBURSEMENTIn 2015, successful AdvaMed advocacy led to improved health technology assessment processes in New York and Washington to help protect patient access to life-changing innovations. This included passage of legislation in New York establishing advisory committee input on benefit coverage decisions. In Washington, AdvaMed was able to engage a broad group of stakeholders to help win a requirement for open meetings by one of the state’s technology assessment bodies, thus increasing transparency of the assessment process.

In Utah, AdvaMed advocacy also helped defeat a proposal that would have instituted a new tax on device manufacturers to offset the cost of Medicaid expansion.

ENVIRONMENTALAdvaMed continued to fight efforts by state and local governments – in California in particular but in other states as well – to impose costly manufacturer take-back programs for home-generated medical sharps waste and batteries. In Connecticut and Texas, AdvaMed advocacy contributed to the defeat of legislation that would have placed the onus for battery disposal on medtech manufacturers.

DISTRIBUTIONAdvaMed sought to mitigate the burden of changes to medical device distribution regulations under consideration by the Louisiana legislature. The Association was able to secure appointment of a device industry representative to the state board charged with implementing the law, and supported successful legislation establishing a study committee on device distribution. The study report included several AdvaMed recommendations.

AdvaMed’s State Medical Technology Alliance (SMTA), a grow-ing network of state and regional trade associations, bolsters the industry’s grassroots reach and ability to engage effectively with legislators at the state and federal levels. In March, SMTA members participated in an annual Capitol Hill fly-in to engage with their congressional delegations on important topics, including the urgent need for relief from the innovation- crushing medical device tax.

ADVOCACYACROSS 50 STATES

S T A T E A F F A I R S

Connecticut State Senator Ted Kennedy, Jr.

(at left) receives a cerebral oximeter demo

during a tour of CAS Medical Systems,

arranged by AdvaMed and Thomas Patton,

president and CEO of the company (at right),

accompanied by Barry Farbrother, board

member at the Biomedical Engineering

Alliance & Consortium (center).

AdvaMed Chairman Vince Forlenza,

chairman, president and CEO of BD, accepts

from California State Assembly members

a framed resolution by the legislative body

commending AdvaMed for its outstanding

advocacy on behalf of the medical technology

industry in the state and nationwide.

State Medical Technology Alliance

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

1711

FIRST IN CLASS

E V E N T S & E D U C A T I O N

As the educational arm of AdvaMed, Events & Education offers premier programs designed for today’s medical technology professionals, addressing continuously evolving regulatory, reimbursement, legal and compliance challenges, and sales and marketing environments. AdvaMed’s high-quality conferences, workshops and webinars offer members and nonmembers alike unmatched opportunities to network and learn from experts in government, industry and academia.

As the pace of innovation increases, so does the complexity of the many issues impacting our industry. Medtech profession-als must continually seek new skills, insights and perspectives that will enable them not only to respond to change, but to anticipate it. AdvaMed’s engaging and interactive programs are designed to fit the schedules of busy medtech executives, including both in-person and virtual events. In 2015, AdvaMed conducted 24 in-person conferences and workshops, and several webinars, drawing more than 1,500 medtech professionals. In 2016, AdvaMed plans expanded programming, including additional geographic locations. Key topics and titles include:

• 510(k), PMA and IDE Submissions

• Reimbursement 101 and 201

• The Innovation Summit

• Medical Device & Diagnostic Statistical Issues Conference

• Payment Policy Conference

• Women’s Executive Network Events

• Advertising & Promotion of Medical Devices

• Compliance Bootcamps and the Executive Speaker Series

• FDA Submission Strategy

• Technical Writing

INNOVATION AGENDA PILLAR 5

Supporting the

maintenance

and growth of an

R&D infrastructure

second to none.

18

THE VALUEOF A L IFET IME

One of the most important roles of the Association is to educate stakeholders about the tremendous value of the medical technology industry to patients, health care systems and the economy.

Our industry is creating life-saving and life-improving innovations every day that help patients live longer, healthier lives while reducing health care costs and creating good- paying jobs across America and around the world. AdvaMed’s Life Changing Innovation campaign is the medtech industry’s flagship communications program to share our value story with the public, including policymakers,

elected officials, patient and provider groups, and others, to help shape policies critical to our success.

L I F E C H A N G I N G I N N O VA T I O N

Bill Walton, NBA hall of famer and back surgery

patient, shares his perspective on life changing

innovation with attendees of AdvaMed 2015.

