WEBVTT
1
00:00:00.000 --> 00:00:03.417
(rhythmic ambient music)
2
00:00:08.760 --> 00:00:09.900
Hello, everyone.
3
00:00:09.900 --> 00:00:12.030
Thank you for joining us here at the conclusion
4
00:00:12.030 --> 00:00:14.490
of the JP Morgan Healthcare Conference.
5
00:00:14.490 --> 00:00:17.178
We're excited to have with us two great CEOs
6
00:00:17.178 --> 00:00:19.050
in the healthcare industry
7
00:00:19.050 --> 00:00:22.650
and more broadly across the business community with us today
8
00:00:22.650 --> 00:00:25.860
to share their reflections from this week's conference
9
00:00:25.860 --> 00:00:28.440
and their perspectives for the year ahead.
10
00:00:28.440 --> 00:00:31.170
So now let's get to introducing our guests.
11
00:00:31.170 --> 00:00:35.220
Tom Polen from BD and Dave Ricks from Eli Lilly.
12
00:00:35.220 --> 00:00:37.560
First, I'm honored to introduce Tom Polen,
13
00:00:37.560 --> 00:00:40.350
the chairman and CEO and president of BD.
14
00:00:40.350 --> 00:00:43.410
The $19 billion global MedTech company.
15
00:00:43.410 --> 00:00:45.300
It's my pleasure to introduce Dave.
16
00:00:45.300 --> 00:00:48.900
Dave is a Eli Lilly veteran of more than 25 years.
17
00:00:48.900 --> 00:00:50.970
Dave became CEO and chair of the
18
00:00:50.970 --> 00:00:54.570
company's board of directors in 2017.
19
00:00:54.570 --> 00:00:55.860
After he joined Lilly
20
00:00:55.860 --> 00:00:59.460
as a business development associate 25 years ago,
21
00:00:59.460 --> 00:01:02.035
he has had various international leadership positions
22
00:01:02.035 --> 00:01:05.798
across the world in Canada, China, and the US.
23
00:01:05.798 --> 00:01:09.300
(upbeat bright music)
24
00:01:09.300 --> 00:01:12.810
The talk of JPM was GLP-1s, right?
25
00:01:12.810 --> 00:01:15.150
And we know in addition to their ability
26
00:01:15.150 --> 00:01:16.710
to manage diabetes, obesity,
27
00:01:16.710 --> 00:01:19.050
they've also been shown to help heart disease
28
00:01:19.050 --> 00:01:21.029
and they're being tested for a wide range
29
00:01:21.029 --> 00:01:23.940
of cardiometabolic conditions.
30
00:01:23.940 --> 00:01:26.228
How should the healthcare system, the providers,
31
00:01:26.228 --> 00:01:29.154
the insurers, patients, physicians,
32
00:01:29.154 --> 00:01:33.270
how should they think about this class of drugs?
33
00:01:33.270 --> 00:01:36.480
What we call is incretin super family GLP-1s,
34
00:01:36.480 --> 00:01:38.850
it's been going on for a while.
35
00:01:38.850 --> 00:01:42.060
But we have moved to this
36
00:01:42.060 --> 00:01:45.300
kind of hyperbolic inflection point,
37
00:01:45.300 --> 00:01:47.670
I think, for three reasons that make this super unique.
38
00:01:47.670 --> 00:01:52.500
One, excess body weight, which we know
39
00:01:52.500 --> 00:01:54.630
because for almost all adult diseases,
40
00:01:54.630 --> 00:01:57.600
the first line of therapy is,
41
00:01:57.600 --> 00:01:59.520
oh yeah, lose some weight.
42
00:01:59.520 --> 00:02:02.400
Whether it be lot of cardiovascular conditions,
43
00:02:02.400 --> 00:02:07.400
even autoimmune conditions, reproductive problems.
44
00:02:07.742 --> 00:02:12.719
What we hadn't known until really the last couple years
45
00:02:12.719 --> 00:02:14.160
was a couple things.
46
00:02:14.160 --> 00:02:17.130
One, we could augment weight successfully
47
00:02:17.130 --> 00:02:19.500
and safely at pretty big scale.
