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Rise of Global Healthcare

Market Overview:

The Global Healthcare Market size was valued at USD 10.30 Trillion in 2021 and is projected to reach USD 21.06 Trillion by 2030, growing at a CAGR of 8.27% from 2023 to 20301 (Figure 1). This growth is fueled by an aging population, increasing chronic diseases, and expanding patient access to medical technology in developing nations.

GLOBAL HEALTHCARE MARKET SIZE, 2021-2030
CAGR
8.27%

Figure 1: Global Healthcare Market Size, 2021-2030.

Source: Verified Market Research Group, 2023

The Big Changes:

The global healthcare services landscape is undergoing a significant historic transformation driven by five key trends (Figure 2):

  • 1 Increased M&A transactions among global healthcare services companies
  • 2 The increased role for management discipline across U.S. healthcare
  • 3The growing influence of private equity investment capital
  • 4The growing prominence of virtual care
  • 5The ability for data management systems to support complex delivery platforms.
Figure 2: 5 Trends shaping the global healthcare services market.

Together, these trends are shaping a dynamic healthcare ecosystem, driving innovation, and optimizing patient experiences on a global scale. Each trend is, in fact, fueling the other, the combination of ever larger healthcare delivery platforms with access to almost limitless capital that are now capable of engaging in large global initiatives combined with today’s data-driven management sciences, and as was the case with retail, the re-imagining of healthcare delivery in a virtual framework is creating new limitless possibilities for access and scalability. It is not a surprise that Amazon, Walgreens, CVS, Walmart, and other large global retail corporations have all invested and continue to invest many billions of dollars to be part of this latest digital revolution.

We have seen a similar sudden emergence of “global leaders” in past industries, from retail (Wal-Mart and Amazon) to automotive (Ford & General Motors) to banking (Goldman Sachs, Bank of America, and JP Morgan). In past examples, it has been U.S. market leaders who have ultimately acted as the pioneers in building a global presence across Europe, Latin America, and the Far East. We believe a similar phenomenon is now occurring in U.S. Healthcare, such that in the next few years, the very term “U.S. healthcare” will lose its long-standing prominence in both commerce and society to be replaced with Global Healthcare, the same way that U.S. Pharma is not really the primary term when discussing the Pharma industry, but instead “Global Pharma”.

In our opinion, we are in the ninth inning of “U.S. Healthcare Services” and entering the first inning of “Global Healthcare Services”

Global M&A Activity

The global healthcare services sector is increasingly a target for global private equity (PE) firms seeking post-pandemic growth, with robust activity in 2022 totaling 914 deals valued at US$128.4 billion (Figure 4).

Significant Global Healthcare Services Deals In Recent Years:
  • Walgreens Boots Alliance acquiring US-based Summit Health for US$8.9 billion. This conglomerate now operates in the U.S and across Europe.
  • CVS Health/Aetna acquires Oak Street for US$9.6 billion (will integrate into Aetna’s global platform).
  • Amazon acquires OneMedical for US$3.5 billion (will integrate into Amazon’s global platform).
  • KKR's US$3.3 billion acquisition of IVIRMA Global, a global leader in reproductive fertility clinics.
  • Carlyle Group and PAI Partners agreed to acquire Theramex for US$1.4 billion, targeting international expansion in women's health specialty pharma. Theramex operates in 80 different countries across Europe, Africa, Asia-Pacific and Latin America.
  • Thermo Fisher’s acquisition of UK diagnostics company The Binding Site for US$2.8 billion. This strategic move signals a broader trend among major diagnostics companies like Abbott, Roche, BD, and Siemens, showing an interest in expanding their portfolios to include more comprehensive testing capabilities for cancer screening and treatment selection.
The Traditional Global Pharma, Medical, and Biotech investments continue - Recent deals included:
  • Amgen's acquisition of Horizon Pharma for US$28.3 billion
  • General Electric's spin-off of GE HealthCare Technologies for US$22 billion
  • Johnson & Johnson's US$19.3 billion investment in heart pump manufacturer ABIOMED
  • Pfizer's US$11.6 billion acquisition of biotech firm Biohaven and the US$5.3 billion acquisition of US biotech firm Global Blood Therapeutics (GBT), specializing in treatments for sickle cell disease.
  • Bristol Myers Squibb's (BMS) announcement of a US$4.6 billion purchase of US cancer drugmaker Turning Point in June.
  • EQT and Santo Holding's US$5.7 billion purchase of Denmark-based WS Audiology, which operates across 180 countries.
  • Astorg Partners acquired Corden Pharma International, a global leading manufacturing and contract development organization, for US$3.2 billion.
  • The sale of Covetrus, a global animal-health technology and services firm, to Clayton, Dubilier & Rice and TPG Capital for US$3.4 billion.
Beyond Acquisitions: Building Partnerships and Collaborations

