Managing pathways to convergence in the life sciences industry

Abstract

Purpose

Convergence in the life sciences and health care industries – the combining of two or more of drugs, diagnostics and devices to create an improved health care product – is leading to new opportunities for business growth and product differentiation. This report aims to examine the issues around convergence, including the drivers, risks and regulatory issues.

Design/methodology/approach

This report is based on industry and literature reviews and builds on research carried out by Deloitte Research on the life sciences and health care industry.

Findings

The paper finds that technological advances, evolving health care needs and shifting market conditions are creating favourable conditions for convergence. Developing convergent technologies, however, has risks and uncertainties that life sciences companies need to consider along with regulatory issues. Cross‐sector partnerships are becoming more of a necessity and reality for health care firms, who have to be aware of the many operational and ownership issues involved.

Practical implications

Market pressures and opportunities are motivating life sciences firms of all types and sizes to invest in convergence. Convergent technology is transforming cardiovascular care, orthopedic treatment, tissue wound management and other clinical areas by creating solutions that are less invasive, less painful, more patient‐specific, more convenient and sometimes more affordable. Consequently, players from all sectors are entering the competition for R&D assets, setting up new rivalries and alliances.

Originality/value

In mapping the many factors surrounding convergence in the life sciences industry, this report enables firms to evaluate their own opportunities and priorities. It proposes a framework that companies can use to decide which pathway to convergence is best for them.

Citation

Eselius, L., Nimmagadda, M., Kambil, A., Hisey, R.T.(T). and Rhodes, J. (2008), "Managing pathways to convergence in the life sciences industry", Journal of Business Strategy, Vol. 29 No. 2, pp. 31-42. https://doi.org/10.1108/02756660810858134