Aetna Recognizes the Medical Importance of INFUSE Bone Graft; Insurer Helps Patients Gain Access to State-of-the-Art Bone Graft Replacement for Spinal Fusion.

Business Editors/Health/Medical Writers

MEMPHIS, Tenn.--(BUSINESS WIRE)--March 19, 2004

Medtronic, Inc. (NYSE:MDT) announced today that Aetna, a provider of health care benefits for more than 13 million people, has recognized the medical importance of using INFUSE(R) Bone Graft together with the LT-CAGE(R) Lumbar Tapered Fusion Device.

In Aetna's Clinical Policy Bulletin, released last month, the company acknowledged INFUSE Bone Graft as "medically necessary" for spinal fusion procedures if certain medical standards are met. INFUSE Bone Graft reduces the pain and complications associated with treating degenerative disc disease by eliminating the second surgery required to harvest bone from a patient's hip for implantation in the spine. This determination represents a trend toward providing patients greater access to this revolutionary biologic technology.

Aetna's bulletin follows the October 2003 incorporation of the INFUSE Bone Graft add-on payment by the Center for Medicare and Medicaid Services (CMS). It was the first time CMS approved such a payment for a new medical device, allowing for supplemental reimbursement to the existing spine surgery payments.

"These announcements support the growing evidence that INFUSE Bone Graft is the gold standard for lumbar interbody spinal fusion with a cage," said Michael DeMane, president of Medtronic Sofamor Danek, the spinal business of Medtronic. "These positive decisions will provide a greater number of surgeons access to the best patient care available."

INFUSE Bone Graft - Proven, Predictable

INFUSE Bone Graft is the only bone graft replacement to receive a Pre-Market Approval (PMA) specifically for use in lumbar spinal fusion procedures to treat degenerative disc disease. INFUSE Bone Graft contains rhBMP-2, a genetically engineered version of a naturally occurring human protein, which is capable of inducing normal bone formation or bone regeneration in specific, targeted areas of the spine, making it unnecessary to harvest bone from patients.

Degenerative disc disease occurs when discs in the spine are deteriorating or damaged, and can be extremely painful and debilitating in patients who generally lead active lives. Pain emanates from the damaged discs themselves or is caused by the discs or bone impinging on nearby nerve roots or the spinal cord. Approximately 250,000 people last year required spinal fusion surgery to relieve their low back pain.

To use INFUSE Bone Graft, surgeons reconstitute the rhBMP-2 powder with sterile water and then apply it to collagen sponges. The sponges are inserted inside titanium cages to stabilize the spine while it is fusing and also maintain the proper height between the vertebrae. Patients seeking information on INFUSE Bone Graft can visit www.back.com.

About Medtronic Sofamor Danek

Medtronic, Inc., headquartered in Minneapolis, is the world's leading medical technology company, providing lifelong solutions for people with chronic disease. Medtronic Sofamor Danek, the company's Spinal business, is the global leader in today's spine market and is committed to advancing the treatment of spinal and cranial disorders. Headquartered in Memphis, Medtronic's Spinal business has collaborated with world-renowned surgeons and researchers to develop state-of-the-art products and technologies that offer surgeons and their patients a range of solutions for neurological and spinal conditions that is unmatched in the medical industry. Additional information can be found at www.medtronicsofamordanek.com/patient-spinal-infuse.html. For more information on Aetna's bone graft policy, visit www.aetna.com/cpb/data/CPBA0411.html.

INFUSE(R) Bone Graft + LT CAGE(R) Device, INFUSE(R) Bone Graft + INTER FIX(TM) Device, and INFUSE(R) Bone Graft + INTER FIX(TM) RP Device incorporate technology developed by Gary K. Michelson, M.D.

Any statements made about the company's anticipated financial results and regulatory approvals are forward-looking statements subject to risks and uncertainties such as those described in Medtronic's Annual Report on Form 10-K for the year ended April 25, 2003. Actual results may differ materially from anticipated results.