Caroll Neubauer, chairman and

CEO of B. Braun Medical (at right),

hosts an LCI employee engagement

event in May at the company’s

Bethlehem, Pennsylvania facility,

alongside AdvaMed’s Don May,

executive vice president, payment

and health care delivery policy.

Flyers and ads featuring

patients and allied organizations

supporting repeal of the device

tax helped AdvaMed secure

device tax relief in 2015.

Dusty Donaldson is a cancer survivor and the founder of the Dusty Joy Foundation, whose mission is advancing lung cancer awareness, early detection and compassion for people impacted by lung cancer. Dusty’s cancer was caught early thanks to a CT scan which discovered a five-centimeter tumor in her right lung. She had two-thirds of that lung removed and received chemotherapy.

After treatment, her oncologist said three words few lung cancer patients hear: “You are cured.” September 2015 will mark her 10 year “cancerversary.”

High Point, North Carolina

Support medical innovationRepeal the device tax

Someone you know is counting on research and development to bring to life the next breakthrough in medical progress. With an aging population, people with disabilities living longer lives, and chronic disease rates growing at faster rates, now is the time for more—not less—resources to advance cures and treatments that help people live healthier, longer, and more independent lives.

That’s why patients, patient advocates, leading voices in the disability community, and research organizations oppose the medical device tax. Taxing medical innovation doesn’t make sense, but helping people recover and get back to their home, family, or job does.

“Access to medical imaging saved my life.

I am now advocating for the thousands of

patients who face cancer and other life-

threatening diseases without access to the

most advanced diagnostic equipment and

innovative medical solutions. One obvious

obstacle to patient access is the medical device

tax, which thwarts research and development and

delays progress of new life-saving technologies.”

I support medical innovation

Dusty Donaldson

Mike Kukla is an engineer who led a very active life prior to being diagnosed with stage 4 colon cancer. He ran a 5 or 10K every weekend and enjoyed competing in obstacle course races. One day after a hike, the pain in his stomach was so severe that he ended up in the ER where he was ultimately diagnosed with cancer through a colonoscopy. Mike received lifesaving surgery via a laparoscopic procedure which minimized recovery time. He also received Selective Internal

Radiation Therapy (SIRT), a new innovative treatment of liver metastasis in which the adjacent tissue is spared from excess radiation because it is more targeted and injected directly into the Hepatic artery.

The laparoscopic procedure combined with state-of-the-art SIRT saved Mike’s life and added years to what otherwise might be a very grim prognosis. That was almost 3 years ago.

Hillsboro, Oregon

Support medical innovationRepeal the device tax

Someone you know is counting on research and development to bring to life the next breakthrough in medical progress. With an aging population, people with disabilities living longer lives, and chronic disease rates growing at faster rates, now is the time for more—not less—resources to advance cures and treatments that help people live healthier, longer, and more independent lives.

That’s why patients, patient advocates, leading voices in the disability community, and research organizations oppose the medical device tax. Taxing medical innovation doesn’t make sense, but helping people recover and get back to their home, family, or job does.

“I support repealing the medical device tax because the impact on R&D budgets, especially start-ups, is unsustainable and limits innovation. Thanks to cutting-edge

imaging and radiation therapy technologies, I am almost 3 years into my battle with stage 4

cancer. I continue to work full-time, compete in the occasional 5k, and go on hikes with my dog.”

I support medical innovation

Mike Kukla

Erika Hanson Brown is the founder and mayor of COLONTOWN, a non-profit which builds communities of survivors of gastrointestinal diseases. She’ll never forget the day she was diagnosed with late-stage colon cancer through a colonoscopy. She thought it was a death sentence but was determined not to let the disease win. The next day, a computed tomography (CT) scan revealed the approximate size of the tumor and showed possible signs of cancer of the liver and spleen. Erika underwent

surgery, in which a team of doctors “redesigned” her colon, removing the tumor, her spleen, and 12 lymph nodes.

After six months of chemotherapy, her cancer was in remission. Now, more than 12 years after her diagnosis, Erika is considered “NED” (no evidence of disease) and continues to advocate for the millions of other patients diagnosed each day.

Denver, Colorado

Support medical innovationRepeal the device tax

Someone you know is counting on research and development to bring to life the next breakthrough in medical progress. With an aging population, people with disabilities living longer lives, and chronic disease rates growing at faster rates, now is the time for more—not less—resources to advance cures and treatments that help people live healthier, longer, and more independent lives.

