August 18, 2022

Research Florida

Striking Rein-Gold: A profile of Reinhold Schmieding and Arthrex

Mike Vogel | 8/26/2016

In 2003, Schmieding’s “dreadful day” from a decade earlier was balanced by the “best day of my professional life” when he opened a 132,000-sq.-ft. office complex with labs where doctors could train on cadaveric joints.

Tammie Nemecek-Sweet, former head of the Collier Economic Development Council, remembers visiting it with community leaders. Arthrex treated the group to a vivid video of a surgery. “Everybody’s like … OK,” she recalled, cringing. “He’s in the back of the room as proud as can be.” (Today, the internet is replete with Arthrex how-to videos.)

Relations soured in 2010. The Collier EDC began collaborating with elected leaders in the county to recruit Maine non-profit Jackson Laboratory to Ave Maria, the town Barron Collier Co. is developing in the eastern part of the county. Economic developers favored giving Jackson $260 million in state and local incentives to move and become the anchor of a biomed cluster that they believed would transform the county’s economy.

The usually private Schmieding leapt to a public attack. (He was joined by Georgia Hiller, with whom he would tangle a year later over his own incentive package.) Arthrex filed four court actions to block the use of public money for Jackson. In a Naples News commentary, Schmieding questioned the project’s return on the government’s investment and also raised a question about the state’s efforts to boost biomed with subsidies. The total investment in state and local money to that point in recruiting life science research firms statewide was nearly $1 billion, or about $1.4 million per job created, he said.

Jackson wound up in Connecticut. Nemecek-Sweet left to take a position with GrowFL. Within a year, the EDC that championed the deal was out of business.

Arthrex has been a party to other disputes. It’s in court regularly, suing competitors and being sued. Last year, it paid a $99-million judgment to competitor Smith & Nephew after losing a patent infringement case it appealed all the way to the U.S. Supreme Court.

An intellectual property attorney not involved in the case, Ury Fischer, of Lott & Fischer, an IP law firm in Coral Gables, says court fights over infringement are routine in the medical device industry, a crowded field where innovation is incremental. “If you don’t have a lot of litigation in the medical device industry, you’re not doing it right,” he says.

Another cost of doing business: Paying doctors. Arthrex, at $58.9 million, ranks No. 10 on ProPublica’s national list of the companies making payments to doctors, based on federally collected data. Much of the sum represents royalty payments to doctors, as opposed to paying for meals or making other payments.

Coincident with Arthrex’s growing heft in the public square has been its commitment to philanthropy. Schmieding prefers to keep a low profile, only occasionally appearing at galas and fundraisers. But the company routinely sends Arthrex representatives to charitable functions, and local philanthropies all say it’s apparent Schmieding has directed the company to support the community.

Arthrex is a major backer of Habitat for Humanity, the American Heart Association, Salvation Army and a long list of other groups. Causes it has supported include Bikers for Babies, Stockings for Soldiers, the fight against breast cancer, a school playground, schools in Laos, wells in Guinea and more than 100 local charities. “You see their name everywhere,” says Jennifer Pash, director of philanthropy for Habitat for Humanity of Collier County. “An incredible partner.”

The former collegiate golfer’s company co-sponsored the foundation of the southwest Florida chapter of the First Tee youth development organization for kids to learn life lessons through golf. The company provided iPads to high school STEM classrooms in Collier. All the support put Arthrex on Fortune’s 50 Best Workplaces for Giving Back in the Country. Spokeswoman Lisa Gardiner declined to detail the company’s giving total but told a reporter in 2014 it averaged more than $1 million a year.

Tags: Research & Development, Research Florida

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