48
00:02:19.500 --> 00:02:20.700
Weight loss is weight loss
49
00:02:20.700 --> 00:02:22.800
and all these conditions can improve
50
00:02:22.800 --> 00:02:25.620
if people get into a healthy body weight.
51
00:02:25.620 --> 00:02:27.750
So the impact across the healthcare system
52
00:02:27.750 --> 00:02:30.660
direct offsets and improve quality of life,
53
00:02:30.660 --> 00:02:35.112
and maybe length of life seem possible now.
54
00:02:35.112 --> 00:02:37.182
So in addition to the effectiveness
55
00:02:37.182 --> 00:02:38.818
and safety of the drugs, in addition
56
00:02:38.818 --> 00:02:43.280
to the translation to real, hard health benefits,
57
00:02:43.280 --> 00:02:47.503
you have this consumer poll we probably haven't seen
58
00:02:47.503 --> 00:02:51.390
in a drug class that has this kind of impact.
59
00:02:51.390 --> 00:02:53.370
So big opportunity ahead.
60
00:02:53.370 --> 00:02:55.800
I think we can safely say we will have,
61
00:02:55.800 --> 00:02:59.100
if we can ramp up and use these rationally,
62
00:02:59.100 --> 00:03:00.270
if we can get reimbursement
63
00:03:00.270 --> 00:03:02.400
so there's not the massive health equity problem
64
00:03:02.400 --> 00:03:05.151
that's presenting itself right now,
65
00:03:05.151 --> 00:03:07.193
we could probably change the life expectancy
66
00:03:07.193 --> 00:03:09.420
of Western nations.
67
00:03:09.420 --> 00:03:11.430
So Tom, maybe I should ask you,
68
00:03:11.430 --> 00:03:13.890
obviously you play in this ecosystem too.
69
00:03:13.890 --> 00:03:16.011
What role do you play in the GLP ecosystem?
70
00:03:16.011 --> 00:03:19.980
How is BD making it simpler and safer for patients
71
00:03:19.980 --> 00:03:22.260
and providers to administer these GLP-1s?
72
00:03:22.260 --> 00:03:26.160
Inside every auto-injector is a prefilled syringe
73
00:03:26.160 --> 00:03:28.530
with a pre-attached needle that contains the drug.
74
00:03:28.530 --> 00:03:30.660
And so, we invented that category.
75
00:03:30.660 --> 00:03:33.000
We're investing 1.2 billion
76
00:03:33.000 --> 00:03:35.940
in capacity expansion right now to support growth
77
00:03:35.940 --> 00:03:40.230
of this category and other new biologics and vaccines.
78
00:03:40.230 --> 00:03:42.030
One of the things that I hear most,
79
00:03:42.030 --> 00:03:44.400
and I think it's going to be a ripple effect
80
00:03:44.400 --> 00:03:47.250
of what's happening now in GLP-1s,
81
00:03:47.250 --> 00:03:49.410
and just a huge transformational effect
82
00:03:49.410 --> 00:03:52.770
that it's going to have in chronic disease overall.
83
00:03:52.770 --> 00:03:54.240
So many folks that I talked to
84
00:03:54.240 --> 00:03:57.017
and they started taking GLP-1s, they'll say,
85
00:03:57.017 --> 00:03:58.800
"I was really surprised.
86
00:03:58.800 --> 00:04:00.930
It didn't bleed, it didn't hurt.
87
00:04:00.930 --> 00:04:04.200
It was much easier process to do these injections
88
00:04:04.200 --> 00:04:05.820
than I thought it was going to be."
89
00:04:05.820 --> 00:04:07.260
Our strong belief is that GLP-1s
90
00:04:07.260 --> 00:04:09.165
are going to bring that experience to a scale
91
00:04:09.165 --> 00:04:11.040
that's never been had before.
92
00:04:11.040 --> 00:04:13.710
And this is going to continue to enable broad acceptance
93
00:04:13.710 --> 00:04:16.902
of other biologics that are also coming down the pipeline.
