Health Private Equity Archives - HEALTH & LIFE SCIENCES NEWS

Health Private Equity

Opportunities in Outsourced Pharmaceutical Services

by Kristian A. Werling | Jun 13, 2019 | Health Private Equity, Life Sciences, Life Sciences Private Equity

Pharmaceutical outsourcing has emerged as a robust—and rapidly growing—subsector of the life sciences industry. As the push for efficiency continues, more pharmaceutical, biotech and medtech companies are turning to contract research organizations (CROs), contract development organizations, medical affairs outsourcing and other service providers for help bringing products to market, manufacturing and distributing products, and improving quality. This trend is creating exciting new opportunities for investors in this burgeoning space.

Several factors are driving this growth in pharmaceutical services outsourcing:

Pharma companies are becoming more comfortable with outsourcing. Of outsourced service providers, CROs have the highest penetration, with approximately 50 percent of clinical trials outsourced. Other areas of outsourcing are far less penetrated, however, offering ample opportunity for investment. Consider researching opportunities in health economics or outcomes research market access, for example.
The current health care/pharma environment is rich for pharma outsourcing. Biotech is thriving: capital is readily available, and the US Food and Drug Administration regulatory environment for approval of new products is favorable. On the pharmaceutical front, ongoing consolidation has fostered an efficiency mindset. And across the health care and life sciences space, big data is being harnessed in new ways that make outsourcing easier and more efficient than ever.
We are in a period of great market fragmentation. The market is starting to skew toward earlier stage rather than big pharma companies. Trials also are increasingly designed with an emphasis on subpopulations and advanced analytics (such as specialty drugs targeted to specific genotypes). Traditional pharma often lacks [...]

Continue Reading

McDermott Named Health Practice Group of the Year by Law360

by McDermott Will & Emery | Feb 19, 2019 | Health M&A, Health Private Equity, Hospitals & Health Systems, Managed Care, Transition to Transformation

We greatly appreciate our readers continuing to turn to us for insight on the most critical legal, regulatory and transactional developments, and innovative collaborations transforming health care. Over the past year, McDermott’s Health practice made headlines for our work on several of the most high-profile collaborative transformations that took place in 2018: We were one of several law firms to advise CVS Health Corp. on its approximately $70 billion cash and stock purchase of health insurer Aetna Inc. McDermott also assisted Air Medical Group Holdings in its $2.44 billion acquisition of American Medical Response (AMR), a medical transportation company, from Envision Healthcare Corporation. It is because of our role in ground-breaking transactions like these that—for the fifth time in 10 years—McDermott was recognized by Law360 as the Health Practice Group of the Year.

We’re passionate about the results our clients are achieving and our role in helping them transform health care. We are equally passionate about what these results mean for the industry and health care consumers. Through our blogs, articles and health-focused events, we are committed to providing you with thought leadership that will help expand your field of vision as you navigate the rapidly changing health care landscape.

To read Law360’s profile of McDermott’s industry-leading health care practice, click here. McDermott was also named Practice Group of the Year in the Tax category. For more information about our approach to Collaborative Transformation, visit mwe.com/collaborativetransformation.

Dealmaking in Life Sciences – Valuations and Partnerships that Work

by Jed Gordon | Dec 27, 2018 | Health M&A, Health Private Equity, Life Sciences

Technology companies are pouring unprecedented capital, time and energy into the health care and life sciences industry, and are reshaping the deal landscape in the process. The top 10 US tech companies have made $4.7 billion in acquisitions in the health care space since 2012, according to CB Insights. Key market factors driving health care joint ventures and mergers and acquisitions include the merger of molecular science and computer technology, a growing focus on patient-centric care, increased mobility of consumer health products and services, and deep capital markets. In this fast-paced, proactive deals environment, traditional health players have exciting—and disruptive—new opportunities to enter into unexpected partnerships and pursue transformative innovation.

With Great Disruption Comes Great Opportunity

A helpful analogy for understanding the role of tech companies in this rapidly evolving sector is Uber’s disruption of the ride-hailing industry. When Uber came on the scene, on-demand ride-hailing was only available through taxicabs, and frequently only available in major cities. Now on-demand ride hailing is available through numerous companies and in areas that previously did not have such services available. Ride-hailing companies have also expanded their services offering to include food delivery.

Tech companies entering the health industry today are doing the same thing: reimagining and redefining the fundamentals of consumer access to health care. These companies often have deep insight into distribution and consumer purchasing behavior, and are willing to invest more capital and take on more risk than traditional health industry players [...]

Continue Reading

Three Environmental Factors Impacting the PPM Industry and Getting Deals Done

by Jerry J. Sokol | Jul 10, 2018 | Health Antitrust, Health M&A, Health Private Equity, PPM/ASC, Reimbursement

The PPM industry is by no means immune to the ebbs and flows of a traditional marketplace. Since the consolidation bubble burst in the 1990s, PPMs have gone from practically extinct to a once-again substantial component of the health care delivery system. But with greater influence comes more pressure to respond, and adapting to today’s complex operating environment requires those in the PPM industry to ensure they are building the foundational structure needed to help practices adapt to external factors and achieve long-term success.

