A New Healthcare Quantum Leap
Ten years from now, 2020 will be remembered as the year of Covid-19. But the unique circumstances we all faced with the pandemic have also been a fertile ground for a quantum leap in innovations in the fields of technologies and healthcare.
In our daily lives, information about viruses and hygiene is now common in any newspaper or TV news. But while we have experienced everyday how technologies could change our lives, having been in lockdown working, talking to our friends, ordering groceries or playing online, several significant and possibly more impactful changes have remained under the radar from most people.
Indeed, one of the possible game changers for the coming decade remains relatively far from our eyes. Indeed the unique scale of the health crisis and the knock-on effect on the economy have unlocked unprecedented amounts of investments not only in research and development but also in healthcare infrastructure. While investments in healthcare were growing to scale with population increase and aging, the situation related to Covid-19 has driven a further quantum leap. As early as May 2020, the New York Times revealed that research on a Covid-19 vaccine had already obtained USD 8 billion in pledges worldwide, including from some of the largest philanthropists globally like The Gates foundation.
Since then, the largest countries in the world have all pre-acquired hundreds of millions of doses of possible vaccines from the likes of AstraZeneca, Moderna and Sanofi.
Spending of this magnitude has dwarfed previous investment in the healthcare domain. In the US alone, “Operation Warp Speed”, aiming at delivering 300 million doses of vaccine for Covid-19 by January 2021 has been at the center of large grants and contracts totaling several billion dollars. The objective is to accelerate the research for the vaccine and the development of infrastructure to produce and distribute it.
Such unprecedented financial commitments bringing together public and private investors bring memories of high stakes projects in the past like the Apollo program. Such high intensity, high stakes programmes unlock financial resources to bring together the best scientists and innovators to achieve a certain goal. But the unheard story is that research is rarely a linear endeavor. Research is founded on experiment and failure. And these experiments and failures often can lead to discoveries that have no direct impact on the original goal but that can be used in other areas.
Without the need for ever-improved data processing capabilities during World War II, the development of computers may have been much slower; without the Apollo programme, the state of R&D in aeronautics would probably not be where it is today.
It is too early to say whether ongoing investment programmes will yield similar ancillary benefits; the conditions for a tipping point seem to be present.
Current investments come on top of another ongoing revolution in healthcare: leveraging data and computing power. Increasingly, the insights gathered from data can help researchers and doctors to identify pathologies and understand how medicines work. In addition, the power of edge computing and the sheer scale of the Internet are leveraged for medical research where huge amounts of data need to be processed and tested.
A report from Becker Hospital Review in January 2020 highlighted that Google, Microsoft and Tencent were responsible for more than 70% of the deals made for digital health startups, signaling the increasing relationship between technology and healthcare. At the same time, large healthcare companies continue to invest in innovative, game changing technology. The acquisition of Grail by Illumina or the merger between Teladoc and Livongo are indicative of this trend and come after a string of large M&A deals in 2019, including the acquisition of Celgene by Bristol-Myers Squibb or the acquisition of Allergan by Abbvie.
All these elements put together depict a world where innovation in healthcare is both required for society and supported by unprecedented investment. The ongoing (r)evolution of the healthcare and pharmacy industries is likely to continue and benefit from the large investments made by private and public investors alike. These trends are some of the underlying reasons why BNP Paribas Wealth Management has highlighted innovation of healthcare one of its five key themes for 2020 alongside disruptive technologies.