That’s why patients, patient advocates, leading voices in the disability community, and research organizations oppose the medical device tax. Taxing medical innovation doesn’t make sense, but helping people recover and get back to their home, family, or job does.

“As a cancer survivor who has personally benefited from medical imaging technology, I can tell you that what we really need to do is forget about politics and look at the

patients who are adversely affected by the tax. The impact of this devastating tax on

investments in R&D threatens the quality of life for patients across the country.”

I support medical innovation

Erika Hanson Brown

Mark Judge is a father, who was first diagnosed with colon cancer in January 2013 after a pre-test for rotator cuff surgery showed unusually low iron levels in his blood. With no family history of cancer, and no major illness up to that point, he wasn’t a typical candidate for a colonoscopy, but going with his doctor’s recommendation, the test found a stage 3b tumor in his colon.

Mark has gone through radiation, several surgeries, and multiple rounds of chemotherapy. With each surgery and every new chemo treatment, he receives either a positron emission tomography (PET) scan or a computed tomography (CT) scan to monitor his progress.

Without these scans, Mark and his doctors would have no knowledge of what the cancer is doing inside his body and how it is responding to various forms of treatment. Despite a poor initial prognosis, Mark is hopeful that continued access to the latest medical imaging technologies will help guide future treatments and prolong his life. I’m going to continue to fight because of my 11 year old daughter Elly, who is my co-pilot on this journey, and I will not let her down. I need to see her grow up, graduate, and go on to college.

Pittsburgh, Pennsylvania

Support medical innovationRepeal the device tax

Someone you know is counting on research and development to bring to life the next breakthrough in medical progress. With an aging population, people with disabilities living longer lives, and chronic disease rates growing at faster rates, now is the time for more—not less—resources to advance cures and treatments that help people live healthier, longer, and more independent lives.

That’s why patients, patient advocates, leading voices in the disability community, and research organizations oppose the medical device tax. Taxing medical innovation doesn’t make sense, but helping people recover and get back to their home, family, or job does.

“That’s why I fear that the medical device tax, which prevents manufacturers from investing in research and development, will slow the development and

introduction of new, life-saving medical technologies, like the ones that are keeping

me and millions of other patients alive.”

I support medical innovation

Mark Judge

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

19

This year, we strengthened our value message through the release of two AdvaMed- supported studies. One found that leading health systems are able to adopt the latest advances and provide technology-intensive care without having higher Medicare spending than hospitals using less technology. A second study affirmed that medtech has comprised a relatively small and constant share of national health expenditures – at about six percent – for more than two decades. We also bolstered stakeholder education through release of disease-specific communications toolkits on cancer, stroke, atrial fibrillation and chronic wounds, to highlight the extraordinary contributions of medtech innovation.

Empowering medtech employees to share their stories about the benefits of medical progress is a key focus of the LCI campaign, and in 2015 we continued to expand our range and use of multimedia for interactive storytelling. We hosted events with company employees, members of Congress and other stakeholders at AdvaMed member facilities in Pennsylvania, Arizona and Utah to expand awareness of our industry’s unique innovation ecosystem and how we can work together to ensure continued progress.

In 2015, AdvaMed also launched the United4Innovation campaign to amplify our message on the importance of repealing the innovation-crushing medical device tax, with new information, resources and allies, including a web portal that helped generate tens of thousands of letters from repeal support-ers to Capitol Hill. Meanwhile, as part of an ongoing celebration of AdvaMed’s 40th anniversary year, we created an interactive timeline of key milestones of the Association and the industry over our four decades of advocating for innovation, as well as videos and compelling social media to spotlight our progress.

Compelling fact sheets

and media toolkits help

break through the din

in Washington and

elsewhere on issues

of critical importance

to our industry.

Grandmother Deborah Lee was in her 50s and

suffering from severe pain and loss of mobility

when she was first diagnosed with osteoarthritis.

Physicians recommended that Deborah have both

her hips and knees replaced. Today, following joint

replacement surgery, Deborah is grateful for the

innovative orthopedic implants that have relieved

her pain, restored her mobility, and allowed her to

dance again and play with her grandchildren.

P R O F I L E I N I N N O VAT I O N

20

S E C T O R S P O T L I G H T

OPHTHALMIC Members of AdvaMed’s Ophthalmic Devices Sector are focused on creating technologies that preserve, restore and improve healthy eyesight. The Sector meets quarterly to discuss key priorities and is committed to ensuring patient access to these vision-enhancing products.

