Is 2014 the Kumbaya Moment For Life Science Companies?

Silo is becoming a dirty world in the world of healthcare and medtech as various players realize that keeping patients healthy across the continuum of care requires a greater degree of collaboration than ever before.In other words, collaboration between groups that barely had much of a direct relationship in the past or if they did, it was quite antagonistic.

May 19, 2014

3 Min Read
Is 2014 the Kumbaya Moment For Life Science Companies?


No where is this more apparent than in the results of a survey that PricewaterhouseCoopers released earlier this year. PwC’s 17th Annual Global CEO survey shows that 53% of pharma and life sciences CEOs are planning to enter into a strategic alliance or joint venture in the next 12 months. That is higher than the the proportion of CEOs across all sectors who answered similarly - 44%.


When asked to state which region the M&A, strategic alliance or joint venture would occur, 37% of life science CEOs pointed to the United States, 30% said Western Europe and 27% said East Asia.


Collaborations and strategic alliances between entities have picked up steam in the United States just in the past year. Boston Scientific recently announced that it has become the first founding medical device partner of Optum Labs, which is UnitedHealth’s healthcare research and innovation group founded by the likes of Mayo Clinic and the insurer’s data and services division Optum. Boston Scientific wants to work Optum Labs to develop a body of research around how to manage heart failure patients and what therapies actually work.

Earlier in March, Aetna CEO announced a strategic partnership with Medtronic centered on managing diabetes and heart failure.

SharedClarity, another UnitedHealth company, is leveraging the expertise of its member physicians to determine which devices - stents, pacemakers to name a few - work and then negotiate large but affordable purchasing contracts on behalf of those hospitals and health systems from device makers. Payers are embracing health systems and hospitals in a way that could not have been conceived of given the lack of trust that has defined this relationship.

Unique and unprecedented collaborations through alliances and joint ventures are not the only way the life sciences industry is looking to adapt to the rapidly changing healthcare marketplace.

It’s happening through mergers and acquisitions too. Last year, Medtronic bought Cardiocom, a remote monitoring and software company to manage heart failure patients at home, in a move that is showing that medtech companies are willing to take ownership of certain disease states outside the walls of a hospital.

And earlier in May it was revealed that Covidien had quietly acquired Zephyr Technologies, a company that makes wearable devices, for its remote monitoring capability. The company has a definite consumer business, which normally would make such an acquisition outside the realm of possibility for a traditional medtech player like Covidien (or St. Jude Medical or Boston Scientific) even a few years ago.

Reagan famously issued the challenge, “Mr. Gorbachev, tear down this wall” to dismantle the Berlin Wall, a relic of the Communist past. 

No such single figure exists in healthcare, but an existential threat is leading doctors to the arms of payors and payors and device vendors to embrace. Perhaps the Kumbaya moment in the healthcare world has arrived.

 [Image Credit: user urbancow]

-- By Arundhati Parmar, Senior Editor, MD+DI
[email protected]

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