Why Healthcare is (Finally) Chasing Consumers

Goldman Sachs Exchanges

Goldman Sachs

Business

4.4 • 1K Ratings

🗓️ 21 June 2018

⏱️ 33 minutes

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Summary

From consumers' growing influence and vertical consolidation to the shift to value-based care and questions around drug pricing policy, there's a lot going on in the healthcare industry. Jo Natauri, global head of healthcare investing in Goldman Sachs' Merchant Banking Division, joins us in the studio to discuss what corporations and investors are focused on. "Operating-wise, these businesses are performing really well," Natauri says. "Healthcare is a defensive industry. But if you look at the environment right now, it's really tied to the risk around policy." This podcast was recorded on May 14, 2018. This podcast should not be copied, distributed, published or reproduced, in whole or in part. The information contained in this podcast does not constitute research or a recommendation from any Goldman Sachs entity to the listener. The views and opinions expressed herein should not be construed as an offer to buy or sell any securities and such views/opinions may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefor (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed. The views expressed in this podcast are not necessarily those of Goldman Sachs, and Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice or recommendations in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs to that listener, nor to constitute such person a client of any Goldman Sachs entity. Copyright 2018 Goldman Sachs & Co. LLC. All rights reserved.

Transcript

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0:00.0	This is exchanges at Goldman Sachs where we discuss developments currently shaping markets, industries, and the global economy.
0:15.0	I'm Jake Seward, global head of corporate communications here at the firm.
0:18.0	The health care industry is top of mind these days as it experiences business model shifts, technological breakthroughs, and the Trump administration drug pricing policies.
0:28.0	To talk through the changing landscape of health care, we're joined by Joe Natori.
0:32.0	Joe's been a partner in the firm's Consumer Retail and Health Care Group within the Investment Banking Division,
0:38.0	but she's taking on a new role, literally as we speak, leading global health care investing for our merchant bank.
0:44.8	Joe welcome to the program.
0:45.9	Thank you.
0:46.9	Let's start by talking about what's going on in the stock market.
0:49.5	Health care started the year off super strong, but has been a bit more volatile is this
0:54.2	being driven by sector-specific concerns or is it just attributed to the
0:58.4	broader sell-off we've seen in the markets? I think you when you look at the
1:02.0	health care industry from an operating standpoint the companies are still performing incredibly well
1:06.9	The margins the growth profile are probably the highest they've been in recent history so I think most people feel like some of the down draft is because of
1:16.5	macro issues. And if you look at the overall market, that's largely been the reaction, concerns
1:21.9	about inflation, interest rates.
1:25.0	I also think the blooms come off a little bit on the roads of tax reform.
1:29.8	You know, there was a lot of buzz around tax reform on what companies could do with those dollars and frankly
1:34.9	there just hasn't been a lot of activity.
1:37.2	And so investors are a little bit fatigued with that, so maybe some of that's coming out.
1:41.0	A lot of merger activity. Just value creating activity.
1:44.6	Yep. So whether it's merger, whether it's investments, even capital return has been
	...

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