In 2015, the Sector met with FDA’s Division of Ophthalmic and Ear, Nose and Throat Devices, and the agency’s Office of Surveillance and Biometrics. They discussed how medical device reports of adverse events following laser-assisted in situ keratomileusis (LASIK) and photorefractive keratectomy (PRK) procedures can be updated and improved, and drafted a detailed follow-up document containing recommendations for the types of events that are reportable, in addition to alternative reporting methods and other considerations for LASIK procedures.

ORTHOPEDICOrthopedic devices help patients by restoring mobility, relieving pain and improving quality of life. In 2015, AdvaMed’s Orthopedic Sector continued to support development and maintenance of a single central im-plantable arthroplasty device component database avail-able to all arthroplasty registries. The Sector also approved participation by industry representatives in an initiative to explore creation of a single global hip and knee rating system to address ongoing concerns with the United King-dom’s Orthopedic Data Evaluation Panel rating system.

The Orthopedic Reimbursement Work Group met with Center for Medicare and Medicaid Innovation (CMMI) Deputy Director Rahul Rajkumar to discuss how gainsharing financial incentives in the Bundled Payments for Care Improvement (BPCI) and Comprehensive Care for Joint Replacement (CJR) programs may compromise beneficiary access to the devices they need, in addition to reports that some BPCI providers are purchasing almost exclusively lower-utility devices without considering patients’ long-term needs. They also discussed CMMI’s plans to monitor patient care in bundled payment programs and the need for more transparency around BPCI implementation.

The Sector’s Working Group on Unique Device Identifiers (UDIs) also worked to address issues related to UDI implementation. FDA confirmed that companies that distribute non-sterile devices in trays (e.g., spine, trauma and craniomaxillofacial devices) may use a “cross-reference” approach to meet the requirement to provide UDIs at the point of use. This cost-effective mechanism will enable companies to continue to use existing stock. In another cost-saving effort, FDA confirmed that devices consigned or loaned prior to their UDI implementation date are not subject to the UDI rule, thus preventing these products from being discarded or having to be reworked to be UDI compliant.

SECTOR HEAD

Michael FrazzettePresident Advanced Surgical Devices DivisionSmith & Nephew

SECTOR HEAD

Andy StaparsDirector, Reimbursement and Market AccessAbbott Medical Optics

SECTOR HEAD

Michael PflegerVice President External Affairs and Regulatory PolicyAlcon Laboratories

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

21

RADIATION THERAPYIn 2015, AdvaMed created the Radiation Therapy Sector to address the unique policy challenges facing this dynamic and growing area of medtech innovation, including radiotherapy, brachytherapy and proton therapy technologies. The Sector largely focuses on addressing reimbursement and regulatory issues, as well as promoting the benefits and value of RT, in both U.S. and international markets.

The Sector worked with stakeholders in the RT community to oppose significant proposed Medicare payment cuts, including an advocacy campaign that resulted in more than 200 members of Congress weighing in against the reductions. Ultimately, the proposed cuts were scaled back, and the Sector continues to address other payment concerns included in the final rule.

In concert with the Association for the Advancement of Medical Instrumentation, the Sector also works on critical standards development. In 2015, two standards were in progress, with discussions for future projects also underway.

WOUND HEALING AND TISSUE REGENERATIONAdvaMed’s Wound Healing and Tissue Regeneration Sector is focused on ensuring patient access to innovative therapies for the treatment of chronic and complex wounds. In 2015, the Sector provided comments and recommendations to the Centers for Medicare and Medicaid Services (CMS) on changes impacting multi-component surgical dressings in response to a shift in local coverage policy. The Sector re-engaged on the best strategy for addressing ongoing concerns with appropriate evidence challenges posed by FDA, CMS and other payers, including potential revisions to a previously generated whitepaper and partnering with clinical experts to advance the issue.

In addition, the Sector approved and collected additional funding for the American College of Wound Healing and Tissue Repair, a non-profit organization committed to advancing the field of wound care through education, research and advocacy, to support the organization’s 2016 projects.

Lastly, the group finalized and distributed an infographic that communicates the value of medical technology in wound treatment, expounding upon how advanced wound therapies can improve lives and save costs.

SECTOR HEAD

Joseph F. WoodyPresident and

Chief Executive OfficerAcelity L.P., Inc.

