The Value Distribution in the Healthcare Industry

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The value distribution in the healthcare industry is not evenly spread. While drugs only contribute 13% to the overall healthcare value, they take considerable risks and have fluctuating profits due to innovation. Hospitals and professional services like doctors' offices contribute significantly more to healthcare value but are also major revenue generators. However, health insurance companies, instead of functioning as true insurers, act as access providers and make considerable profits without shouldering the risks during crises. The consolidation and lack of innovation in the industry have led to obfuscated and insulated profits among insurers, PBMs, hospitals, and pharmacies, differing significantly from the risk-taking and innovation seen in the pharmaceutical sector.

Last year Novo Nordisk, the Danish pharmaceutical company behind Ozempic and Wegovy, overtook LVMH to become Europe’s most valuable company. And the pull for Acquired to finally tackle healthcare (18% of US GDP!) became too strong for us to resist. While we didn’t know much about Novo Nordisk before diving in, our first thought was, “wow, seems like these new diabetes and obesity drugs mean serious trouble for big insulin companies.”

And then… we realized that Novo Nordisk IS the big insulin company. And in a story befitting of Steve Jobs and Apple, they’d just disrupted themselves with the drug equivalent of an iPhone moment. Once we dug further, we quickly realized this company has it all: an incredible 100+ year history filled with Nobel Prizes, bitter personal rivalries, board room dramas, a generation-defining silicon valley innovation, lone voices persevering against all odds — and oh yeah, the world’s largest charitable foundation at its helm. Tune in for one incredible story!

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‍Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.