The biggest and loudest healthcare investor conference is being held amid fears the bubble is bursting
SAN FRANCISCO — The healthcare business class returned to its san francisco sanctuary last week for JPMorgan Annual Healthcare Conference, at the Westin St. The Gilded Francis in Union Square. After a two-year hiatus from the pandemic, the mood among the executives, bankers and start-up founders attending the Halo reunion—talking about promotions, work-from-home routines, and who gets the investments. Dressed in their best capitalist clothes – from bright blue or light purple jackets to elegant tailcoats – they thronged at large parties, at art galleries or restaurants.
But the party was marred by a new concern: Will the huge amount of money invested in health care because of Covid-19 continue to flow in? Will investors demand to see results – in the sense of profits – rather than just great ideas?
The noisy conference had as many words about profits as about patients. The mostly unconvincing crowd speaks English, French and Japanese – and, of course, money.
Besides corporate and investment types, attendees routinely saw surprising figures — like famous doctor Mehmet Oz, who was fresh in the Senate, holding court in the lobby on January 10.
If the atmosphere in the hotel’s packed halls was one of optimism – or at least cheery – there was a tinge of anxiety as everyone was aware that the healthcare business boom seemed to be slowing.
The conference began with a curbside protest of the drug company Gilead Sciences, whose HIV and hepatitis C drugs are staggeringly effective — and staggeringly expensive. During the pandemic, Congress for the first time created a plan to allow Medicare to negotiate US drug prices, which are by far the highest in the world. In a statement, a company spokesperson Catherine Canton Gilead is the largest private funder of HIV programs in the United States, said Gilead, adding, “Gilead’s role in ending the HIV and hepatitis epidemic is to discover, develop, and ensure access to life-saving medicines.”
Then there is the economic environment, which is turning treacherous. Journalists of the financial publication Bloomberg A lack of exciting deals has been diagnosed. Start-up executives—who previously found multimillion-dollar investments accessible—seemed obligated to show results in impromptu performances in bars and cafés. Managers of companies of all classes were promised that they were either making profits now or were about to make them soon.
“I think this is a tough year,” he said. Hemant Taneja, CEO of venture capital firm General Catalyst, during one sitting. He noted that large segments of health tech startups are overvalued and that their customers will be more interested in whether they are actually providing useful services.
The new message from potential investors was clear. d said John CohenCEO of mental health startup Talkspace, in an interview.
There was some cognitive dissonance at the conference. Take BioNTech, the vaccine developer whose mRNA vaccine, created with Pfizer, provides powerful protection against the virus. The founding partner of the company Ogur Shahin He was met with applause during a presentation recounting his role in fighting the pandemic – and that was before touting his company’s role in reducing infectious diseases, saving lives, and meeting global health needs for tuberculosis and malaria.
The conversation later turned to pricing for his company’s flagship vaccine — which is vying to set more than $100 a dose, Up from the average government purchase price of $20.69. It was a reasonable price considering Health Economics, Chief Strategy Officer at BioNTech, said: Ryan RichardsonHe explained: hospitalization and avoiding serious consequences.
Or take pharmacy giant CVS—which is steadily expanding beyond its retail roots into health insurance and primary care. CEO of CVS Health Karen Lynch He said that as part of its wellness business, the company considers all of the factors that underlie good health. “Health isn’t just about interactions with the provider; it’s about all the other factors—including housing and nutrition. Left unaddressed is the scene that often greets CVS customers when they enter a store: candy, chips, and other processed foods.
For critics, it was a mind-boggling comment. “Last I heard, CVS was a for-profit company, not a welfare agency,” he said. Nestle Marion, a longtime researcher and critic of the food industry. They sell fast foods that make people sick and medicines to treat those diseases. How’s that for a nifty business model! “
CVS spokesperson Ethan Slavin Introducing a completely different vision, CVS strives to be a premier health and wellness destination. “We are constantly evolving our range of food and beverages to provide healthy and up-to-date products.” He added that he also supports programs to enhance food availability in underprivileged areas.
Some technologists have faced new doubts about “artificial intelligence”. Co-founder of Ginkgo Bioworks Jason Kelly He noted during his presentation that the people at the conference had heard so much about AI during the meetings, “they want to stop hearing about it.” (Ginkgo’s artificial intelligence, used to support pharmaceutical and biotechnology research, he said, was different from the rest.)
One surgeon is Dr. Rajesh AggarwalHe found that conversations with financiers about the cryptic startup he founded focused on metabolic health were silver bullets. “Tell me if you invest in this, I will do tenfold,” he said, “spending,” paraphrasing the bankers. He said many of them want to “do some good, too” for patients.
Aggarwal felt that investors were looking for simple solutions to health problems. And one item fits that bill: a new class of drugs — GLP-1 agonists, which are a type of drug that aids in weight loss but is likely to be taken for long periods. Some analysts expect the value of these drugs to reach $50 billion. Aggarwal felt that bankers weren’t “thinking about health care”, but rather “thinking about pill-tied dollars”.
KHN Kaiser Health News is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and reconnaissance, KHN is one of the three major drivers in the KFF (Caesar Family Foundation). KFF is a non-profit organization that provides information on health issues to the nation.
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