SECTOR HEAD

Jay HoeyExecutive Chairman Elekta Holdings

22

DIAGNOSTICSFOR THE RIGHT CARE

A D VA M E D D X

Kathy Hudson, deputy director for science, outreach and policy at the National

Institutes of Health, addresses an AdvaMedDx Capitol Hill briefing on precision

medicine, adjacent Andy Fish, executive director of AdvaMedDx.

Operating as a division of AdvaMed, AdvaMedDx advocates on behalf of the world’s leading diagnostic manufacturers to promote the value of diagnostic tests for better health and better care. Diagnostics guide the delivery of the right treatment to the right patient at the right time, improving outcomes for people around the world while, in many cases, lowering overall health care costs.

In 2015, AdvaMedDx continued proactive initiatives to support diagnostics developers and bring about major payment and policy reforms. These efforts included:

• Working closely with the Centers for Medicare and Medicaid Services (CMS) and other key stakeholders to ensure effective implementation of diagnostics payment reform provisions of the Protecting Access to Medicare Act, including assign-ment of unique identifiers to existing and new tests, and use of temporary codes to expedite coverage decisions and facilitate payment.

• Developing comprehensive policy on reforming diagnostics oversight and working closely with FDA, key congressional committees and other stakeholders to advance reform legislation. AdvaMedDx also supported a number of innovation provisions included in 21st Century Cures legislation in the House.

AdvaMedDx continued its high visibility advocacy and public affairs activities in the U.S. and abroad by partnering with stake-holder organizations. In 2015, AdvaMedDx focused on areas of critical importance to patient and public health, including the threat of infectious diseases and antibiotic resistance, as well as developments in precision medicine, in which diagnostics play a cornerstone role in dramatic advances in care and treatment. Specific initiatives included:

• Partnering with the administration on the Combating Antibiotic-Resistant Bacteria initiative, including participating in the White House Forum on Antibiotic Stewardship, to help educate policymakers on the critical role of diagnostics in fighting antibiotic resistance.

• Organizing a diagnostics day at the Centers for Disease Control and Prevention to forecast the future development of diagnostic tests that can contribute to the fight against antibiotic resistance and better understand how to overcome barriers to development and utilization of such tests.

• Partnering with the American Cancer Society Cancer Action Network on a series of roundtables on personalized medicine in Ohio, California, Pennsylvania, North Carolina and Florida.

• Supporting two U.S.-based briefings in partnership with leading cancer organizations focused on precision medicine and how patients, physicians, the diagnostics industry, and others can work together to give health care providers the tools and information they need to make personalized treatment decisions for their patients.

• Conducting the fourth annual diagnostics briefing at the World Health Assembly focused on the role of diagnostics in global infectious disease outbreaks.

Arnd Kaldowski, president of Beckman

Coulter Diagnostics at Danaher (at right),

and John Hertia, Bio-Rad executive vice

president and president, clinical diagnostics,

participate in an AdvaMedDx Board meeting

in San Diego.

Vital Insights Transforming Care

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

23

Jeff BinderPresident andChief Executive OfficerImmucor

Douglas BryantPresident andChief Executive OfficerQuidel Corporation

John KershawPresident andChief Executive OfficerSysmex America, Inc.

Christopher D. KerskiSenior Vice President,Scientific ProductionCardinal Health

Brian MillerManaging PartnerLinden Capital Partners

Namal NawanaPresident andChief Executive OfficerAlere, Inc.

Michael ReitermannChief Executive OfficerSiemens Healthcare Diagnostics

Peer M. SchatzChief Executive OfficerQiagen

Carsten SchroederPresident Grifols Diagnostic Solutions

Robert SchummVice President,Managing DirectorAscensia Diabetes Care

Norman SchwartzChairman, President andChief Executive OfficerBio-Rad Laboratories, Inc.

Mark StraleyChief Executive OfficerAgendia

Werner VerbiestGlobal Head, Janssen Diagnostics Johnson & Johnson

Stephane ZamiaChief Executive OfficerHead of All AmericasDiagnostica Stago

Eric B. ComptonChief Operating OfficerHologic, Inc.

Jack J. PhillipsPresident and Chief Executive OfficerRoche Diagnostics Corporation

Robert T. Schruender President and Chief Operating OfficerSekisui Diagnostics

Brian J. Blaser Executive Vice President Diagnostics ProductsAbbott

Arnd KaldowskiPresident, Beckman Coulter DiagnosticsDanaher

Linda TharbyExecutive Vice President and President, Life SciencesBD

John L. BishopChairman and Chief Executive OfficerCepheid

Stefan WillemsenCorporate Vice PresidentAmericas,President andChief Executive OfficerbioMerieux, Inc.

