Big medtech and pharma are starting to take Big Healthcare Services seriously.

A recent article in the Financial Express highlighted how BD is pursuing a new programme called Alchemy with big Indian hospital and lab groups. GE and Abbott are following a similar approach. Essentially, it involves understanding the service providers business model, getting inside the CXO team running the business and positioning yourself as a partner who can help the CXO team to grow their company.

All this is essential as big private healthcare service companies become international, grow to many billions of revenue and start to practice “economic procurement” – those fell words which have struck terror into the heart of so many suppliers.

BD, Abbott and GE have one thing in common. Their product offering is typically entrerprise-wide. Yes, often, they do sell to specialists but their products – imaging equipment, reagents – are used widely across a healthcare service operator. This is not true for J&J or Medtronic, who are still selling very specific items – prostheses, for example – to individual doctors who exercise choice.

I’d argue that this is about to change dramatically and rapidly. More and more medtech and pharma products will be bought centrally by large private operators. The power of physicians to insist on a particular brand of surgical gloves is waning fast. Within a few years many will become employees inside large operators.

It is time medtech and pharma giants started to pay more attention. It won’t help you achieve this quarter’s sales targets, but getting into the heads of Big Healthcare Services will be essential for those who wish to maintain margins and sales over the next decade.