My Comments on the Health Care Industry’s CEO’s Innovation Visions

2/16/2018: Alex Gorsky, the CEO of Johnson & Johnson recently made the following statements concerning where healthcare innovation is headed.

 Here is what I think about each of his factors listed in bolding.

There must be a sense of urgency.  This is rarely seen in health care because they are slow to change their culture or way of doing business.  Why is there no change?  The have been successful in doing what they always have done.

This requires us to actually re-imagine Johnson & Johnson as a 132-year-old startup.  The cultural background and personalities of those who came up through this system does not allow them to imagine what it takes to be a start up; personal risk, handling failure, more time than anticipated, and the idea of trying again.                          

One that embraces and acts on the best ideas.  This is unlikely to happen since “corporate’s” idea of the best ideas are ones that produce profit in the next quarter, not five years from now when they will be retired or at another company.

One that is nimble and fast.  This is unlikely as the junior officers are not going to risk loosing their job by proposing an idea or plan that requires a fast and nimble approach to new products. They know that no one got to the top of “corporate” doing it this way.

One that leverages technology to drive life-changing and life-saving innovation.  The risk adverse culture will never leverage as this word contains risk.  Let me give you an example.  There is a US patented way to coat total joint implants at the time of surgery to prevent attachment of biofilm bacterial colonies.  The major orthopedic industry will not take this on because of the estimate of 10 years and 50-150 million dollars to get through the FDA.  They cannot even entertain a known less expensive way in time and money to get there.

One that focuses on being competitive always.  Being competitive means you are the fittest and fastest with the most mental toughness.  High profits inherent in the major medical companies never have required these characteristics and will not, because it has not been necessary to date for success.

One that embraces transformative products.  The corporate mentality of the “Big Pharma” has ignored the nutraceutical industry which incidentally is growing very fast.,

One that has quality services.  This factor does exist with present managements, marketing, sales and distribution.

One that has transparent pricing.  This is not likely as the R&D and cost of doing business is so high, it requires new blockbuster drugs for cancer to sell for up to $100,000 per patient treatment; yes $100,000.   This is not you new aspirin.

One that has all the factors with the consumer top-of-mind.  If this was so it would not have been almost 30 years since introduction of a new antibiotic.  Why is this?  The cost to develop plus regulations would not allow the same profit margin as cancer or arthritis.

Summary Insights: For safety, medical companies usually do acquisitions, not innovations.  After all they are in the business of making money.