Jennifer PaineExecutive Vice President,Worldwide Quality, Regulatory and ComplianceOrtho Clinical Diagnostics, Inc.

DXEXECUTIVE COMMITTEE

DX BOARD OF DIRECTORS

* as of December 31, 2015

24

AdvaMed Accel – formerly the Emerging Growth Company Council – was rebranded in 2015 to better reflect its ongoing commitment to accelerating the growth and success of small medical technology companies. Leveraging the resources of the entire Association, Accel is the only organization of its kind focused specifically on the unique needs and challenges of emerging and early growth enterprises – the lifeblood of the medtech industry. Accel provides advocacy for a policy environ-ment more conducive to capital formation and innovation; insight into ever-changing regulatory, reimbursement, compliance and business environments; and opportunity for more member engagement with peers, subject matter experts and policymakers, to help small companies prosper.

TAX EXTENDERS LEGISLATIONLong-standing AdvaMed advocacy paid off in December when Congress passed – and the president signed – year-end tax extenders legislation with key provisions of particular benefit to small medical technology companies. These provisions includ-ed: a two-year suspension of the innovation-crushing medical device tax; a permanent extension of the R&D tax credit; a permanent small-business expensing limitation and phase-out amount at the $500,000 and $2 million level, respectively; a permanent exclusion of 100 percent of the capital gain on certain small business stock; and extended bonus depreciation.

ROUNDTABLES & CONFERENCESAdvaMed Accel convened an industry roundtable in conjunction with the Piper Jaffray Health Care Conference in November to discuss opportunities for reinvigorating the medtech innovation ecosystem for the 21st century. The roundtable – which included small and large companies, investment banks, and venture capital firms – discussed challenges and opportunities related to key issues, including: medtech reimbursement and venture capital funding; educating Congress and policymakers in support of vital policy goals; facilitating partnerships and other business opportunities; and shifting Wall Street’s mindset to ensure greater focus on R&D pipelines. It is anticipated that these topics will be revisited at future roundtables in 2016 and beyond.

Meanwhile, AdvaMed’s annual MedTech Conference included expanded programming for small companies, with unmatched opportunities to gain insight and make business connections. The Innovation Showcase featured presentations by 48 emerging growth companies, while the MedTech Innovator finals highlighted four early-stage firms vying for over $300,000 in prizes.

PHYSICIAN-OWNED INNOVATORSIn 2015, the Association furthered its advocacy efforts with regard to hospital purchasing policies targeting physician-owned distributors (PODs) that also unfairly discriminate against physician-owned medical technology manufacturers. AdvaMed organized meetings with Senate Finance Committee staff to educate them on the issue, provided related resources on the Association’s website, and submitted written testimony for a Finance Committee hearing that included discussion of the importance of differen t iating between PODs and physician-owned innovators.

ACCELERATING SMALL COMPANY GROWTH

A C C E L

Ross Jaffe, managing director at Versant

Ventures (at right), discusses issues

surrounding investment in early-stage

device firms with Accel Board members

in October, including Ken Reali, president

and CEO of Clinical Innovations.

Tom Ryan, CEO of Thermatome (at left) accepts on behalf of his company the AdvaMed

Accel Virginia Shimer Rybski Memorial Award, presented at AdvaMed 2015 by Accel

Chairman Nadim Yared, president and CEO of CVRx. The award is presented each

year to promising medtech entrepreneurs.

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

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ACCELEXECUT IVE COMMITTEEACCELERATING SMALL COMPANY GROWTH

Patrick DalyPresident and Chief Executive OfficerCohera Medical, Inc.

Nadim YaredPresident and Chief Executive OfficerCVRx, Inc.

Michael Dale President and Chief Executive OfficerGI Dynamics, Inc.

John Kilcoyne President and Chief Executive OfficerReVision Optics, Inc.

Scott BrooksPresident and Chief Executive OfficerRegenesis Biomedical, Inc.

ACCEL BOARD OF DIRECTORS

Randall S. BarkoPresident and Chief Executive OfficerXimedica

Shawn FojtikChief Executive OfficerControl Medical Technology

Rick GeoffrionChief Executive OfficerMitralign, Inc.

Todd M. PopePresident and Chief Executive OfficerTransEnterix Surgical, Inc.