It’s not all about acquisitions. International platforms are also forging strategic partnerships and collaborations with US providers. For instance:

  • GE Healthcare and China’s Sinopharm: GE HealthCare formed a long-term joint venture with Sinopharm as it seeks to make additional inroads in China’s medical device market.
  • In 2022, China contributed around 13% of GE Healthcare's $18.3 billion in revenue, as indicated by the company's latest annual report. With a workforce of 7,200 employees in China, this number falls just below half of the 16,300 employees that GE Healthcare maintains in the United States.
  • Thorne HealthTech and Europe’s AstraZeneca: Thorne HealthTech, a leader in developing innovative solutions for a personalized approach to health and wellness, partnered with AstraZeneca, a leading global biopharmaceuticals company. Thorne’s collaboration with AstraZeneca brings together traditional biology with innovative AI-driven technologies, representing the future of drug discovery.

These partnerships highlight the growing recognition of the power of international collaboration in driving healthcare innovation and improving patient lives.

The Increasing Activity in Global Virtual Care:

Market Overview:

  • Global Virtual Care Service Market: Virtual Health Service Market is projected to cross USD 50.9 Billion by 2032, exhibiting an impressive CAGR of 22.4%.
Global Virtual Health Service Market

Size, by Consultation Mode, 2022-2032 (USD Billion)

  • Telemedicine Usage: 52% of consumers globally have used telemedicine services in 2022, representing 35% of primary care appointments.
  • International Region Growth: Asia Pacific is estimated to be the fastest-growing virtual care market, driven by large populations, rising healthcare costs, and government initiatives.

Note: Malaysia and Philippines were not included in 2019 survey
Source: Bain Front Line of Healthcare Asia-Pacific Survey, 2021 (n=1,750), 2019 (n=1,521)

International M&A Activity Fueling Virtual Care Expansion:
  • Teladoc Health (US) and MédecinDirect (France): Teladoc acquired MédecinDirect in 2017, expanding its virtual care footprint in Europe and gaining access to a wider patient base.
  • Babylon Health (UK) and SHL Telemedicine (Germany): Babylon Health acquired SHL Telemedicine in 2019, strengthening its position in the German virtual care market and bolstering its AI-powered healthcare services.
  • Ping An Good Doctor (China) and MeMD (US): Ping An Good Doctor, a leading Chinese virtual care provider, acquired MeMD in 2018, establishing a presence in the US market and gaining 5 million US patients.
  • Zus Health (Singapore) and DokterSehat (Indonesia): Zus Health acquired DokterSehat in 2022, expanding its virtual care services into Indonesia and reaching a population of over 270 million.

The future of virtual care is not just about international companies acquiring platforms; it’s about collaboration and knowledge sharing. We’re seeing:

  • Partnerships between international and local providers: This allows for the exchange of best practices and the development of culturally sensitive virtual care models.
  • Investments in interoperability standards: This ensures seamless data sharing and patient care continuity across different virtual care platforms, regardless of their location.
  • Focus on AI and telehealth integration: AI-powered diagnostics, chatbots for triage, and remote monitoring tools will further enhance virtual care delivery and personalize patient experiences.

The internationalization of virtual care is transformative. By breaking down geographical barriers and leveraging global expertise, it has the potential to democratize access to quality healthcare, reduce costs, and improve patient outcomes around the world. It’s an exciting time to be a part of this evolving landscape, and one can’t wait to see how this virtual revolution continues to reshape the future of healthcare.

Sources:

  • Verified Market Research Group, 2023
  • White & Case, Global M&A Activity 2022
  • Fortune Business Insights, 2022
  • Insider Intelligence, 2022
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