Reimagining How We Innovate in Medtech, with Alex Gorsky and Rick Anderson | LSI USA '24

Roger Brooks  0:04  
So to honor to be here on stage with two of our rock stars from our industry, known, you know, not just for their their accomplishments, but their, their leadership, there isn't two people, you'll hear more kind words out there about their leadership and their ability to contribute. We're gonna start by having them give a introduction. And and then I want you to, as you listen is try to keep in mind, just the big picture and let your let your mind drift a little bit with our thoughts and ideas, on some new ways of thinking. One of the things that I learned about about Rick in is I placed him as a board member for a company that the founder was very good thinking big, he thought he was thinking big, but he wanted to pull in somebody, a seasoned board member. So he brought Rick a board. And he, about two years, three years, he drove a process the CEO did, where they drove an incredible exit, especially for the founder. And I asked him later, I said, how, what was the difference that Rick made by coming aboard? And he said, Roger, well, I thought we knew how to think big, and I thought we were thinking big, and tell Rick came aboard. He taught us how to really think big, he taught us how to think about the market differently. And I think that's what both Rick and Alex can deliver, as deliver some thoughts to elevate your game and allow you to think even bigger than what you've been thinking. So with that, why don't you guys give a introduction of yourselves and be great to hear Alex, what you've been doing for the last 18 months. And Rick Scott, one of the most unique business models out there, it'd be nice to have you touch on that as well.

Rick Anderson  2:12  
Good morning, thanks for joining us appreciate you getting up early. My name is Rick    Anderson. I'm chairman of Revival, Healthcare capital. We're a private equity firm, down in Austin, Texas, we get about $600 million of capital under management. We're focused solely on medical device and diagnostics. I've been in private equity for the last 16 years. And we've been pioneering, pioneering how to do innovation differently. And Alex and I will do our best to at least try to get you to think differently about the way that their traditional way that we all work together where, you know, we invest in a company and we chase strategics around meetings like this, to get them to spend some time with our companies. And hopefully, at some point, we run an auction and, and try to sell the company to him. So we're we're trying to think differently about the way that we do that. And that comes from, you know, having spent a decade at j&j with Alex and the team. They acquired our startup company, a company called synacor got j&j into the monoclonal antibody business, which was sort of the wild wild west back in the back in the early 2000s. And then I started my career back in 1988. Here in Irvine with Allergan, so I've been around forever. So a lot of I've made every mistake that, that you can make both as a strategic as well as an investor as well as an operator. So we've tried to apply those lessons over the last couple of decades, to how we might do things differently in med tech. So hopefully, you'll enjoy the session today we're going to, we're going to try to challenge the think that sort of conventional wisdom a little bit does get you to think a little bit broader about the way innovation is done in our space. So thank you very much.