Ken Reali President and Chief Executive OfficerClinical Innovations

Martha ShadanPresident andChief Executive OfficerRotation Medical

John F. SomersPresident and Chief Executive OfficerHarmac Medical Products, Inc.

Ann BunnenbergPresident andChief Operating OfficerElectrical Geodesics, Inc.

* as of December 31, 2015

Cathy Burzik, general partner at Targeted Technology and

former president and CEO of Kinetic Concepts (at left),

participates in an AdvaMed 2015 “CEOs Unplugged”

panel on the innovation ecosystem with Caroll Neubauer,

chairman and CEO of B. Braun Medical (at right).

26

AdvaMed’s annual conference and exhibition travelled across the country to San Diego in 2015, its first time on the West Coast. This year’s conference represented a spectacular celebration of AdvaMed’s 40th anniversary, with an audience of over 2,300 attendees representing over 900 companies and stakeholder groups from 26 countries. The conference also featured its largest- ever exhibit hall, with more than 140 exhibitors displaying their latest products and services, demonstrating once again that AdvaMed 2015 was “the place to be.”

Attendees were drawn by the unique combination of partici-pants and presenters – including those from small, medium and large companies; local, national and international govern-ments; academia; and the financial community – that provided unmatched opportunities to gain insight, network and make business connections. Highlights included 35 world-class educational panels addressing key regulatory, reimbursement, compliance, legal, business and international issues, with special tracks focusing on in vitro diagnostics, emerging growth companies, finance, e-health and other areas.

Through such popular and informative offerings as the CEOs Unplugged Series and Entrepreneurship Boot Camp, attendees had the opportunity to hear from and interact with some of the key movers and shakers in our diverse and dynamic industry.

New to this year’s confer-ence, the Innovation Showcase featured presentations by 48 emerging growth compa-nies, giving attendees, potential investors and partners a compelling glimpse of the latest

“THE PLACETO B E”A D V A M E D 2 0 1 5

Michael Eisner, former

chairman and CEO of the

Walt Disney Company,

speaks at a plenary lunch

on creativity, innovation

and the value of great

partnerships.

Janet Trunzo, AdvaMed senior executive vice

president, technology and regulatory affairs

(at left), moderates a CDRH Town Hall meeting

with agency leaders, including (from left to right)

CDRH Director Jeff Shuren; Bill MacFarland,

director, Division of Enforcement B, Office of

Compliance; Owen Faris, acting clinical trials

director, Office of Device Evaluation; Tahseen

Mirza, deputy director, policy and administration,

Office of Surveillance and Biometrics; and Alberto

Gutierrez, director, Office of In Vitro Diagnostics

& Radiological Health.

General Stanley McChrystal (retired) shares his insights on leadership,

teamwork and geopolitical affairs with conference attendees, including

John Kilcoyne, president and CEO of ReVision Optics (at right).

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

27

in cutting-edge medical technologies. In another first for the conference, AdvaMed 2015 hosted the MedTech Innovator finals, with four early-stage company finalists presenting their products, vying for over $300,000 in prizes, and a winner – MobileODT – selected by live audience vote.

Of particular interest was AdvaMed 2015’s stellar line-up of distinguished plenary speakers, who shared their unique insights on diverse leadership and business challenges, including General Stanley McChrystal (retired), Michael Eisner, former head of the Walt Disney Company, and Eric Topol, renowned physician and author. The conference also featured an interactive “Town Hall” forum with FDA Center for Devices and Radiological Health Director Jeffrey Shuren and other senior device center leaders, focused on the future direction of the agency and medtech innovation, while CMS’s Tamara Syrek Jensen, director of the Medicare agency’s Coverage and Analysis Group, discussed the evolving reimbursement landscape with conference attendees.

One of the most engaging and moving events of AdvaMed 2015, however, was the recognition of one of the industry’s true pioneers – renowned cardiovascular surgeon, balloon catheter inventor and entrepreneur Thomas J. Fogarty – with the third annual AdvaMed Lifetime Achievement Award.

Eric Topol, renowned physician,

author, and director of the Scripps

Translational Science Institute,

speaks at a plenary lunch on

“The Future of Health Care.”

Renowned cardiovascular surgeon,

balloon catheter inventor and

entrepreneur Thomas J. Fogarty

(center) receives AdvaMed’s third

annual Lifetime Achievement Award,

alongside AdvaMed 2015 Co-Chair

Michael Mussallem, chairman and

CEO of Edwards Lifesciences (at

right), and Barry Liden, vice president

of government affairs at Edwards

Lifesciences (at left).

