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Life Sciences Insights: The Great Disruptor Enters Healthcare

Dawn Faint

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January 31, 2018

  • Two groundbreaking initiatives announced this month could be very disruptive to the U.S. Healthcare market
  • The ability to cut costs for consumers will determine the success of these efforts
  • Healthcare companies need to review and adapt their strategies for this evolving future market scenario

This week it was announced that Amazon, Berkshire Hathaway, and JP Morgan are joining forces in a partnership to create a healthcare company free from “profit-making incentives.” The move, designed to cut healthcare costs and improve services for their employees, is an indicator that real change in our healthcare system will come from the private sector.

It has long been speculated that Amazon would disrupt the healthcare space.  This may not have been the initiative the market was expecting, but it will serve as a “test and learn” effort with a combined 1.1 million employees and their families to discover which digital solutions will be successful on a broader scale.  I believe it will also enable the application and integration of technology across the healthcare continuum, highlighting opportunities for improvements in care.

Recommended On-Demand Webinar – Expect the Unexpected: Preparing for Market  Disruption

In another industry shake-up announced this month, Ascension, SSM Health, Trinity Health, in consultation with the U.S. Department of Veterans Affairs, and Intermountain Healthcare unveiled a joint effort to establish a not-for-profit generic drug company aimed at ending drug shortages and reducing prices.

Lowering the cost of prescription medications was one of President Donald Trump’s first promises when he came into office, and one he highlighted again during his State of the Union address as a priority for 2018.  The situation has worsened with drugs priced at $100,000 or more entering the market with greater frequency. It seems that healthcare companies are now taking the initiative to solve these challenges on their own terms before the government takes action.

The success of one, or both, of these efforts has the power to drastically reshape the U.S. healthcare system as we know it. Healthcare companies should prepare for a future market that favors low-cost, technology-enabled solutions to modern day challenges.

For now at least, these initiatives share a common goal that goes beyond a focus on profit margins. A key lesson for all of us - when profit isn’t a focus, there can be more innovation.


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Dawn Faint
Dawn Faint

Dawn helps companies in the Life Sciences space map their competitive environment, develop intelligence strategies which identify risks, and position them for future growth. Prior to joining Cipher, Dawn worked for many years in the Healthcare space in leadership roles at Cigna, Schering-Plough, Pharmacia (now Pfizer) and Johnson & Johnson companies Ortho Biotech and Ortho-McNeil, and in the Management Consulting space for Right Management.

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