Unify Quadra ™ CRT-D Quartet ® LV Lead

1. Unify Quadra™ CRT-D Quartet® LV Lead Unify QuadraTM CRT-D Economic Benefits SJM Confidential – For Internal Use Only

2. Disclaimer • Reimbursement information and economic value attributed to reductions in surgical LV lead revisions, fluoroscopy utilization and the opportunity cost of EP lab time is presented for illustrative purposes only.  The reimbursement information should not be interpreted as a guarantee of reimbursement or as endorsed by Medicare, Medicaid, or any insurance carrier, and does not constitute reimbursement or legal advice.  • The incremental economic value associated with quadripolar lead technology is presented herein as an analytical framework.  The assumptions underlying these calculations may not be generalizeable to individual hospitals or EP labs.  Laws, regulations, and payor policies concerning reimbursement are complex and change frequently.  All medical necessity determinations must be made by the responsible clinician.  • The person or entity submitting claims for reimbursement is solely responsible for ensuring appropriate filing and content of any particular claim.  Persons who submit false and fraudulent claims for reimbursement are subject to significant civil or criminal penalties. SJM Confidential – For Internal Use Only 2

3. HHS Has Taken Aim At Heart Failure Readmissions1 • HF is #1 Medicare expenditure for preventable readmissions • The Department of Health & Human Services (HHS) is implementing numerous strategies to improve performance 1. MEDPAC, “Report to Congress: Promoting Greater Efficiency in Medicare”, June 2007. Advisory Board Cardiovascular Roundtable Research & Analysis as reported in Publication 20286C entitled “Transformative Care Delivery, Part II: Reducing Preventable Readmissions”. 3 SJM Confidential – For Internal Use Only

4. HHS Has Already Brought Visibility to HF Readmissions • Data is publicly available through HHS’ Hospital Compare initiative.1 • Uniformly tracking heart failure readmissions is only the first step… Hospital A Hospital B Hospital C % % % • The above image is a screen capture from the HHS website http://www.hospitalcompare.hhs.gov; only the names of the hospitals have been changed. • Hospital Readmissions Reduction Program (HR 3590 Section 3025). SJM Confidential – For Internal Use Only

5. Next Step: Penalize Facilities with High Readmissions Hospital Readmissions Reduction Program (HR 3590 Section 3025) • Penalizes hospitals for “excess” readmissions above acceptable threshold • Initially covers three focus areas: HF, AMI, Pneumonia1 • Penalties are defined based upon the aggregate cost of treating excess readmissions across these initial three focus areas subject to a payment cap2 • Effective October 1, 2011, CMS will begin collecting Medicare claimsdata for use in determining possible excess readmission penalties for FY 2013.1,3 FY 2013 penalties based on readmission data collected FY 2012 (Oct 1, 2011 – Sep 30, 2012) • Hospital Readmissions Reduction Program (HR 3590 Section 3025). • The penalty cap is expressed as a percentage of Medicare inpatient operating payments received over the course of the fiscal year by a particular facility across all DRGs (medical & surgical, regardless of the principal diagnosis of the patient). The penalty cap / payment adjustment factor can be no more than 1% in FY2013, the first year the program will be implemented, and will be phased in until the full adjustment factor of 3% is reached by FY2015. • Penalties are based on trailing 12 months worth of readmissions data. SJM Confidential – For Internal Use Only

6. Payment “At Risk” for Excess Readmissions Example New York Facility • Inpatient Medicare base operating payment $25M1 • Urban teaching hospital (100 + residents)1 • 300 to 499 beds1 • National average Medicare payment, $7,3611 • Readmission rate for HF, 29.6% (11th highest in state) (national average, 24.7%)2 Because readmission rates for each hospital will be publicly available on the CMS website, the public will become increasingly aware of hospital performance, and provider reputation and market share may be impacted 1 2009MedPAR Data 2 HHS Hospital Compare (http://www.hospitalcompare.hhs.gov/staticpages/for-consumers/ooc/readmission-measures.aspx) Maximum Payment “At Risk” FY 2013 (1% of base operating payments) $250,000 FY 2014 (2% of base operating payment) $500,000 FY 2015 and beyond (3% of base operating payments) $750,000 SJM Confidential – For Internal Use Only 6

7. Problem: Inability to Pace at the Preferred Site Can Lead to Higher HF Admissions in General • MADIT-CRT data showed that LV pacing in a basal or mid-ventricular location reduced propensity for heart failure or death by 42% (P<0.02) when compared to apical pacing1 • The problem is that the only stable position is often a distal apical location. Solution: Quadripolar Technology • Quartet™ lead can be placed distally, but still allow for basal pacing with more proximal electrodes • Enables LV pacing at the preferred site without compromising lead stability • Singh, JP, HRS 2010 Late-Breaking Clinical Trials "Left Ventricular Lead Position and Clinical Outcomes: Findings from MADIT-CRT“ • Merchant, F.M. et al. Impact of segmental left ventricle lead position on cardiac resynchronization therapy outcomes. Heart Rhythm. 2010 May;7(5):639-44.

