Cambridge University Press
0521838983 - The Business of Healthcare Innovation - Edited by Lawton R. Burns
Frontmatter/Prelims

The Business of Healthcare Innovation

The Business of Healthcare Innovation is the first wide-ranging analysis of business trends in the manufacturing segment of the healthcare industry. In this leading edge volume, Professor Lawton R. Burns focuses on the key role of the “producers” as the main source of innovation in health systems.

Written by professors of the Wharton School and industry executives, this book provides a detailed overview of the pharmaceutical, biotechnology, genomics/proteomics, medical device, and information technology sectors. It analyzes the market structures of these sectors as well as the business models and corporate strategies of firms operating within them. Most importantly, the book describes the growing convergence between these sectors and the need for executives in one sector to increasingly draw upon trends in the others. It will be essential reading for students and researchers in the field of health management, and of great interest to strategy scholars, industry practitioners, and management consultants.

Lawton Robert Burns, Ph.D., MBA is the James Joo-Jin Kim Professor, Professor of Health Care Systems and Management, and Director of the Wharton Center for Health Management and Economics at the University of Pennsylvania.

Never has the need for a reasoned analysis of the business of healthcare innovation been greater. The costs of innovation have been escalating steadily for decades and the willingness and ability of society to fund ongoing innovation is under strain. At the same time, as healthcare becomes increasingly complex those participating – basic and discovery scientists, product developers, providers, and those involved in regulating, managing, and funding the system – become more specialized and find it harder to understand the industry as a whole. Yet the components of the system are not independent of one another and we ignore the interrelationships at our peril. This badly needed volume will be a compelling read for those directly involved in healthcare, for students aspiring to enter the system, and for the rest of us who one way or another collide with the system more often than we might like.

Peter A. Tollman, Ph.D., Vice President and Director, Boston Consulting Group

The healthcare sector of the developed world’s economies has become one of the most significant in terms of both cost and human benefits created. The authors have done an excellent job of providing a clear understanding of the basic industry platforms that create both the product innovation and their associated benefits and costs. This book offers valuable insights in to how the diverse segments converge to create a rapidly changing healthcare experience impacting both patients and payors.

James Vincent, Chairman and CEO (ret.), Biogen

All sectors of the healthcare products industry are not the same. The Business of Healthcare Innovation provides an interesting primer on the various product categories while framing key questions regarding the future evolution of this fascinating industry.

Arthur D. Collins, Jr., Chairman and Chief Executive Officer, Medtronic, Inc.

This book presents a concise analysis of the factors influencing innovation in the health supplier sector. It is highly recommended for programs in health services management and will also be of interest to healthcare executives seeking to obtain a deeper understanding of the supplier side of the industry.

Stephen M. Shortell, Ph.D., Blue Cross of California Professor of Health Policy and Management Dean,
School of Public Health, University of California – Berkeley

This book is an up-to-date and authoritative description of innovation in the healthcare industry. While there is substantial change in how healthcare services are delivered and reimbursed, the focus here is on innovation in products. This is appropriate as new pharmaceuticals and devices generate the greatest new benefit to patients and value to our economy. In addition to related subject matter, the book provides a comprehensive discussion about the biotechnology industry, in particular those companies devoted to the healthcare sector: their innovations, financing, development, evolution, and how they are regulated on a global basis. The profound impact biopharmaceuticals are having on serious diseases is effectively illustrated by cogent examples of breakthrough medicines and the companies that developed them. This book presents compelling evidence that the pharmaceutical industry, with its productivity gap, has become ever more dependent on the biotechnology industry as its engine of innovation for new products.

L. Patrick Gage, Ph.D., Venture Partner, Flagship Ventures

This timely and well-written volume provides a much needed analysis of the healthcare sector that delivers technological innovation. I am particularly impressed with both the breadth and depth of coverage that Lawton Burns and his colleagues achieve here, given the expansive topic.

Edward J. Zajac, Ph.D., James F. Beré Distinguished Professor of Management and Organizations,
Kellogg School of Management

The business of medical technology is virtually ignored in most academic books, despite the sector’s substantial size, growth rate, complexity, and promise. The Business of Healthcare Innovation ably fills this gap. It couples authoritative, complete descriptions of each of the major components within medical technology – pharmaceuticals, biotechnology, medical devices, and information – with cogent analyses of how adept managers gain and sustain competitive advantage.

Regina Herzlinger, Ph.D., Nancy R. McPherson Professor of Business Administration,
Harvard Business School

The Business of Healthcare Innovation

Edited by

Lawton R. Burns, Ph.D., MBA

The Wharton School, University of Pennsylvania

CAMBRIDGE UNIVERSITY PRESS
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© Cambridge University Press 2005

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no reproduction of any part may take place without
the written permission of Cambridge University Press.

First published 2005

Printed in the United Kingdom at the University Press, Cambridge

A catalogue record for this book is available from the British Library

Library of Congress Cataloguing in Publication data

The business of healthcare innovation / [edited by] Lawton R. Burns.
  p.     cm.
Includes bibliographical references and index.
ISBN 0-521-83898-3 (hdk) – ISBN 0-521-54768-7 (pbk)
1. Medical care – Technological innovations. 2. Medical technology – Economic aspects.
3. Business forecasting. 4. Economic forecasting. I. Burns, Lawton R.
R855.3.B87 2005
610’.28–dc22 2005046981

ISBN-13 978-0-521-83898-6 hardback

ISBN-10 0-521-83898-3 hardback

ISBN-13 978-0-521-54768-0 paperback

ISBN-10 0-521-54768-7 paperback

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websites is, or will remain, accurate or appropriate.

To my two sets of parents,

Dr. and Mrs Robert K. Burns and

Dr. and Mrs Dimitri G. Polydefkis

Contents

© Cambridge University Press