94
00:04:16.902 --> 00:04:20.100
(bright upbeat music)
95
00:04:20.100 --> 00:04:21.810
Tom, you see M&A right now.
96
00:04:21.810 --> 00:04:24.960
And how do you see it specific to the MedTech industry
97
00:04:24.960 --> 00:04:27.720
versus the mood a year or two ago?
98
00:04:27.720 --> 00:04:30.690
Balance sheets are much stronger now post-COVID.
99
00:04:30.690 --> 00:04:33.270
People have cash, they're very active.
100
00:04:33.270 --> 00:04:35.520
There's been a lot of spinouts in MedTech
101
00:04:35.520 --> 00:04:36.930
over the last several years.
102
00:04:36.930 --> 00:04:39.549
You're seeing greater appetite for the add-ins
103
00:04:39.549 --> 00:04:42.030
in the portfolio that are getting people, again,
104
00:04:42.030 --> 00:04:43.950
back in those core markets that they want to be into
105
00:04:43.950 --> 00:04:46.230
with higher growth-adjacent spaces.
106
00:04:46.230 --> 00:04:47.677
We've done about 19 acquisitions
107
00:04:47.677 --> 00:04:50.763
over the last three or four years,
108
00:04:51.690 --> 00:04:54.531
and our last one was our largest of those,
109
00:04:54.531 --> 00:04:57.360
which was in the pharmaceutical automation space,
110
00:04:57.360 --> 00:04:58.830
and put us as the world's leader
111
00:04:58.830 --> 00:05:01.350
in pharmacy, robotics, and automation now
112
00:05:01.350 --> 00:05:03.300
with about a $700 million business.
113
00:05:03.300 --> 00:05:05.640
Growing nice teams in that category.
114
00:05:05.640 --> 00:05:07.890
Most importantly of all is this is being spurred
115
00:05:07.890 --> 00:05:10.320
by what is unprecedented innovation
116
00:05:10.320 --> 00:05:12.060
that's happening within the MedTech sector.
117
00:05:12.060 --> 00:05:14.733
We're looking at broad healthcare process efficiency.
118
00:05:16.050 --> 00:05:18.660
No pharmacists should be counting pills anymore, right?
119
00:05:18.660 --> 00:05:20.820
That's all being done by robots now.
120
00:05:20.820 --> 00:05:23.040
And there's shortages of pharmacists,
121
00:05:23.040 --> 00:05:25.380
all of that is transforming now.
122
00:05:25.380 --> 00:05:27.150
It's fueling growth in the space.
123
00:05:27.150 --> 00:05:30.270
There's true technology shifts that are happening right now
124
00:05:30.270 --> 00:05:33.270
and enabled by some really exciting science
125
00:05:33.270 --> 00:05:35.160
on the AI side, on the automation side,
126
00:05:35.160 --> 00:05:38.050
on the biomaterials side that
127
00:05:39.360 --> 00:05:40.680
create tremendous opportunities,
128
00:05:40.680 --> 00:05:41.850
make a difference for patients,
129
00:05:41.850 --> 00:05:45.227
and drive new value creation in the industry.
130
00:05:45.227 --> 00:05:48.109
(gentle upbeat music)
131
00:05:48.109 --> 00:05:50.790
Dave, you are active in the industry-wide dialogue
132
00:05:50.790 --> 00:05:53.640
on how the US healthcare sector
133
00:05:53.640 --> 00:05:55.620
needs to evolve more broadly,
134
00:05:55.620 --> 00:05:57.600
both to deliver cost effectiveness
135
00:05:57.600 --> 00:05:59.850
and to deliver good patient outcomes.
136
00:05:59.850 --> 00:06:02.460
How do you see that happening?
137
00:06:02.460 --> 00:06:04.920
And are there transformative changes coming along?
138
00:06:04.920 --> 00:06:08.087
And how do we get to both an affordable system
139
00:06:08.087 --> 00:06:11.040
and one that is delivering health outcomes
140
00:06:11.040 --> 00:06:12.840
for our whole population?
