Medtronic’s move to Ireland has prompted Fortune to kick the company off of its Fortune 500 list. The company would have been number 185 on the list.
The company was acquired by Dublin, Ireland-based medical device maker Covidien for $42.9 million, but continues to operate its headquarters in Minneapolis, Minnesota. Under current law, U.S corporations pay taxes to whichever nation its domicile resides in, but companies can easily bring those profits back to the U.S. without them being taxed at higher rates, according to MinnPost. Medtronic CEO Omar Ishrak told the Financial Times in June of last year that this was the company’s goal.
“The financial structure and optimization of tax discussion came after. The tax rates for Medtronic do not change a significant amount, but the structure gives us access to the cash generated by Covidien assets abroad, which we can then reinvest into US technologies,” Ishrak said.
“The Fortune 500 is going to remain a list of companies based in the U.S.,” Scott DeCarlo, Fortune’s list editor, told The Washington Post (The Post). “We want to maintain the integrity of the list.” Ten companies have been kicked off the Fortune list since 2000 for leaving the country.
In recent years, Medtronic has issued recalls of several of its devices including its Spring Fidelis defibrillator leads, SynchroMed Pain Pump and Sigma pacemakers. The true thorn in Medtronic’s side has been the company’s Infuse bone graft product, however. More than 1,000 lawsuits have been filed on behalf of patients who allege the device caused them catastrophic, even deadly, injuries such as severe swelling of the neck; difficulty breathing, speaking and swallowing; ectopic or uncontrolled bone growth at the site of the surgery; nerve injuries resulting in severe and chronic pain; ongoing or chronic radiating pain in the legs or arms; male sterility; retrograde ejaculation or other uro-genital injuries in male patients; Cauda Equina Syndrome (CES), and even cancer.
A lawsuit was filed against Medtronic earlier this month on behalf of patients who suffered these injuries after undergoing surgery in which Infuse was used. The suit alleges the company used a false and deceptive marketing scheme intended to promote Infuse for off-label purposes.