The medical-devices industry, like its health-care peers, may be called on to contribute to the government's health reform efforts by making financial sacrifices.

An agreement between the government and devices industry, which includes heavyweights such as Medtronic Inc. (MDT) and Johnson & Johnson (JNJ), was considered questionable because there isn't a strong connection between the two. But deal speculation is building among industry observers, with one analyst saying a pact could carry a price tag between $15 billion and $25 billion over 10 years.

While that would be less than bigger agreements sealed with the hospital and pharmaceutical industries, Wells Fargo analyst Larry Biegelsen estimated any deal above $15 billion would hurt by more than offsetting the financial benefits of insuring more patients.

And, in the end, investors may not like a pact of any size.

"We believe any deal the industry agrees to will be viewed as a net negative for investors, as few expected health-care reform to have a direct impact on medical devices," Biegelsen wrote in a note to investors. He said the White House and devices industry are in talks over a deal that could come in September.

Officials in the White House press office didn't immediately respond to a request for comment on the matter. The Advanced Medical Technology Association, or AdvaMed, which represents device makers in Washington, did not say whether a deal is in the works.

An AdvaMed spokesman Thursday pointed to a statement last week by Steve Ubl, the group's president and chief executive. Ubl said AdvaMed remains committed to the goal of broad-based reform that gives all Americans access to health care.

"To that end we are maintaining an open line of communication and working constructively with the White House and leaders on Capitol Hill," Ubl said.

The fact the government doesn't really pay directly for devices - which are generally sold to hospitals - raises questions over what sort of mechanism would be used to garner device-industry savings. Bernstein Research analysts said the opening gambit may be a request for $50 billion to $60 billion in savings over 10 years, perhaps through a rebate mechanism.

Biegelsen said his sources say a smaller deal is much more likely, and that AdvaMed is "adamantly opposed to any form of rebates for medical devices." He suggested savings could be routed through group purchasing organizations, which are aggregated buying groups for hospitals.

The device industry has been highlighting the fact it's already likely to get squeezed in the quest for cost savings. That is because when the government tightens spending to hospitals, hospitals are likely to clamp down on their own costs.

The hospital industry has agreed to a $155 billion cost-savings deal over 10 years.

According to Dominic Caruso, J&J's chief financial officer, "it would be safe to assume that some contribution from the medical device industry would be required in order to make those numbers from the hospital industry come to life." He addressed the matter on J&J's second-quarter earnings call last week.

Several other device-industry executives, including officials at Boston Scientific Corp. (BSX) and St. Jude Medical Inc. (STJ), also touched on the potential impact of reform during recent calls.

Michael Mussallem, chief executive of heart-valve maker Edwards Lifesciences Corp. (EW) and current AdvaMed chairman, said Monday that "when hospitals have to save the kind of money that is being projected, it's the kind of thing that's somewhat worrisome for our industry."

In addition to hospitals, the pharmaceutical industry agreed to contribute $80 billion over 10 years as part of a proposed health-care overhaul.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com