141
00:06:12.840 --> 00:06:17.790
For the last 20 years, I think the policy debate
142
00:06:17.790 --> 00:06:20.760
mostly has been about expanding insurance coverage
143
00:06:20.760 --> 00:06:22.050
in the United States.
144
00:06:22.050 --> 00:06:25.260
I don't think that's the main objective anymore.
145
00:06:25.260 --> 00:06:27.268
I think what we need to do is focus
146
00:06:27.268 --> 00:06:29.820
on three other objectives
147
00:06:29.820 --> 00:06:31.830
in terms of how we're delivering healthcare.
148
00:06:31.830 --> 00:06:34.025
You touched on one point, which is
149
00:06:34.025 --> 00:06:37.170
what I'd say is system-level quality.
150
00:06:37.170 --> 00:06:41.430
Another way to think about that is similar outcomes
151
00:06:41.430 --> 00:06:44.940
independent of where you live and what your insurance is.
152
00:06:44.940 --> 00:06:46.530
And that's a health equity issue.
153
00:06:46.530 --> 00:06:48.360
That's what healthcare should want to do.
154
00:06:48.360 --> 00:06:51.060
And we're a really long way from that objective.
155
00:06:51.060 --> 00:06:54.120
Probably the most glaring examples were during COVID
156
00:06:54.120 --> 00:06:56.010
where you can look at mortality rates
157
00:06:56.010 --> 00:06:59.430
by zip code and by insurance type.
158
00:06:59.430 --> 00:07:02.185
The second big problem, it's affordability
159
00:07:02.185 --> 00:07:06.270
in developed markets of the benefit we already have.
160
00:07:06.270 --> 00:07:10.890
The demography of developed markets is changing really fast.
161
00:07:10.890 --> 00:07:14.903
The ratio of taxpayers to beneficiaries is shifting fast
162
00:07:14.903 --> 00:07:19.830
and no one has this math figured out.
163
00:07:19.830 --> 00:07:22.050
So that's got to change
164
00:07:22.050 --> 00:07:24.640
and that's fundamentally a cost issue
165
00:07:25.710 --> 00:07:28.800
because particularly in the US
166
00:07:28.800 --> 00:07:31.128
if we look at the cost of care,
167
00:07:31.128 --> 00:07:36.128
we know the highest in OECD per patient,
168
00:07:36.390 --> 00:07:38.070
the outcomes aren't really different.
169
00:07:38.070 --> 00:07:40.922
The outcomes at the high end of care are different,
170
00:07:40.922 --> 00:07:43.500
but the outcomes at the low end are much worse.
171
00:07:43.500 --> 00:07:45.840
We can work on affordability during the patent life,
172
00:07:45.840 --> 00:07:47.899
but it's probably the one thing
173
00:07:47.899 --> 00:07:49.530
that actually does get cheaper.
174
00:07:49.530 --> 00:07:51.120
Everything else is inflating.
175
00:07:51.120 --> 00:07:53.880
XUS, I would say it's more of a ratio problem.
176
00:07:53.880 --> 00:07:55.500
We have a ratio problem in the US too,
177
00:07:55.500 --> 00:07:57.060
but it's much less pronounced,
178
00:07:57.060 --> 00:07:59.400
which is the vast majority of healthcare costs
179
00:07:59.400 --> 00:08:01.440
are labor and CapEx.
180
00:08:01.440 --> 00:08:06.180
And labor and CapEx inflate and they inflate without an end.
181
00:08:06.180 --> 00:08:09.930
And right now, inflation in developed worlds
182
00:08:09.930 --> 00:08:12.813
for labor and CapEx is mid single digits.
183
00:08:13.680 --> 00:08:15.390
That was OK when the rest of the economy
184
00:08:15.390 --> 00:08:17.160
was doing that in the last few years,
185
00:08:17.160 --> 00:08:19.167
but it's not going to be OK in the long term.
186
00:08:19.167 --> 00:08:20.880
It's totally unaffordable.
187
00:08:20.880 --> 00:08:24.180
So we have to reduce labor. That's an AI opportunity.
