Healthtech to outshine market expectations next year

Published by

Healthtech to outshine market expectations next year

Mike Hoey
Sep 07, 2022

Mike Hoey is the President of Source Meridian

It’s strange to think that just a year ago the S&P 500 was kicking off yet another month of solid growth. Fuelled by strong corporate earrings reports, particularly in the tech sector, the Nasdaq composite and the Dow Jones Industrial Average were set to rise 1.4% and 4% respectively by the end of the month.

Fast forward a year and the transition has been remarkable. Despite recent confusion over its definition, the US economy just experienced two consecutive quarters of negative GDP growth, signaling a recession.

At the same time, while there remain challenges, enterprises and investors should be aware that there are still sectors that are performing well despite the downturn.

Healthcare: Is it really ‘Recession Proof?’

Historically, healthcare has been one most stable and consistent performer in the US economy both in boom times and during recessions. And as the Baby Boomer generation progresses into retirement and geriatric care, we can expect to witness expenditure in the sector increase from where it stands today at 19.7% of GDP.

Given that healthcare accounts for 1 in 5 dollars in terms of economic activity, in a country where the number of older patients increased by 14.4 million (or 36%) between 2009 and 2021 (compared to an increase of 3% for the under-65 population), it’s safe to assume that demand for medications and healthcare procedures will increase in the coming decade.

Additionally, McKinsey reports that when it comes to the ongoing tech talent scarcity, the healthtech market holds a substantial advantage over traditional tech companies due to salaries they are able to offer top-performing jobseekers. This means that even if there is a hiring slowdown across the entire tech sector as a whole, the best and brightest will likely flow into healthtech firms.

Finally, taking a macro perspective, the stock market may be performing poorly, however mass layoffs haven’t occurred yet. Employment remains high, which means more people have health insurance than they would during a ‘normal’ recession. This is good news for the healthcare industry and for a nation at the tail-end of a prolonged public health crisis.

Playing the long game

During the pandemic we saw multiple COVID vaccines developed in the span of a short period. It truly was a miracle of modern science and innovation. We are still seeing benefits to the amazing scientific innovations and breakthroughs achieved worldwide during the early days of the pandemic.

With that in mind, we should not expect clinical research to change due to a recession. What we can expect, however, is a more accelerated pace to the research and develop aspect of each new drug’s lifecycle. Traditionally, most pharmaceutical companies take an average of 10 to 15 years to develop and release a new drug. This is due to two main factors:

1) The sheer amount of time and money required to roll out full-scale clinical drug trials.

2) The lengthy federal approval process that all new drugs are required to go through.

Since the pandemic these two factors have decreased significantly in terms of their severity. The first major leap forward comes from how AI can be applied to this process to streamline and organize the huge amount of data generated by clinical trials. Second, new technologies now exist that can simulate the way a hypothetical drug will interact in the human body.

By digitizing the process end-to-end and accelerating it with machine learning, the healthtech industry is poised to bring the entire process of bringing new drugs to market out of 1972 and into 2022, according to Deloitte. Paired with recent legislation such as the 21st Century Cures Act, which is designed to speed up the approval timeframe and rmeoveroadblacks, we should expect to see even more breakthroughs.

Forever on guard against new diseases

As climate change and habitat destruction accelerates the frequency with which humans encounter novel animal-born viruses, it’s clear to see that pandemics aren’t going away.

Prior to the pandemic we saw outbreaks of mosquito-borne Zika virus in the Americas, and with current reports of monkeypox circulating in 42 countries, the need for the healthtech industry to rapidly innovate on the new mRNA vaccine platform developed to combat Covid is greater than ever before.

The CDC expects this new platform to hold the potential to cure some of the most devastating diseases that plague mankind, including rabies, Zika, cytomegalovirus, and HIV. It’s not farfetched to think that within the next two decades even common illnesses like the seasonal flu will either be a thing of the past or be much better managed due to this new class of vaccine.

