SAN FRANCISCO – One of the more interesting speakers at last month’s JPMorgan Healthcare Conference was Dr. Erich Hunziker, CFO of F. Hoffman-La Roche (Basel, Switzerland), who – in something a departure from the usual corporate dog-and-pony show approach at such events – talked more about broader issues facing healthcare firms than he did about specific products coming down the Roche pipeline.
While healthcare “is a challenging industry to be in,” he said that it’s not a matter of there not being a demand for products from firms such as Roche, whose core businesses are in the pharma and diagnostics/devices sectors. Indeed, said Hunziker, “everyone is getting older and wants to be healthier older.”
He noted that for those in healthcare relying on “innovation” as a watchword in describing their products, the premium for “innovation” must be earned by “medical differentiation.”
Hunziker said that Roche, like its competitors, is “confronted with cost pressures, especially in our core diagnostics business.” Noting that in diagnostics, it is “almost impossible to enforce price increases,” he said it is a reality of today’s economic climate that, “like retail, auto, airline and consumer electronics, [we] no longer are able to pass cost increases on to our customers.”
From that reality has emerged the Roche 2015 Project, with the accompanying slogan, “Innovation is key.”
Hunziker said Roche 2015 really represents the thinking as the company evolves from a traditional pharma base to a company focused on “individualized medicine.” He described it as “a targeted approach to bringing high-tech innovation to the customer.”
Referring to the combination of diagnostics and pharma businesses as offering the opportunity to develop “value-added products,” Hunziker said, “we have pharma and diagnostics under one roof; we are bringing researchers [from both sides of the business] together to come up with the right products.”
He characterized Roche as having a “very open” stance when it comes to innovation. “We don’t care where ideas come from,” Hunziker said, citing the company’s culture as one in which a “universe of innovation” exists.
Citing healthcare information technology as “an interesting target area,” he said health IT “clearly is emerging – the profit potential will be there.”
Hunziker said having a diagnostics business within which IT is an important component “gives us a good step [through] this door of development.”
He listed diabetes care, immunodiagnostics and molecular diagnostics as being particular “pillars of value” for Roche moving forward, and said the company’s broad global geographic reach makes for good “risk diversification” as it taps future growth areas.
— Jim Stommen, Executive Editor