Alex Gorsky  4:00  
Alex    Gorsky. And let me just start out by saying that Ted's just a real pleasure to be here with all of you, when my wife and I arrived last night, and pulled out and got out of the car, I must have tripped, in bumped into about 85 people between there and checking in. And, you know, it's, it's pretty darn special. When you have that moment, you're able to see people that you've seen for 2030 plus years across the industry, and be able to have those kinds of, you know, informal interactions and and just reconnect. So I always love being around people who are just committed to this area of innovation in healthcare, trying to help patients trying to create new business models. And so thank you, really for inviting me and us and having us here. It's also a real pleasure to be up here with Rick, Rick and I have known each other for probably 25 years and You know, kind of growing up together in Johnson and Johnson and then later seeing him take off and do just do some remarkable things. And now even in my next life, being able to connect with him and partner in certain ways, is, has certainly been pretty special. But look what I would say, just pick up on rec, I'm sure we'll have lots of things. To think about that. I consider myself incredibly fortunate, not only to have had the honor and the privilege of being at Johnson and Johnson for more than three decades, and the last 11, or 12, as CEO and chair, and to just be able to participate, witness and engage in such a wide array of sciences, research technologies, markets, and in to be able to touch patients, and let alone in start really new and interesting businesses. That being said, you know, as I've stepped out of that world and into my new world, where in addition that occasionally now getting more than 30 minutes with my wife, on any given weekend, I'm sitting on three, I think pretty remarkable boards, IBM, JPMorgan and apple. And, and so whether it's the financial side of things, the b2b side and seeing all things in terms of cybersecurity, AI, connectivity, new app, new apps, let alone the b2c side with Apple. And you know, just what are their business? Do you see where you're touching almost a couple of billion people every day familiar with your products, and really seeing this new world emerge at the nexus of healthcare and these new technologies? I think just has remarkable promise. And I guess my only regret is that, while the last 35 years have been very, very interesting, in seeing some of those shifts, I believe the next 10 years, we'll see that times 10. And, and so while you know, we'll address a lot of the challenges and a lot of the issues, I think the major thesis to take away is there's ever a time to be in healthcare to be thinking about innovation to be thinking about this nexus of new technologies, and the rigorous clinical regulatory, let alone commercial environment that we work in, you know, carpe diem, now's the time, but it is going to require us to think operate, and be different. And hopefully we can cover some of those topics during our discussion.

Roger Brooks  7:51  
That is, thanks, guys. So this is probably going to turn into a lot of banter between these two guys. But why don't we, what I'd like to do is kind of startup framing up the problems that we see the big picture problems with innovation. And then and then start unpacking some of the ideas you've had been floating around in your head about interesting, innovative solutions, that that go beyond AI can usually use these words one time. And so we've have a lot of Homebuilders here, all right, and the strategics, and the things that make difference or neighborhoods, so that they want neighborhoods, and we've got the home builders, and hopefully, some of these ideas will connect all those things together. So people see the neighborhood, right. So I'll let you guys take it from here and just maybe frame up the problems, that there's better solutions to

Alex Gorsky  8:51  
share a little look, I some of these will be no surprise to all of you. But you know, interesting in my world, a lot of obviously people ask me about what do you think about health care, just very strategically, very broadly. And, you know, isn't isn't a challenge that, you know, we're, you know, taking 20% of US GDP versus what's happening in other parts of the world. And in what are we going to do about that, and, you know, tend to listen and absorb and try to reflect I say, almost one thing I can guarantee you is over the next 10 years, that's going up. That sheer math. If you look at demographics, people over the age of 65, the explosion that's taking place here, but if you're in Japan, right now, almost 30% of the population was over the age of 65. In the US, it's gone from 17% to probably 25%. What happens when you turn 65, you start consuming about two to three to four times the amount of healthcare that you did earlier. And you combine that with all the new technologies that you're seeing. And I don't know what that number will be. Is it going to be 20% is going to be 23% is gonna be 25%. I think it will be higher and actually I think you can make a very compelling argument that that's not a bad thing for a very developed society to be investing in people to actually have an impact on private productivity, let alone quality of life long term. And by the way, globally, I think you're going to see those numbers go up in a significant way, particularly the developing world. I think that number two, we're just seeing an explosion of new technologies. I mean, there is not a field and I was blessed to j&j to be able to look across BioPharm, med tech, consumer tech, but even now, investing and looking across those different areas. There's not a day where, you know, imagine if we were in this room 10 years ago, how often would we use the word cure versus treat. And today, we're literally on the cusp of seeing that, because of our understanding of basic, you know, some of the fundamental biology, chemistry, physics, and structural issues that, you know, are leading to issues of mortality and morbidity in our ability to now go in and actually fix repair, turn off, turn on, or certainly adapt, we never had that kind of possibility. That being said, that doesn't just happen on its own. It requires a significant amount of investment requires a very significant ecosystem, and fundamental research of translational research, of clinical development, regulatory oversight, done in the right way, commercial infrastructure to actually make that work. And I think therein lies one of the biggest challenges, because you're going to see this demand increasing, you're going to see an explosion of new sciences and new technologies, where the bar is going to be higher because of the pressure in the system. And in the when I say the bar, the bar around reimbursement and clinical differentiation, but also the bar in terms of the costs required to develop them. And yet, at the same time, when you look at the potential, the outcome that we have with that it's quite significant.