Here are three defining aspects of today’s complex PPM environment, as well as several important considerations to help navigate environmental uncertainties and create a better patient experience.

Physician satisfaction and expectations are changing: As millennial doctors enter the workforce, they’re driving a sea change in terms of job expectations. With better work-life balance as a top priority, many young physicians are looking to be employees rather than employers, joining an existing practice instead of starting their own. Therefore, communicating what a PPM has to offer in terms of long-term incentives, rather than short-term profit margins, will be crucial to drawing in younger doctors and building a foundation that will last into the future.
Reimbursement strategies are evolving: Payer models and expectations continue to shift. Patients are being folded into a system that’s evolving from fee-for-service to value-based reimbursement models. As of now, the federal government is the biggest source of health care reimbursements in the country, but how legislative changes to reimbursement frameworks will impact [...]

Continue Reading

Looking Back at PPM/ASC 2018: What We Learned in Nashville

by Jerry J. Sokol | May 14, 2018 | Health M&A, Health Private Equity, PPM/ASC

The health care field is evolving at light speed, adapting to changing patient, physician and payer expectations. This is particularly evident in the physician practice management (PPM) and ambulatory surgery center (ASC) industries. We gathered recently in Nashville, Tennessee for the 2018 Physician Practice Management & ASC Symposium to explore and discuss these changes – from what’s improved in the PPM industry since the bubble-burst of the late 1990s to the challenges that lie ahead.

We had more than 500 attendees at the conference – from PPM/ASC executives, private equity professionals and investment bankers to provider-side representatives and fellow attorneys. With so many knowledgeable minds in one place, there was no shortage of learning opportunities around the critical business, transactional and regulatory issues facing the PPM/ASC industries today.

We saw one overarching theme surface during both sessions: running a PPM or ASC is more like running a co-op than a business. Therefore, in order to deliver meaningful value, there needs to be an honest and reciprocal relationship between management and physicians. In other words, there needs to be collaboration and input from all parties.

With that, here are our five key takeaways for bringing value to a PPM/ASC practice:

Understand today’s physicians, not those from the ‘90s: Today’s physicians are younger and leave medical school with more debt, but they also expect a more comprehensive work-life balance than Gen Xers did. As a result, they may be willing to work for large, established practices instead [...]

Continue Reading

5 Key Developments in the ASC and Physician Practice Industries

by Danielle E. Golino | May 10, 2018 | Health M&A, Health Private Equity, PPM/ASC

At McDermott Will & Emery’s 2018 Physician Practice Management and ASC Symposium, some of the leading minds in the PPM and ASC fields gathered to discuss key issues and their thoughts on the future growth and direction of the interconnected ASC and PPM industries. Below are a few of the key takeaways from McDermott’s largest conference to date:

The True Platform. Loose confederacies of physician practices do not equal a sophisticated and integrated platform. The most successful platforms have a developed infrastructure, a talented leadership team, a simple model and a unified vision to build a national/regional company focused on quality of care, patient satisfaction and physician engagement. Competition for those platforms is tough, and building those platforms from scratch requires time, capital, organization and patience.
PPM Differentials. We asked the CEOs of national PPMs why today’s PPMs are different than the failed PPMs of the 1990s. They discussed several key differences, including a shifting physician mentality, difficulty in sustaining independent medical practices, patient dissatisfaction with health care, the shift towards value-based care, the management company’s emphasis on delivering value, and new governance structures/compensation models that encourage communication and alignment among stakeholders. Despite these differences, it is clear that there will be some winners and losers, and that PPMs with a clear growth strategy, a compelling vision, a thoughtful compliance infrastructure and an emphasis on patient satisfaction have the greatest likelihood of success.
ASC Perspectives on the PPM Consolidation. We asked the CEOs of leading [...]

Continue Reading

A PPM Preview: Q&A with Leaders on What’s Driving the Industry

by Jerry J. Sokol | Apr 24, 2018 | Health M&A, Health Private Equity, PPM/ASC

Physician practice management (PPM) and ambulatory surgery center (ASC) companies continue to attract tremendous attention of private equity investors and continue to play a key and growing role in the healthcare services sector.

In advance of our 2018 Physician Practice Management & ASC Symposium, I wanted to get a better sense of where the industry stands and how best to navigate it in 2018, so I reached out to four recognized experts on the matter:

Andrew Kaplan, Principal, Bain Capital Private Equity Investment: Surgery Partners
Barry Tanner, CEO, Physicians Endoscopy
Wayne DeVeydt, CEO, Surgery Partners
Marc Cabrera, Managing Director and Co-Head of Healthcare, Oppenheimer & Co.