8. The Potential for Optimizing EP Lab Time 4,5 • EP lab time is a valuable commodity. • Unify Quadra™ CRT-D can potentially save EP lab time and enable increased lab throughput and/or scheduling flexibility. The 4.0% SLR rate depicted for the bipolar arm comes from the MADIT-CRT study; The RAFT & CARE-HF studies reported even higher SLR rates. EP Lab Time Optimization: Contribution Margin Per Unit of Time 1 Avoiding revisions improves case mix 40 min time savings @ $61/min = $2440 economic benefit6 $61/minute average 2,3 Estimated 40 minute Δ [Contribution margin is defined as reimbursement less device cost and less an $800/case allowance for medical & office supply costs] • Contribution margin as it is defined here depicts the net payments received by a hospital that go toward covering a facility’s fixed costs. It is based on Medicare national base rates for outpatient services less estimated device costs and an $800/case allowance for medical supply costs (this equates to an average supply cost of 5% per dollar of reimbursement received for CRM services, consistent with HRS calculators) divided by an estimate of average procedure times from a third-party survey conducted by in2ition Research. Procedure times have been grossed up by an additional 20 minutes to allow for lab turnover between cases. All data remains on file with SJM. • 2. Dänschel, W. et al. Initial clinical experience with a novel left ventricular quadripolar lead. Oral Session 183/5. Europace, 2010; 12 (suppl 1): i127 • Duray, G.Z. et al. Coronary sinus side branches for cardiac resynchronization therapy: prospective evaluation of availability, implant success. Journal of Cardiovascular Electrophysiology Vol. 19, No. 5, May 2008. • Quartet LV lead surgical revision rate based on internal data from pre-approval studies, data on file. • Moss AJ, et al. MADIT-CRT Trial Investigators. Cardiac-resynchronization therapy for the prevention of heart-failure events. N Engl J Med. 2009 Oct 1;361(14):1329-38. Epub 2009 Sep 1. • The $2440 figure depicted above represents the average increase in contribution margin that could potentially be realized if 40 minutes of procedure time is redeployed to increasing lab throughput. 8 SJM Confidential – For Internal Use Only

9. The Potential for Optimizing EP Lab Time 4,5 • EP lab time is a valuable commodity. • Unify Quadra™ CRT-D can potentially save EP lab time and enable increased lab throughput and/or scheduling flexibility. The 4.0% SLR rate depicted for the bipolar arm comes from the MADIT-CRT study; The RAFT & CARE-HF studies reported even higher SLR rates. EP Lab Time Optimization: Contribution Margin Per Procedure 40 min/procedure time savings x 2 CRT-D procedures/day = 1 hour & 20 minute time savings every day This is plenty of time to add on an additional case! __________________________________________ Moreover, EPs now have additional time to spend in the clinic meeting with both existing and new patients 1 Avoiding revisions improves case mix 40 min time savings @ $66/min = $2640 economic benefit6 2,3 Estimated 40 minute Δ • Contribution margin as it is defined here depicts the net payments received by a hospital that go toward covering a facility’s fixed costs. It is based on Medicare national base rates for outpatient services less estimated device costs and an $800/case allowance for medical supply costs (this equates to an average supply cost of 5% per dollar of reimbursement received for CRM services, consistent with HRS calculators) divided by an estimate of average procedure times from a third-party survey conducted by in2ition Research. Procedure times have been grossed up by an additional 20 minutes to allow for lab turnover between cases. All data remains on file with SJM. • 2. Dänschel, W. et al. Initial clinical experience with a novel left ventricular quadripolar lead. Oral Session 183/5. Europace, 2010; 12 (suppl 1): i127 • Duray, G.Z. et al. Coronary sinus side branches for cardiac resynchronization therapy: prospective evaluation of availability, implant success. Journal of Cardiovascular Electrophysiology Vol. 19, No. 5, May 2008. • Quartet LV lead surgical revision rate based on internal data from pre-approval studies, data on file. • Moss AJ, et al. MADIT-CRT Trial Investigators. Cardiac-resynchronization therapy for the prevention of heart-failure events. N Engl J Med. 2009 Oct 1;361(14):1329-38. Epub 2009 Sep 1. • The $2440 figure depicted above represents the average increase in contribution margin that could potentially be realized if 40 minutes of procedure time is redeployed to increasing lab throughput. 9 SJM Confidential – For Internal Use Only