Rick Anderson  12:14  
Just to add to Alex, your, your point. And I think that we're at that intersection between where technology, you know, meets the cost pressures of global health systems around the world, specifically, here in the US, just for every entrepreneur I've met this week, it's like, Rick, when is the fundraising market going to get better? When when when is capital going to start flowing again. And I think part of the challenge that we have as an industry is, to your point, Alex is like that pressure point. And for those of you get to sort of talk to hospital CEOs, I'm on the board of the Medical College of South Carolina and like, the CEO is a surgeon. He's an awesome guy, but the pressures that he feels, and the things that he's dealing with, with workforce demands, how they're going, how is technology going to enable those things, it's a totally different conversation is going on in the C suite of institutions. And you know, I want to sell them robots, and I want to sell them AR VR headsets and other things. And it's going to become more difficult at our customer level. And therefore, in strategics, can't just keep buying up technologies, and prices are getting higher, we're enforcing them, are we the industry want companies to be later, more patients more figured out reimbursement. So it creates an opportunity, but it's also a challenge of how you can fund extraordinary technology in a different way. And I think it's going to what's emerging from that ears are sort of strange bedfellow partners in the way that we sort of think about innovation. And I think we're at this beautiful time, I think, to Alex's point, where there's going to be a tipping point in the way that we do it, as compared to the traditional venture capital Series A, Series B, hopefully, you'll find somebody new Series C, you get a step up, etc, as compared to thinking more strategically about the neighborhoods that we're building. Because, at least in my experience, with talking to the strategics, they don't, they buy technologies, but they invest in neighborhoods, and they want to build great neighborhoods, and those that's more important, and how we go about that, I think is a real challenge. But it's also a tremendous opportunity, especially when you put in the context of like Alex's point about all the tech that's coming outside of healthcare that's going to come into healthcare over the next 10 years. And

Alex Gorsky  14:39  
you know, Rick, if I can just pick up on maybe one of those points. As I was preparing for the talk today. I thought, you know, why don't I reach out to a few of my colleagues I tried to speak with probably the CEOs about the top five healthcare systems, and the heads of BD for a number of the major strategics and do just said, you know, what are some of the messages into their point to your point? Imagine the pressure of your hospital CEO that you had been under, over the last two or three years, you've seen your, in many cases demand flattened or decline increase, certainly in variability and volatility because of COVID. You've seen your fundamental cost structures go up about 35%. And while it's tapered off, it's not going back to where it was, you've seen reimbursement change about one or 2%. And you he do the math on that. It just doesn't work. And, and so in terms of, they're also having to rethink, you know, how do we change the way we deliver care? How do we continue to improve quality? How do we obviously monitor the cost side? How do we utilize these new tools in ways to help us become more effective, more efficient, but it's a pretty tight box. That being said, to their credit, while all the CEOs would acknowledge that their very next point was, we've got to find ways to create new partnerships. Because we're not just going to save ourselves out of this. And it's only one, we can think about partnering in new creative ways. Particularly in areas where some of these new technologies are going to be adopted, about rethinking some of the classic business models that it's gonna be difficult. And we certainly don't underestimate the challenges associated with that. But I think their appetite, their willingness, and frankly, the realization, that it's going to be a necessity for them to do that, I think is higher than ever.

Roger Brooks  16:51  
So keep going with those thoughts, if you could, you know, what, I kind of sense there's a big disconnect between the payer system, the providers, and what we try to do in the medical device industry, and innovate, how can what your thoughts around how to how to bring our industry forward fast, to be more connected with the payer system and the providers so that we, the energy of this room, the energy of the industry, is out there solving more big problems? Instead of just trying to get reimbursed?