Ariel Beery, CEO and cofounder of MobileODT (at right), accepts the MedTech Innovator grand prize

from Paul Grand, managing director at RCT Ventures and producer and emcee of the awards.

28

BOARDOF D IRECTORS

L E A D E R S H I P

Robert AbernathyChairman andChief Executive OfficerHalyard Health

Andre-Michel BallesterChief Executive OfficerLivaNova

Brian BlaserExecutive Vice President,Diagnostics ProductsAbbott

Scott BrooksPresident and Chief Executive OfficerRegenesis Biomedical, Inc.

Ann BunnenbergPresident andChief Operating OfficerElectrical Geodesics, Inc.

Donald CaseyChief Executive Officer,Medical SegmentCardinal Health

Michael DalePresident andChief Executive OfficerGI Dynamics, Inc.

Patrick DalyPresident andChief Executive OfficerCohera Medical, Inc.

Timothy DuganManaging PartnerWater StreetHealthcare Partners

David EndicottPresident,Hospira Medical DevicesHospira

Brik EyreCorporate Vice Presidentand President,Hospital ProductsBaxter International

Camille FarhatPresidentAmerican Medical Systems

Michael FarrellChief Executive OfficerResMed

Michael FrazzettePresident,Advanced SurgicalDevices DivisionSmith & Nephew

Jeff GeorgeDivision Head and PresidentAlcon

John GreischPresident andChief Executive OfficerHill-Rom Holdings, Inc.

Thomas HookPresident andChief Executive OfficerGreatbatch, Inc.

John KilcoynePresident andChief Executive OfficerReVision Optics, Inc.

Stephen P. MacMillanChairman, President andChief Executive OfficerHologic, Inc.

Alan MainGlobal President,Bayer Medical CareBayer Healthcare

V. George MaliekelPresidentHollister, Inc.

Jeffery A. McCaulleyPresident andChief Executive OfficerSmiths Medical

Michael MogulPresident andChief Executive OfficerDJO Global, Inc.

David PerezPresident andChief Executive Officer, Terumo BCT, Inc. Chairman,Terumo Global Blood Management Business

Michael PhalenExecutive Vice President and President, MedSurgBoston Scientific

Jack PhillipsPresident andChief Executive OfficerRoche Diagnostics Corporation

Mojdeh PoulPresident,Infection Prevention Division3M Health Care

Walter M. Rosebrough, Jr. President andChief Executive OfficerSteris Corporation

Michael RousseauPresident and Chief Executive OfficerSt. Jude Medical

Brent ShaferChief Executive Officer Philips North America

Benson SmithChairman, President and Chief Executive OfficerTeleflex, Inc.

Dow WilsonPresident andChief Executive OfficerVarian Medical Systems, Inc.

Joseph WoodyPresident and Chief Executive OfficerAcelity L.P., Inc.

* as of December 31, 2015

A D V A M E D 2 0 1 5 A N N U A L R E P O R T

29

EXECUTIVECOMMITTEE

L E A D E R S H I P

Michael R. MinogueChairman, President and Chief Executive OfficerAbiomed, Inc.

Lester B. KnightFounding Partner and Chairman RoundTable Healthcare Partners

Michael A. MussallemChairman and Chief Executive OfficerEdwards Lifesciences

David C. Dvorak President and Chief Executive Officer Zimmer Biomet

Peter J. Arduini President and Chief Executive OfficerIntegra LifeSciences

Nadim Yared President and Chief Executive OfficerCVRx, Inc.

Vincent A. ForlenzaChairman, President and Chief Executive OfficerBD

Kevin A. LoboChairman and Chief Executive OfficerStryker Corporation

Timothy M. RingChairman and Chief Executive Officer C. R. Bard, Inc.

Gary Pruden Executive Vice President, Worldwide Chairman Medical DevicesJohnson & Johnson

John L. Bishop Chairman and Chief Executive OfficerCepheid

Joseph DeVivo President and Chief Executive OfficerAngioDynamics, Inc.

Michael GenauSenior Vice President and President, Americas RegionMedtronic

Caroll NeubauerChairman andChief Executive OfficerB. Braun Medical, Inc.

701 Pennsylvania Avenue, NW

Suite 800

Washington, DC 20004-2654

Telephone: 202.783.8700

Fax: 202.783.8750

www.advamed.org