10. Potential Economic Benefit of Unify Quadra™ CRT-D The following example depicts potential economic benefits accruing to a hospital performing 100 CRT-D procedures per year. All estimates are based upon national average payment rates, average device acquisition costs & an estimate of supply costs, etc. as depicted in the footnotes to this table and in the data presented in slide 8 (which depicts the opportunity cost model on which this table is based). 1. Data compiled from clinical study results, on file at St. Jude Medical in Report 60034670. 2. Moss AJ, et al. MADIT-CRT Trial Investigators. Cardiac-resynchronization therapy for the prevention of heart failure events.N Engl J Med. 2009 Oct 1;361(14):1329-38. Epub 2009 Sep 1. 3. Dänschel, W. et al. Initial clinical experience with a novel left ventricular quadripolar lead. Oral Session 183/5. Europace, 2010; 12 (suppl 1): i127 4. Duray, G.Z. et al. Coronary sinus side branches for cardiac resynchronization therapy: prospective evaluation of availability, implant success. Journal of Cardiovascular Electrophysiology Vol. 19, No. 5, May 2008. Also note that a meta analysis of MIRACLE, COMPANION, MUSTIC and additional published implant times show a decrease in procedural times as leads and tools have allowed for greater efficiencies. 5. Profitability based on Medicare national base rates for outpatient services less estimated device cost divided by an internal estimate of average procedure times (see prior slide). Internal file. 6. Medicare National Payment Rate (2011) for APC 105 of $1566 multiplied times the number of expected lead revisions. 7. Market Research Survey of n=50 High Volume Eps conducted by in2ition Research. All data remains on file with St. Jude Medical. 10 SJM Confidential – For Internal Use Only

11. Additional Considerations • Patient & physician exposure considerations of fluoroscopy reduction • Implications to physician recruitment and retention • Infection rates stemming from surgical repositioning of LV leads have implications for JCAHO (Joint Commission) certification2 • Fewer surgical revisions translates into fewer opportunities for hospital acquired infections (another hot button for CMS) • Singh, Jagmeet P. et al, “Left Ventricular Lead Position and Clinical Outcome in the Multicenter Automatic Defibrillator Implantation with Cardiac Resynchronization Therapy (MADIT-CRT) Trial”. Circulation. 2011; 123:1159-1166. • NPSG.07.05.01 states that “surgical site infection rates are tracked for an entire year following insertion of an implantable device.” 11 SJM Confidential – For Internal Use Only

12. Unify Quadra™ CRT-D and Quartet® LV Lead Summary of Potential Economic Benefits • Improved Surgical Efficiency / Shorter Procedure Times • 28% reduction in implant times and 55% lower fluoroscopic exposure1,2 • EP lab time is not free – there is an implicit opportunity cost • Potential to drive increased throughput and/or scheduling flexibility • Avoidance of surgical lead revisions & associated cost of infections • 70% reduction in surgical lead revisions3-5 • Opportunity to pace in most optimal location, which can help facilitate better long-term outcomes on measures HHS will be score-carding • HF readmission rates will be under tremendous scrutiny • MADIT-CRT demonstrated a 42% reduction in HF admissions or death in patients paced at basal or mid-ventricular sites compared to those patients paced apically6 • Unify Quadra™ CRT-D and Quartet® LV lead enable LV pacing at the preferred site without compromising lead stability • 1 Dänschel, W. et al. Initial clinical experience with a novel left ventricular quadripolar lead. Oral Session 183/5. Europace, 2010; 12 (suppl 1): i127 • 2. Duray, G.Z. et al. Coronary sinus side branches for cardiac resynchronization therapy: prospective evaluation of availability, implant success. Journal of Cardiovascular Electrophysiology Vol. 19, No. 5, May 2008. • Data compiled from clinical study results, on file at St. Jude Medical in Report 60034670M • Moss AJ, et al. MADIT-CRT Trial Investigators. Cardiac-resynchronization therapy for the prevention of heart-failure events. N Engl J Med. 2009 Oct 1;361(14):1329-38. Epub 2009 Sep 1. • Gras D, Böcker D, et al. CARE-HF Study Steering Committee and Investigators. Implantation of cardiac resynchronization therapy systems in the CARE-HF trial: procedural success rate and safety. Europace. 2007 Jul;9(7):516-22. Epub 2007 May 31. • Singh, Jagmeet P. et al, “Left Ventricular Lead Position and Clinical Outcome in the Multicenter Automatic Defibrillator Implantation with Cardiac Resynchronization Therapy (MADIT-CRT) Trial”. Circulation. 2011; 123:1159-1166. SJM Confidential – For Internal Use Only