Andrew, Barry, Wayne and Marc will all be speaking at McDermott Will & Emery’s 2018 Physician Practice Management & ASC Symposium, taking place in Nashville, TN, on April 25 – 26. Andrew will be speaking about smart investment principles and private equity as part of the “What the Money Thinks” panel; Barry and Wayne will join our “State of the ASC Industry” panel to discuss the strategies driving today’s practices; and Marc will discuss PPM/ASC transaction strategies in the “Preparing a Large Practice for Sale” panel. Here’s a preview of what’s on their minds.

Q. Why does private equity investment continue to flow into the PPM and ASC [...]

Continue Reading

read more

Riding the PPM Wave of the 90s: Learning from the Crash to Prepare for the Future

by Jerry J. Sokol | Apr 17, 2018 | Health M&A, Health Private Equity, PPM/ASC
The ‘90s was a wild ride for the physician practice management (PPM) industry. I know this from personal experience. I rode the PPM consolidation wave of the ‘90s up to the top – and I saw it crash based on a number of factors.

One reason being that physicians resented that PPMs were not delivering value or on their promise to “repair/restore” the income that physicians sold to PPMs. There was also a devaluation of the PPM equity that physicians received as a large part of their sale price, as well as a general reluctance from office-based physicians to truly be part of a large organization, as opposed to “ruling” their own kingdoms. The PPMs were also burning through cash to support their substantial corporate overhead, which did not help the equation (there was no such thing as a “platform” to start off the PPM).

Fast-forward to 2018, where shifting markets demand a new approach to investments and a new set of priorities. Below are four strategic imperatives for success in today’s increasingly-competitive, ever-changing PPM marketplace:

Achieving physician alignment: One of the biggest issues in the late ‘90s was the “us versus them” mentality that existed between physicians and physician practice management companies, both in terms of how deals were structured and the economics of the deal itself. From a structural perspective, deals must be designed to ensure physicians are incentivized, committed and that their interests are aligned.Whether this is accomplished through [...]

Continue Reading

read more

5 Key Topics Explored at McDermott’s 2018 PPM & ASC Symposium

by McDermott Will & Emery | Apr 16, 2018 | Health M&A, Health Private Equity, Hospitals & Health Systems, PPM/ASC
There are many critical issues facing the physician practice management (PPM) and ambulatory surgery center (ASC) industries today, including the effects of sky-high valuations, concerns about sustainability, and the importance of delivering on value. This current environment demands new approaches to PPM structures — one that is focused on alignment and designed to enable growth.

Below are five key market issues to be addressed at the 2018 Physician Practice Management & ASC Symposium in Nashville, TN on April 25-26, where industry leaders will come together to discuss trends in the current landscape and the myriad business, transactional and regulatory issues that exist today, including: (more…)

read more

Q&A: Shifting Trends in Specialty Pharmacy to Continue in 2018

by McDermott Will & Emery and Karen Owen Gibbs | Apr 10, 2018 | FDA, Health M&A, Health Private Equity, Hospitals & Health Systems, Life Sciences, PPM/ASC
Specialty pharmacy is not going away any time soon – by 2020, it’s expected that the pharmacy industry’s revenue will exceed $483 billion, with almost all growth as a result of specialty drugs (high-cost medications used to treat chronic conditions, such as cancer). It’s also estimated that the next generation of pharmaceutical “blockbusters” will be primarily specialty products. As the make-up of the pharmaceutical market shifts, we’re also seeing changes with the role of pharmacy benefit managers and other medical groups in the process. How are these shifts in specialty pharmacy impacting the health care system as a whole?

We asked Karen Gibbs, McDermott partner and former VP and Senior Counsel at CVS, to share her expertise on the subject and her thoughts on what’s to come.

Q. Investments in niche sectors of pharmacy services, specialty pharmacy and pharmacy benefit management have gained huge traction recently. What’s driving the shift away from more traditional pharmacies?

A. Traditional pharmacies are retail establishments and have been suffering from the same earnings pressure that all retail establishments have endured. Pharmacy benefit managers (PBMs) typically own mail and specialty pharmacy operations, which generate revenue in a manner complementary to that derived from the pharmacy benefit management services. The margin on specialty pharmacy and PBM services is significantly more than retail pharmacy. (more…)

read more

Older Posts »

« Newer Posts

Search for:

BLOG EDITORS

Jerry J. Sokol

Stephen W. Bernstein

STAY CONNECTED

Subscribe

TOPICS
TOPICS

ARCHIVES
ARCHIVES

RECENT POSTS

CMS Advises Preparatory Steps for Anticipated PrEP Coverage Transition to Medicare Part B

This Week in 340B: April 16 – April 22, 2024

This Week in 340B: April 9 – April 15, 2024

This Week in 340B: April 2 – April 8, 2024

This Week in 340B: March 26 – April 1, 2024