Lucien de Busscher: Why value in healthcare will be the ultimate decider

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In the run-up to this year’s MedTech Forum, MedTech Engine talked to EY advisory partner Lucien de Busscher about the importance of finding value in healthcare innovation and the blurring lines between medtech, pharma and biotech.

MTE: What are you most looking forward to exploring with your panel at the forefront of digital health innovation?

LdB: There’s a big convergence between pharma players, medtech players and digital communities like Google. You see an awful lot of initiatives around IoT and genomics, different kinds of medical devices or lifestyle devices – all bits and pieces of a very big puzzle. I’m very interested to see how the whole puzzle will be put together, what the key parts in the ecosystem are and what will be the driving forces bringing all these together to create value. In the end it all comes down to outcomes – better solutions for patients.

Lucien de Busscher

Lucien de Busscher

At the other end of the spectrum, in 2020 the healthcare expenditure of the US will be 20.5 per cent of GDP. So we need to be efficient and think about how we’re going to marry that into the huge 4th industrial revolution. Everybody is talking about digital and disruption but how are we actually going to be healthier? And is it going to be affordable? Those are the two questions that matter. I’m really interested to know how these speakers see it all coming together.

How can we simplify the chaos of the traditional healthcare ecosystem?

I believe the industry will simplify itself. It’s all about finding order in chaos. The people who are building apps without a business model today won’t survive even if they have a good idea. Brokers of information that won’t add any value will disappear. It’s really interesting to see where the consolidation will start and who will be the brokers of information that will be trusted.

So, in your view, the innovation that truly brings value will drive change.

If you’re looking at AI and personalised medicine, the successful solutions are the ones that bring more value than current solutions. Governments will never pay more for solutions that are not improved significantly. And initiatives that aim to bring the cost down need to prove that they can do so by making efficiencies in the value chain of hospitals. Value for me is the key thing that will drive consolidation and determine who the winners will be. And those will not necessarily be the players of today.

How can we improve collaboration between startups and global life science companies?

What all large pharma and medtech companies need to do is create an open structure and set up ventures with those small or startup companies that come up with a bright idea but might fail without any help. For startups it’s all about what they want to bring to the table. In a lot of cases they have a bit of an idea but they’re just not sharp enough to bring that idea to the table of larger companies and crystallise the way forward.

What does the trend towards strategic consolidation mean for the medtech industry?

LdB: There’s a whole chapter in EY’s latest Pulse of the Industry on the M&A trend going on in the industry. There is still a lot of value to be gained from the medical device industry. They are still a bit behind the curve when it comes to mergers and acquisitions when you compare them with pharma, but there are a lot of smaller players still out there, so consolidation will happen. We work a lot with the very large companies – the J&Js and the Medtronics of this world – and they have big plans. I’m absolutely sure there will be a lot of acquisition and consolidation over the next three to five years.

What are the benefits of consolidation to companies involved, and for the industry as a whole?

Screen Shot 2016-05-12 at 12.50.23These big companies are buying technologies they don’t have – for example, some of these might be specialised in trauma surgery but want to move into the field of pacemakers. They are acquiring new technologies because the development pipeline is just too complicated and the small companies want to cash in quickly. J&J, for instance, always want to be number one in their portfolio in any given market so they have to acquire to become stronger. Everybody is talking about the pharma industry, but over the next five years I think the weight of the medical device industry will increase more and more in the life sciences spectrum. Also, on an industry level you will see a merger between pharma, biotech and medtech companies. The split between what is pharma and what is medtech will become more blurred. And digital is adding a new dimension to this. All of a sudden you see Google coming up with a new type of company that only considers medical devices as hardware, while they will be the central pivots in all the data collection.

What would you like to see the future of health look like?

LdB: Everybody thinks of life sciences as a very dynamic, advanced, professional sector – and in a way it’s really not. I still think we’re in year one of a thousand-year journey and there are so many different things that are about to happen that our grandchildren will look back and say this was really an old industry. I think we haven’t seen anything yet. Roche recently acquired a spin-off company named Genentech whose CEO has now invested in a research centre where they’re trying to manipulate our DNA so that we don’t become sick anymore. It’s very sci-fi but, then again, in the span of a hundred years, so many things are going to change. There’s also a lot of work to do on data privacy and regulatory, but that will fix itself in the end as long as there is value somewhere.

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