188
00:08:24.180 --> 00:08:25.770
And we have to reduce CapEx.
189
00:08:25.770 --> 00:08:27.660
That's a drug treatment opportunity.
190
00:08:27.660 --> 00:08:29.601
I think Tom mentioned actually several good examples
191
00:08:29.601 --> 00:08:32.501
of how we can take people out of infusion chairs
192
00:08:32.501 --> 00:08:34.683
and have them sit in their living room.
193
00:08:35.670 --> 00:08:37.530
So that's all got to happen.
194
00:08:37.530 --> 00:08:41.250
I think actually this is one of the defining political
195
00:08:41.250 --> 00:08:43.050
and policy issues, not just in healthcare,
196
00:08:43.050 --> 00:08:46.410
but at the economic level
197
00:08:46.410 --> 00:08:48.840
in the developed world over the next 10 years.
198
00:08:48.840 --> 00:08:52.200
It's a combination of available technology,
199
00:08:52.200 --> 00:08:57.200
business models, and regulatory support for this,
200
00:08:57.630 --> 00:08:58.950
of which none of,
201
00:08:58.950 --> 00:09:02.700
I'd say, we're probably moving ahead on technology
202
00:09:02.700 --> 00:09:06.640
faster than we're moving ahead on really nailing out
203
00:09:07.710 --> 00:09:09.720
how it's going to work in practice.
204
00:09:09.720 --> 00:09:14.070
And the regulators are moving forward to catch up as well.
205
00:09:14.070 --> 00:09:16.710
There's a huge dialogue over the last several years
206
00:09:16.710 --> 00:09:18.150
around hospital at home.
207
00:09:18.150 --> 00:09:20.373
Everyone's talking about, again, how do you reduce
208
00:09:20.373 --> 00:09:23.850
that big CapEx burden that happens in the hospital?
209
00:09:23.850 --> 00:09:25.980
There's a lot of of piloting going on right now,
210
00:09:25.980 --> 00:09:28.950
but we've got to continue to get other elements
211
00:09:28.950 --> 00:09:32.100
of the system aligned to really bring the force
212
00:09:32.100 --> 00:09:34.872
to impact both equity and costs.
213
00:09:34.872 --> 00:09:38.370
(gentle upbeat music)
214
00:09:38.370 --> 00:09:40.590
GenAI has just been such a theme
215
00:09:40.590 --> 00:09:43.110
on so many discussions I've been a part of in the last,
216
00:09:43.110 --> 00:09:44.730
it goes across sectors.
217
00:09:44.730 --> 00:09:46.770
How are you seeing it for your businesses?
218
00:09:46.770 --> 00:09:50.733
AI has such a transformational potential.
219
00:09:51.870 --> 00:09:54.240
You have to be in AI or you will fall behind.
220
00:09:54.240 --> 00:09:55.230
At the same time,
221
00:09:55.230 --> 00:09:57.630
we are focused on both the efficiency of AI
222
00:09:57.630 --> 00:09:58.890
internally within the company,
223
00:09:58.890 --> 00:10:01.140
as well as the benefits that can have to clinicians.
224
00:10:01.140 --> 00:10:04.449
We've got about 15 different pilots going on in the company
225
00:10:04.449 --> 00:10:06.120
focused on efficiency.
226
00:10:06.120 --> 00:10:07.620
We see tremendous opportunities
227
00:10:07.620 --> 00:10:10.094
to automate many basic processes again,
228
00:10:10.094 --> 00:10:12.870
so that we can double down on solving
229
00:10:12.870 --> 00:10:15.270
the big challenges in healthcare and improving outcomes.
230
00:10:15.270 --> 00:10:16.290
On the innovation side,
231
00:10:16.290 --> 00:10:20.310
we've got a couple 510K FDA cleared AI applications.
232
00:10:20.310 --> 00:10:23.760
So we have software that helps pharmacists compound drugs,
233
00:10:23.760 --> 00:10:25.492
manage all the inventory in the pharmacy,
234
00:10:25.492 --> 00:10:28.560
then deploy the drugs up onto the floor in our Pyxis systems
235
00:10:28.560 --> 00:10:31.230
and then our Alaris system infusing them the patients.
