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Kara Murphy: Healthcare Disruption and Opportunities for Private Equity and Corporate Buyers

Bain Partner Kara Murphy discusses the five disruptive trends that are reshaping the healthcare landscape.


Kara Murphy: Healthcare Disruption and Opportunities for Private Equity and Corporate Buyers

Five disruptive trends are currently reshaping the healthcare landscape. Kara Murphy, a partner with Bain's Healthcare and Private Equity practices, discusses how private equity and corporate investors can evaluate business opportunities and risks that these trends create.

Read the Bain Report:  Global Healthcare Private Equity and Corporate M&A Report 2018

Read the transcript below.

KARA MURPHY: At Bain, we see five disruptive trends that are really going to shape the health care landscape, and it's going to be very important for both corporate investors and private equity investors to be aware of them and think through what opportunities and what risks they may create for businesses they own or businesses they may want to own.

First is the "Amazon effect." Amazon and many other big players are looking at the $400 billion healthcare profit pool and figuring out how they can action that. When you think about the patient capital, when you think about the track record of success players like Amazon have had in other spaces, you definitely count on them to win in some way in the healthcare space. I think the question is, in what subsectors, in what time frame, and to what effect? But the bottom line is count on them to stay and be playing in the healthcare space.

The second is the digital revolution. Digital is pervasive across industries. As you look at healthcare, it's arguably behind other industries with respect to the digital revolution, and there's a tremendous amount of opportunity across subsectors and across the value chain.

So when you think about using Big Data and artificial intelligence to develop better drugs, or whether you think about using digital to outreach to consumers who are becoming more active in their healthcare, a huge amount of opportunity in digital.

The third trend is indeed consumerism. Consumers have more say, are more involved, and have more dollars at stake now in the healthcare decision making. And so you're seeing the rise of more consumer-driven concepts, leveraging the best practices from consumer, retail, technology fields.

Fourth is personalized medicine. Again, a lot of R&D dollars are going into the healthcare space. You're seeing more and more products and medicines getting developed that are targeted to an individual consumer and having [a] better effect on the treatment and better quality of care. Huge opportunity, again, to invest in those products, invest in diagnostics, or to invest in derivative services and tools that support that very exciting personalized medicine trend.

The fifth is regulatory. You know, in healthcare, you always have to have your eye on the regulatory. There are tailwinds, there are headwinds, depending on what subsector you're looking at. Arguably, some of that is going to be more muted in the near term, relative to what we've seen historically, but you always have to monitor that.

The bottom line is, this is a very exciting time in the healthcare space, and we think these five disruptive trends are very important for both corporate investors and private equity investors to be aware of.

Read the Bain Report

Rapport annuel sur le private equity et les fusions-acquisitions dans la santé 2018

L’activité de private equity dans le secteur de la santé a bondi en 2017, tant en termes du nombre de transactions que de valeur totale ; les investisseurs ayant profité des tendances perturbant le secteur.

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