The healthcare industry is a very diverse industry, consisting of large and small players in pharmaceuticals, biotechs, in vitro diagnostics, and medical devices.

Although the healthcare industry has traditionally been very science-oriented, continuous environmental and economic changes have increased the value of business acumen for companies in the following sectors:

 

Pharmaceuticals

This industry sector comprises establishments primarily engaged in one or more of the following:

1. Manufacturing biological and medicinal products

2. Processing (i.e., grading, grinding, and milling) botanical drugs and herbs

3. Isolating active medicinal principals from botanical drugs and herbs

4. Manufacturing pharmaceutical products intended for internal and external consumption in such forms as ampoules, tablets, capsules, vials, ointments, powders, solutions, and suspensions

There are branded and generic drugs. When a pharmaceutical manufacturer develops a new drug, it obtains a patent for that drug. The patent protects the developer’s investment in developing the drug, and no one else can legally sell the exact same drug for a period of time (In the US, patented drugs are protected for up to 17 years). For example, a branded drug that is currently under patent protection until 2016 is Crestor. Crestor is used to treat high cholesterol and related conditions. No company can manufacture and sell a drug with the same ingredients as Crestor until 2016, when the patent expires.

Once that patent-protected time has passed, other companies can make a generic version. A generic drug is designed to work the same way in the body as the original brand-name drug, and most health regulating agencies require that generic drugs have the same active ingredient (the chemical that makes the drug work) as the branded drug. The only difference is the price as consumers are not paying for the initial R&D costs that accompanied the original branded drug. For example, Lipitor, a branded drug, is the best-selling drug in pharmaceutical history. It contains the active ingredient atorvastatin, and is prescribed to lower blood cholesterol. Lipitor’s patent expired in 2011, and generic drugs containing atorvastatin are now manufactured by other companies and sold at a fraction of the price.

Examples of pharmaceutical companies: Abbott, AbbVie, Merck, Novartis, Roche, Pfizer, Janssen 

 

Biotechnology

" 'Biotechnology' means any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use."

- UN Convention on Biological Diversity

Biotech firms usually partner with pharmaceutical companies to manufacture and market their products. From a career perspective, biotech companies tend to be smaller, more entrepreneurial environments; whereas, pharma companies embody a larger and more structured, traditional business model.

Since the 1970s, a revolution in biotechnology has resulted in a new class of medicine: the biologic. A biologic medicine is a large molecule typically derived from living cells and used in the treatment, diagnosis or prevention of disease. Biologic medicines include therapeutic proteins, DNA vaccines, monoclonal antibodies and fusion proteins. Biologics are engineered from living organisms to treat cancer, arthritis, HIV/AIDS and other debilitating diseases. An example of a biologic is the cancer-fighting inhibitor bevacizumab, under the trade name of Avastin and marketed by Genentech/Roche.

Biosimilars are versions of biologics, but unlike generic pharmaceutical drugs, they are not the same as the original biologic medicine. This is due to the fact that biologics are made of living cells, and even the slightest variation can impact the way these medicines are created. In the case of bevacizumab, several companies are already developing biosimilar versions although it only comes off-patent in 2018.

Examples of biotech companies: Amgen, Celgene, Gilead, Genzyme (Sanofi), Biogen

 

In vitro diagnostics

“In vitro diagnostics are tests that can detect diseases, conditions, or infections. Some tests are used in laboratory or other health professional settings and other tests are consumers to use at home.”

- U.S. Food and Drug Administration

In vitro diagnostics (also called molecular diagnostics) are becoming critical to the delivery of healthcare. They are used for screening, prediction, diagnosis, treatment selection and monitoring of diseases. Common examples of in vitro diagnostics are tests for glucose, liver enzymes, levels of electrolytes such as calcium, sodium, and potassium, and monitoring of drug levels.

Instrumentation Laboratory (IL), a company of the Werfen Group, is the world's leading developer of hemostasis testing systems. Its ACL family of testing instruments uses advanced optical technology and IL’s line of HemosIL reagents to evaluate coagulation disorders (inability to control blood clotting).

Examples of in vitro diagnostics companies: Werfen Group, Johnson & Johnson, Beckton Dickinson, Bio-Rad.

 

Medical Devices

Medical devices are any physical items used in medical treatment, from cardiac pacemakers to wheelchairs. Companies producing these devices and diagnostics deliver innovative products used primarily by health care professionals in the fields of orthopaedics, neurovascular, surgery, among others. 

For example, Smith & Nephew, a UK based medical technology company, manufactures the ANTHOLOGY Hip System, the first femoral implant designed specifically for minimally invasive hip replacement surgery.

Examples of medical device companies: Medtronic, Stryker, Beckton Dickinson, Smith & Nephew, Getinge