One thing we learned during the pandemic was that our geopolitical relationships seldom have an impact on innovation. Despite the West’s increasingly pronounced rivalries with China and Russia, the global scientific community truly can work together to overcome the biggest problems facing humanity.

It’s remarkable what this recession-proof industry has been able to accomplish in recent years. In the past 24 months we’ve truly seen what this sector can do in terms of innovation and scale, and in those two short years are layers of insights and innovation yet to be fully unleashed.

And so, with a spree of trends and new technologies on the horizon, it pays to be bullish on healthcare in 2022.

Written by Mike Hoey

Related articles

Women engineers making their mark in Tech

Their contributions drive the establishment of inclusive organizations, foster conscientious environments and support business success.

5 eco-conscious changes driven by technology

Do you like the idea of satisfying your needs without jeopardizing the resources and opportunities of future generations?

Healthtech to outshine market expectations next year

Even if there is a hiring slowdown across the entire tech sector as a whole, the best and brightest will likely flow into healthtech firms.

NASA style reinvention: Major changes in the pharma industry

A successful vaccine for a new pathogen and over 10 billion doses distributed shifts how people see the pharma industry.

CPA firm issues SOC 2 – Type 2 report Source Meridian

Our SOC 2 report has shown that we have appropriate controls to mitigate risks associated with our services.

“The doctor will see you now”: How AI is disrupting health tech

We collaborate with global health tech firms, boosting their AI and ML projects. The AI industry is set to surge by over 1100% from 2020 to 2028.

The DevOps Ice cream: 6 flavors that you should taste!

When we start to talk about DevOps people usually say that the term as it is is too broad or complex to have any practical implication.

Unleashing sales potential: Machine Learning in telemarketing

The Machine Learning revolution has taken the tech industry by storm, especially Deep Learning (based on Artificial Networks).

Artificial intelligence: Enriching people’s way of life

Who would have thought that technology would become such a fundamental part of our everyday lives?

Key motivations for embrace Data Science

By utilizing semantic analysis, patterns, statistics, mathematics, and machine learning, data science identifies patterns within extensive data.

Unpacking UI and UX: Exploring language and applications

To help you better understand UI and UX development, we’ll define these terms and explain their differences and purpose.

Women engineers making their mark in Tech

Their contributions drive the establishment of inclusive organizations, foster conscientious environments and support business success.

5 eco-conscious changes driven by technology

Do you like the idea of satisfying your needs without jeopardizing the resources and opportunities of future generations?

Healthtech to outshine market expectations next year

Even if there is a hiring slowdown across the entire tech sector as a whole, the best and brightest will likely flow into healthtech firms.

NASA style reinvention: Major changes in the pharma industry

A successful vaccine for a new pathogen and over 10 billion doses distributed shifts how people see the pharma industry.

CPA firm issues SOC 2 – Type 2 report Source Meridian

Our SOC 2 report has shown that we have appropriate controls to mitigate risks associated with our services.

“The doctor will see you now”: How AI is disrupting health tech

We collaborate with global health tech firms, boosting their AI and ML projects. The AI industry is set to surge by over 1100% from 2020 to 2028.

The DevOps Ice cream: 6 flavors that you should taste!

When we start to talk about DevOps people usually say that the term as it is is too broad or complex to have any practical implication.

Unleashing sales potential: Machine Learning in telemarketing

The Machine Learning revolution has taken the tech industry by storm, especially Deep Learning (based on Artificial Networks).

Artificial intelligence: Enriching people’s way of life

Who would have thought that technology would become such a fundamental part of our everyday lives?

Key motivations for embrace Data Science

By utilizing semantic analysis, patterns, statistics, mathematics, and machine learning, data science identifies patterns within extensive data.

Unpacking UI and UX: Exploring language and applications

To help you better understand UI and UX development, we’ll define these terms and explain their differences and purpose.

We’d love to hear
from you!

At Source Meridian, we are always looking for talented individuals who
share our passion for innovation and technology.

Categorised in:

This post was written by Santiago

Comments are closed here.