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
    improving patient experience
    6 Ways to Improve Patient Satisfaction Within Hospitals
    December 1, 2021
    degree for healthcare job
    What Are The Health Benefits Of Having A Degree?
    March 9, 2022
    custom software development is changing healthcare
    Digital Customer Journey Mapping and its Importance for Healthcare
    July 21, 2022
    Latest News
    Beyond Nutrition: Everyday Foods That Support Whole-Body Health
    June 15, 2025
    The Wide-Ranging Benefits of Magnesium Supplements
    June 11, 2025
    The Best Home Remedies for Migraines
    June 5, 2025
    The Hidden Impact Of Stress On Your Body’s Alignment And Balance
    May 22, 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
    narrow-road-ahead-sign
    Narrow Networks in California?
    March 24, 2016
    Insurer Has E-Security Problem
    August 26, 2017
    What Kind of Inequality Matters to You?
    October 19, 2011
    Latest News
    Let Your Lawyer Handle the Work Before You Pay Medical Costs
    July 6, 2025
    Top HIPAA-Compliant Messaging Apps for Healthcare Teams
    June 25, 2025
    When Healthcare Ends, the Legal Process Begins: What Families Should Know About Probate and Medical Estates
    June 20, 2025
    Preventing Contamination In Healthcare Facilities Starts With Hygiene
    June 15, 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

ACA delays
ACA Delays Increase Marketplace Confusion
Massachusetts Gets Ready to Tame HealthCare Costs
Long Term Care Commission Report Falls Short
Direct-to-Consumer Advertising Still Influences Prescribing
Medicine Is a Profession, But Healthcare Is a Business

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

9 Lifestyle Tweaks That Can Add Years to Your Life
9 Healthcare Lifestyle Tweaks That can Add Years to Your Life
lifestyle
July 11, 2025
car accident lawsuit
Let Your Lawyer Handle the Work Before You Pay Medical Costs
Policy & Law
July 6, 2025
women dental care
What Is a Smile Makeover and How Much Does It Cost?
Dental health
June 30, 2025
HIPAA-Compliant Messaging Apps
Top HIPAA-Compliant Messaging Apps for Healthcare Teams
Global Healthcare Policy & Law Technology
June 25, 2025

You Might also Like

BusinessNewsPublic Health

TDI-132 Shows Promising Results in the Treatment of ALS

March 4, 2012

Salads Are NOT Good For You!

November 29, 2012
Image
Diagnostics

Blood Clots, Concussions and Hillary Clinton: A Second Opinion

March 9, 2013
SpecialtiesWellness

What Is The Endocannabinoid System (ECS) And How Can CBD Affect It?

July 23, 2019
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?