236
00:10:31.230 --> 00:10:33.870
I think every one of our businesses has AI
237
00:10:33.870 --> 00:10:38.100
as part of their, of active products in pipeline.
238
00:10:38.100 --> 00:10:41.013
And you're seeing that across the MedTech world.
239
00:10:42.210 --> 00:10:45.210
Translation and conversion of technical information
240
00:10:45.210 --> 00:10:49.860
into words humans can read is something it's good at
241
00:10:49.860 --> 00:10:51.900
and people get bored with.
242
00:10:51.900 --> 00:10:53.850
So it's a big productivity game,
243
00:10:53.850 --> 00:10:57.153
but also allows us to just deploy people on better problems.
244
00:10:59.130 --> 00:11:02.310
Probably the other big generative opportunity
245
00:11:02.310 --> 00:11:04.470
relates to drug discovery.
246
00:11:04.470 --> 00:11:09.360
So here we're talking about machines
247
00:11:09.360 --> 00:11:11.880
looking at the chemical space.
248
00:11:11.880 --> 00:11:14.488
Chemical space is vast and the machines are good
249
00:11:14.488 --> 00:11:17.430
at coming up with interesting new starting points.
250
00:11:17.430 --> 00:11:19.924
For the IP-generating activity,
251
00:11:19.924 --> 00:11:22.860
I mean, every drug company has to be all over this,
252
00:11:22.860 --> 00:11:24.450
but probably the quick win
253
00:11:24.450 --> 00:11:26.700
is more the industry-specific applications
254
00:11:26.700 --> 00:11:29.477
like clinical trial optimization.
255
00:11:29.477 --> 00:11:32.850
(gentle ambient music)
256
00:11:32.850 --> 00:11:35.190
Probably next year we'll reach global parody
257
00:11:35.190 --> 00:11:37.443
at all management levels of women and men.
258
00:11:38.430 --> 00:11:39.780
We've made huge progress
259
00:11:39.780 --> 00:11:41.490
in African-American promotion rates.
260
00:11:41.490 --> 00:11:44.121
It's probably not a coincidence that we've become
261
00:11:44.121 --> 00:11:47.850
a lot more diverse and inclusive in the last decade.
262
00:11:47.850 --> 00:11:51.090
We've also 10Xed our market cap.
263
00:11:51.090 --> 00:11:53.040
We've just gotten to make sure
264
00:11:53.040 --> 00:11:54.630
that we have an equitable culture,
265
00:11:54.630 --> 00:11:56.940
which we're really proud and it's been a long journey.
266
00:11:56.940 --> 00:11:59.542
That the more diversity and inclusion
267
00:11:59.542 --> 00:12:01.350
that we've got in the organization,
268
00:12:01.350 --> 00:12:03.240
the more that we've seen it
269
00:12:03.240 --> 00:12:05.940
really show up in new innovations and opportunities.
270
00:12:05.940 --> 00:12:07.320
And that's been a part of our fuel
271
00:12:07.320 --> 00:12:09.123
of our higher growth rates that we've seen in the company
272
00:12:09.123 --> 00:12:10.530
over the last few years.
273
00:12:10.530 --> 00:12:12.570
What a wonderful way to end this discussion.
274
00:12:12.570 --> 00:12:14.460
Thank you both so much for joining.
275
00:12:14.460 --> 00:12:17.250
From the very beginning where we talked about innovation
276
00:12:17.250 --> 00:12:18.840
to the end where I think
277
00:12:18.840 --> 00:12:21.514
both of your passionate explanations
278
00:12:21.514 --> 00:12:25.530
of why taking on issues of inclusion and diversity
279
00:12:25.530 --> 00:12:28.533
gets to better outcomes, gets to better innovation.
280
00:12:29.699 --> 00:12:32.670
I think it's been really a very powerful
281
00:12:32.670 --> 00:12:34.416
and interesting discussions.
282
00:12:34.416 --> 00:12:37.583
(gentle upbeat music)