Author: Didier Tranchier (Ph.D.)

Going to the JP Morgan / Bio Partnering conference in San Francisco for a week was a dream come true for me. Several people had told me it was the major annual global event in the healthcare industry—one you absolutely must attend at least once in your life. So I spent a lot of time dreaming about and looking forward to this moment, but as is often the case when expectations are very high… ...there can be disappointment in the end. In my case, none of that happened; just like every time I return to San Francisco, I’m always surprised and amazed by the spirit of innovation that characterizes this city and the entire region.

In this case, I’d like to share here my three key takeaways from JP Morgan / Bio Partnering: 

• #1 The Realm of Serendipity:

  I had expected large conference halls filled with a series of high-profile presentations attended by a massive audience of thousands of participants: in reality, I didn’t attend a single plenary session, because there are countless private and semi-private events—both formal and informal—taking place all over San Francisco throughout the day and… well into the evening; San Francisco becomes a vast networking hub where various companies in the healthcare sector mingle, particularly all the healthcare startups: BioTech, MedTech, PharmaTech, HealthTech, as well as CROs and, of course, all the pharmaceutical companies and medical device manufacturers, each of which has its own private space.

Ultimately, JP Morgan / Bio Partnering is an event whose purpose and decentralized structure make it possible to facilitate numerous exploratory meetings; by selecting specific themed events, attendees can easily discover new opportunities and quickly gain a comprehensive overview.

So we move from one place to another, going from one encounter to the next; this is the large-scale application of serendipity in the field of health innovation.
But of course, there are also major conferences with extraordinary announcements, particularly in oncology; here is a link that summarizes a few of them.

• #2 Cash Crunch in Search of a Business Model:

  All the discussions revolve around funding; the first question is often “How much money have you raised?” or “How much money are you looking for?”, but the phrase that comes up time and again is “cash crunch.” Investors are certainly there—they still have money in their bank accounts—but funding levels have dropped sharply since 2021.

But beyond the cash crunch, two things really stood out to me: 

• U.S. healthcare investors are only interested in the U.S. market; to them, the European market is in its infancy, complex, poorly structured, and funding levels are too low compared to the United States. The perspective is truly U.S.-centric: we first develop digital health in the United States and then impose our model on the rest of the world (with the exception of certain countries like China, Russia, and a few others, which remain impervious to global models).
• At a private event attended exclusively by CEOs of healthcare startups, all discussions centered on the “business model” for digital health, with the newest companies hoping to learn from the most advanced ones. However, it quickly became clear that all companies face the same challenges, regardless of their stage of development—whether seed, Series A, B, C, D, or beyond. They continue to search for their business model : the observation is surprising—no one, particularly in the U.S., has yet found the magic formula—and yet, digital health companies continue to grow and secure funding, driven by a shared conviction: digital health is a new frontier to be conquered and continues to inspire the intrepid.

• #3 The growing influence of U.S. law enforcement in the healthcare sector:

  In my view, the strength of American innovation in the healthcare sector stemmed primarily from the private healthcare system. I should note that I lived in the United States and had the opportunity to experience both systems firsthand, but that was before the passage of Obamacare, or the Affordable Care Act, in March 2010. Here are the two things I discovered: 

  • Public funding: As always, we tend to forget that the government is very active in the field of innovation and does not hesitate to fund ambitious projects; we recall the creation of the internet by ARPA (Advanced Research Projects Agency), which was initially called ARPANET, or SpaceX, funded by NASA, or more recently the $10 billion in public funding for Moderna. In the healthcare sector, several federal organizations offer public funding to innovative startups:
    • NIH, the National Institutes of Health, is a federal agency that funds research and innovation in the medical field, with an annual budget of $48 billion distributed primarily in the form of grants for research projects (by comparison, INSERM in France had a budget of 1.08 billion euros in 2022)
    • ARPA-H, the Advanced Research Projects Agency for Health, is a federal agency created in 2022 by the U.S. Department of Health and Human Services, modeled after DARPA (Defense Advanced Research Projects Agency), which pioneered the internet, and whose goal is to accelerate biomedical innovations and improve health and treatments for various diseases. The ARPA-H agency directly funds startups with a budget of $1.5 billion in 2023.
      In September 2023, ARPA-H launched a new initiative, ARPANET-H, a digital health innovation network that applies the principles of the internet to the healthcare sector, with the goal of fostering a true healthcare innovation ecosystem that brings together various stakeholders to create and fund new digital health services.

Of course, ARPANET-H is very similar to the Coalition Next, which was created more than two years later, but that’s probably just a coincidence! One could also compare ARPANET-H to the Agence de l’Innovation en Santé (AIS) in France.

• Public deployment: Although the bulk of the U.S. healthcare system remains private, the implementation of Obamacare in 2010 resulted in two major programs: 
  • Medicaid, a program that helps pay medical bills for low-income individuals
  • Medicare, a health insurance program for: People aged 65 and older,people under 65 with certain medical conditions, andpeople of any age with end-stage renal disease (ESRD) or ALS (also known as Lou Gehrig’s disease)

While a private system may be more flexible and potentially more innovative, it is difficult to make it uniform, let alone standardized. This is why the Medicare program is a true revolution: it has made it possible to create and roll out truly industrialized healthcare services across the United States, with measurable and controlled quality. To roll out Medicare services, the country is divided into 10 regions, and for each region, a private company has been selected to implement all Medicare services. In reality, the 10 regions are managed by just two companies, Livanta and Kepro.

In summary, the Medicare program is gradually becoming the fastest and most cost-effective way to introduce and roll out new digital health services in the United States, as it is governed by centralized decision-making, funded by a federal budget, and implemented through two private companies that cover the entire country. 

In conclusion, my first time at JP Morgan / Bio Partnering was a truly transformative experience. I’m coming away with a new network, new opportunities, fresh ideas, and, above all, new convictions: 

• San Francisco remains the global capital of digital innovation and, as always, on every trip, I’m amazed by their ability to come up with new ideas
• Digital health is still in its exploratory phase—no magic formula, no proven business model, but a whole generation of entrepreneurs who are deeply and passionately committed, driven by the “American dream,” to building a new and better society 
• The U.S. healthcare system is undergoing a profound transformation and, driven by the expansion of Medicare services, is gradually evolving toward our European social security system; and as my partner Pascal Bécache, it is worth remembering that it was Bismarck who invented social security in the 19th century, enabling Germany to enjoy better health and giving it a crucial competitive advantage over other countries; it is therefore with the deep conviction that Europe has a real role to play in the emergence and creation of a true digital health market—nothing is decided yet, let’s go for it!