Summary Presentation based on healthcare white paper by grail research
SUMMARY OF WHITE PAPER BY GRAILRESEARCHAPRAJAY MINOCHAMBA Marketing from JIIT
The “rule book” for success in healthcare had been relativelystable for several decades – new product innovation coupledwith aggressive marketing However, the market is changing, pharmaceutical sales growth isdown, fewer NMEs are being approved and media spending hasseen significant cuts Recent deals between traditional healthcare players like Bayer,Merck, Dr. Reddy’s etc and new entrants like Costco, Nintendo,Fujifilm etc herald a fundamental shift in healthcare industry
Today, major healthcare players face “common threats” likepatent expiration, generic threats, increasing role of payors indecision making and relatively uninspiring pipelines New trends, including the rising prominence of consumerism,information technology and the rising threat of Biosimilars are alsobeing experienced. In combination, these factors are challenging the healthcareplayers to look outside the industry for ways to further innovateand remain competitive.
NEW TRENDSCONSUMERISM• 70 % of consumers seekhealth information onthe internet• Many health-basedwebsite seeing double-digit growth in uniquevisitorsHEALTHCARE IT• Heavy investment inHealthcare IT bygovernments of variouscountries.• Healthcare IT marketexpected to exceed $162 billion with a CAGRof 10.2 %BIOSIMILARSTHREAT• Increasing threat ofbiosimilars due toexpiring patents• The global financialcrisis is increasing thepressure forhealthcare systems tocut costs
Pfizer acquiredWyeth for $ 68billion in 2009Novartisacquired Alconfor $ 51.6 billionin 2011Roche acquiredGenentech for $46.8 billion in2009
•Nintendo and BayerPartnership•June 2009•Developed Bayer’sDIDGET blood glucosemonitoring system,which plugs intoNintendo DS. Targetedat diabetic kids.•Fujifilm’s acquisition ofSonosite•March 2012•Sonsosite is a leaderin bedside ultrasound,UHF micro-ultrasoundtechnology &impedancecardiographyequipment.•Samsung’s $ 300million JV with BiogenIdec for biosimilarsdevelopment.•Dec 2011•85% JV owned bySamsung•Biogen will provide itsexpertise in proteinengineering andbiologicalmanufacturing.
IMMEDIATE FACTORSBiosimilars BoomBy 2015, sales ofbiosimilars expected toreach USD 1.9-2.6 billion,from $ 378 million in firsthalf of 2011Technology andConsumerismConsumer-friendlytechnologiesCustomer base anddistribution channels
New Players Seek Growth• New players seek to tap the hugepotential of healthcare industry, a $5.4 trillion market (7.7% of GDP).• New players can leverage theirtechnology and expertise which isrequired to remain competitive intoday’s healthcare market.• Example: Fujifilm’s JV with DrReddy’s will help to establish a strongpresence in the Japanesepharmaceutical marketHealthcare Players SeekLeverage• Existing healthcare players want toleverage others’ technology,manufacturing skills etc as they facecost constraints in the currenteconomic market.• Example: Allscripts andEtransmedia’s partnership withCostco, provides them access toCostco’s customer base as adistribution channel.
Entry of new players in the healthcare industry, is a sign ofchanging healthcare landscape. In this changing landscape, the advantages of incumbency areoffset by new challenges, and the non-healthcare focusedcompanies now see a chance to enter an industry, whichtraditionally has been a closed one. The pace and magnitude of change in the healthcare industryhas accelerated in the recent years. Companies are struggling tomeet the demands for innovation and change. These demands come at a time when intense financial pressuresare bogging down healthcare companies.
Many of these demands, in order to be fulfilled, requirecompanies to participate in a market of products and servicesthat is outside of their historical zone. The current trend of new players entering healthcare industry willcontinue, leading to a wide range of cross-industrycollaborations and deals.