By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    headphones can create health problems
    The Harmful Health Effects of Using Headphones
    September 24, 2021
    Headache causes
    4 Causes Of Headache You Probably Didn’t Know About
    December 28, 2021
    follow these steps to recover from your injury
    What Steps Should You Take to Recover More Quickly from an Injury?
    April 12, 2022
    Latest News
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
    Why Custom Telemedicine Apps Outperform Off‑the‑Shelf Solutions
    July 20, 2025
    How Probate Planning Shapes the Future of Your Estate and Family Care
    July 17, 2025
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Contraception for Techno-Doctors
    July 13, 2011
    ACP Ethics Manual on Social Media, Catastrophes, and More
    January 13, 2012
    Hippocratic Oath, Then and Now
    August 23, 2012
    Latest News
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
    How Health Choices and Legal Actions Intersect After an Injury
    July 17, 2025
    How communities and healthcare providers can address slip and fall injuries with legal awareness
    July 17, 2025
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: When a Health Care Business Model Disruption is Self-Destructive
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Technology > Medical Innovations > When a Health Care Business Model Disruption is Self-Destructive
DiagnosticsMedical InnovationsMobile HealthPolicy & LawRemote DiagnosticsWellness

When a Health Care Business Model Disruption is Self-Destructive

David Davidovic
David Davidovic
Share
5 Min Read
SHARE

Some time ago, I wrote an article here on the Uberization of Healthcare and how silly that expression is. In essence, I tried to tamper the enthusiasm behind so many healthcare start-ups wanting to disrupt the whole system but having weak premises with which to do so.

Three companies have recently gained notoriety in the healthcare space. Each openly expressing their desire and plans to disrupt everything based on completely new business models – at least that’s what they said.

Valeant:

Some time ago, I wrote an article here on the Uberization of Healthcare and how silly that expression is. In essence, I tried to tamper the enthusiasm behind so many healthcare start-ups wanting to disrupt the whole system but having weak premises with which to do so.

More Read

Hybrid Cardiac Procedures: Teaming Up for More Efficiency of Cardiac Treatments in Pediatrics
Moving mHealth to the Next Frontier: Aligning Patients, Physicians, Healthcare Providers & Payers
Advanced Care Planning: What to Do Now
The Mid-Life Crisis Strikes Apes, Too
9 Very Important Signs That It’s Time For An Eye Test

Three companies have recently gained notoriety in the healthcare space. Each openly expressing their desire and plans to disrupt everything based on completely new business models – at least that’s what they said.

Valeant:

To be fair, Valeant is a hugely successful pharmaceutical company that seemingly came out of nowhere. They grew very quickly through a long and rapid series of acquisitions. The novelty in their model is that they don’t believe in or need to do any research, which is costly but considered a critical capability in the biopharma sector.

This model works well as long as you keep growing by buying other companies and products, by consolidating operations and cutting costs, by raising prices much faster than inflation and, as they have been accused of doing, by manipulating market channels to their advantage.

The problem is that this is not sustainable in the long run. As we are seeing now and has been reported eslewhere, Valeant is facing huge headwinds as intricacies of their model and possible questionable practices, including pricing, come to light. In addition, at some point you do run out of companies and products to buy – at least at a reasonable price – and without any research, the house of cards starts to fall.

No, they have not invented a new pharma business model.  The model still requires product innovation, volume growth, transparency and respect for regulations.

Theranos:

This little company, started and run by a very smart and ambitious Stanford drop-out visionary with incredible political connections and no healthcare experience, is making a lot of waves. They promised a new business model for diagnostics based on a new proprietary and secret technology that allows many lab tests to be performed with as little as one drop of blood. 

Their model was to disupt the whole diagnostics market. Their approach included maintaining secrecy over their science and methods. Their strategy included not having a single senior scientific member on their board.

Well, sooner or later you do have to face external scrutiny.  The FDA and others, including their retail partners, have started asking questions, and the answers continue to be, “you’ll see, we’ll be releasing all that soon.” In reality, most of the tests that they have been running (all but one) have been done using the same old technolgies and methods.

No, they have not invented a new diagnostics business model. The model still requires science, peer review, and regulatory scrutiny.

Turing

This start-up has become the face of greed, run by an ambitious former hedgefund manager with no experience in the industry or in anything resembling a business with a heart. His business model: buy old products sold for little money and turn around and sell them for a fortune. His model in action: taking an $18 pill drug and overnight change the price to $750.

Not sure if he expected to be able to do this under the radar and not be noticed, but he’s gotten a lot of attention, including from the U.S. Senate. In the process, he has attracted a lot of unwanted attention to the industry, undoing years of value-driven actions and communication efforts. 

No, Turing did not invent a new pharmaceutical business model. The model still requires a justification for prices and price increases as well as sensitivity for customers and patient.

These are three examples of industry disrupter-wannabes who, by ignoring fundamentals, have entered a path of self-destruction.

 

TAGGED:Business ModelethicspharmaceuticalTheranosTuringValeant
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

technology in medical research
The Tools Helping Medical Researchers See the Full Picture
News Technology
August 3, 2025
5 Steps to a Promising Career as a Healthcare Administrator
5 Steps to a Promising Career as a Healthcare Administrator
Health
July 31, 2025
holistic dental
Holistic Dentist Services Are Natural and Safe
Dental health Specialties
July 28, 2025
botox certification
Help Improve People’s Skin Health Via Botox Certification
Skin Specialties
July 22, 2025

You Might also Like

Medicaid
Health ReformNewsPolicy & LawPublic Health

Effects of Medicaid Expansion Under the ACA: Preliminary Results

May 9, 2013
health IT
eHealthHealth ReformPolicy & LawPublic HealthTechnology

ikaSystems CEO Joe Marabito on Transforming Health Plan IT Systems [TRANSCRIPT]

June 7, 2013

BYOD or BYOT

March 11, 2012

Why Doctors Tend to Overtreat

June 14, 2012
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?