Post-Election Commentary—Stryker

Katherine Owen, vice president of strategy and investor relations at Stryker, speaking during the Stifel 2016 Healthcare Conference on November 16:

"I would say it's very much business as usual. I think there's optimism that corporate tax reform may be much more of a reality, which like many companies, we have a trapped cash problem. We generate about two-thirds of our cash outside the U.S. and continue to build up cash OUS. We would welcome tax reform.

Owen

I think it makes it more likely that the medical device tax, which has been suspended, either is permanently suspended or repealed. Obviously, we think that would be a positive. It gives us the opportunity to invest more into R&D, into innovation, into our sales force.

Probably one of the biggest areas of uncertainty is really around ACA and whether or not it gets recast or somehow altered. I will tell you, we never saw any real impact from ACA in terms of volumes. Prior to it happening, we thought we might see some uptick in our medical business as hospitals might look to upgrade, but that never really materialized in any discernible way. So, to the degree that there's uncertainty with ACA, we don't really see the volume impact being significant. 

I think when people talk about hospital capital budgets potentially coming under pressure, the majority of our capital products tend to be much more product cycle-driven. To put it in perspective, about 15% of our total sales are capital . . . so if you look at just the medical piece, in the U.S. it's going to be low single-digits in terms of our total sales. To the degree there is concern there, when we put it in perspective it's very manageable . . . 

I don't think it will have an impact as it relates to MAKO. That is always a non-budgeted item when you go in to sell a $1 million robot.

We view it as more of the same. We'll obviously watch to see what happens on the tax reform side and any repatriation, but beyond that, I don't see a real big impact--recognizing there are a lot of details that we're all going to be looking for."