Health Care CEOs Share Their Outlook for 2024

Last week I had the honor of co-moderating, along with my colleague, BCG Chair Rich Lesser, our annual virtual “CEOs on the Future of Health Care” session during the J.P. Morgan Healthcare Conference week. Our guests, Dave Ricks, chair and CEO of Eli Lilly and Company, and Tom Polen, chairman, CEO, and president of Becton Dickinson, shared their thoughts on the conference and their outlook for the year ahead. It was an engaging and inspiring discussion.

Dave and Tom both remarked on the positive sentiment of this year’s conference, as seen in increasing clinical success, stronger supply chains, declining inflation, and a higher volume of procedures. Life sciences and medtech companies alike are using their strong cash position to optimize their portfolios. They are doubling down on their core markets and the new markets where they are best positioned to win. Innovations in new modalities, such as ADCs, radio-ligand therapies, gene-editing and gene therapy, are being substantiated with real data. AI and robotics continue to dominate. The automation of pharmacies, laboratories, and nursing practices is growing as providers use the new technologies to address workforce challenges.

Generating Innovation Opportunities Through GenAI

GenAI is creating tremendous opportunities across health care. Thanks to its ability to translate and convert technical information into words humans can read, it is improving process efficiency in regulatory compliance submissions and surveillance, freeing up clinical staff to work on innovation. GenAI is also greatly enhancing drug discovery – and, as Tom put it, every drug company has to be all over it.

AI has such transformational potential that companies that don’t embrace it will fall behind. That said, managing it properly will be critical.

Harnessing the Potential of GLP-1s

GLP-1s were the talk of J.P. Morgan Healthcare conference. In addition to managing diabetes and obesity, they have the potential to address a wide range of cardiometabolic conditions.

What’s more, patients really want these drugs. Dave said that this is the first time he’s seen this level of patient interest. Given the results on diabetes, obesity and cardiovascular disease, GLP-1s could have real impact on long term health outcomes.

BD and other medtechs also play an important role in the GLP-1 ecosystem because they produce the prefilled syringes that people use to inject the drug – and develop innovative injection systems. As Tom pointed out, while autoinjectors have been used in several diseases, they have never been used at this scale and this will enable the broader acceptance of self-administered biologics thus empowering a whole new wave of biological drugs across other diseases.

Mergers and Acquisitions on the Rise

M&A activity is definitely picking up, particularly in the medtech sector, where after a period of spinoffs, balance sheets are strong and companies have a lot of cash.

Tom spoke of how large cap medtech companies are getting back into core markets or new higher-growth adjacent spaces. BD has done about 19 acquisitions over the last three or four years. With the last one, which was in the pharmaceutical automation space, BD became the world's leader in pharmacy robotics and automation, with an approximately $700 million business.

The heightened M&A activity in medtech is largely being spurred by unprecedented innovation. Some of the innovation has to do with surgical robotics, but BD is also looking at broad process efficiency. Robots, not pharmacists, are counting pills now.

Driving Innovation Through Diversity

David noted that innovation happens through remixing different ideas, which is much better to do with people of different backgrounds and disciplines. Diversity is key to quality: assuming that talent and intellect are equally distributed within gender, race, and so on, companies are sub-optimizing the quality of their talent if their teams look different from the general population. So, we need to look like the market as an indicator that we're accessing the best people everywhere.

Tom agreed, noting that BD’s focus on diversity and inclusion have driven better innovations and outcomes. Diversity and inclusion have in fact helped drive the company’s higher growth over the last few years.

All signs point to a promising 2024. Biopharma and medtech companies have a unique opportunity to develop the innovations that can address the greatest health care challenges and improve people’s lives. They would be remiss not to seize it.

Watch the CEO panel summary video here.