Rick Anderson  17:27  
I'll, I'll do my best to try to answer that. And I don't know if I know the answer, I would just say that I think the world that we're living in today, there's transformational, transformational technology development going on. And I think there's gonna be plenty of money for that over time. Unfortunately, the majority of the innovation that we do in medical device, and diagnostics is incremental, it always has been. And we, we've made a lot of money as an industry by being the fifth pedicle screw, you know, delivered to spine, I just think the market is going to bifurcate, into truly transformational enabling technology, that smart, delivers incredible patient benefit, but also has an economic, you know, storyline to it, that payers will, are already embracing that. And if you look, you can start to look at categories where where the money is moving around within reimbursement, because there's just it's a fixed sum of money, Alex point is going to go up. But I think we're gonna see, you know, more transformational technologies, you know, come into the marketplace. And I think we're going to struggle with the incremental things that we historically, it really spent the time on, to sort of build our business. That's not to say that's a bad business to be in, I just think that if we're going to work on transformational things, as an industry, we're going to have transformational business models to support that, because there's just not enough money in the system, I think, to fund both, you know, game changing, you know, up Thalmic robotic programs that are going to change the way we can treat people around the world, you know, with cataracts, as compared to, you know, a doc been able to do it, there's not enough physicians on the world that to care for the patients that Alex talked about demographically, technology is going to be an enabling solution for that. But that's going to take a lot of people, you have to write really large checks for that. And then on the backside, payers will have had to come to pay for that. So it's to me, it's, it's going to require business model innovation, we can talk about some of those things. But I think it's a challenge, but it's also a huge opportunity. We may see it bifurcate between transformational technologies, and sort of incremental things.

Roger Brooks  19:45  
Well, so keep going with that about what you try to do with revival about on how you bring innovation forward and you drive the partnership first, right.

Rick Anderson  19:58  
Yeah, I'm happy to Talk about it. So it's a different way to think about for transformational technologies is sort of a transformational relationship with additional buyers in our space. So when I sit with Alex's old team, or Edwards team or Boston Scientific steam, they all know the neighborhoods that they want to be in, in the future. And they're tracking, those sort of companies are tracking those technologies. They're tracking that those emerging markets, because they're very good at talking to thought leaders strategic, you know, relationships with those folks and customers. And the traditional model is where we investors, our CEOs are pitching you those strategics. We're trying to get our series B done, can we talk JJ DC and best make 10 $10 million in this round, maybe they'll pay by us someday in the future. That's the traditional model. What I've learned over the last few years has been, there are alternative ways to do that. Let me just give you some of the benefits of thinking differently. If you're a CEO, and in this room, you're going to spend 40 to 50% of your time, away from your teams raising money. That's just the job of CEO. And it's a big lift. Imagine a world where you and your investors knew that five years from now you know what your exit is. And you never have to raise money during the next five years, you're just driving your company to success for transformational technology development, it takes that sort of focus and that sort of effort to bring that to the market more efficiently, more effectively, than the traditional way that we do it today. There's emerging partnerships between strategics and investors, where investors put the money in for the next five years, in a thoughtful way, you know, where the, with a pre negotiated exit. And, and at the end of the day, some people call it bill to buys different people call it different ways. I would just say to you that, you know, we we as an industry have sort of fooled around with that for a long time of structured deals and option agreements and all that sort of stuff. That's not what I'm talking about. I think there's an opportunity for the big strategics that are the natural acquirers of our technologies, that when they had picked a neighborhood, you know, that neighborhood to be developed, you know, there are properties that they want to go out and talk to, you know, as compared to like competing for those five years from now. And us slogging through that five years, would it not be better to partner earlier, you know, using private capital, plus the strategic capabilities, plus the entrepreneurial spirit in the operating tempo of a startup company. If you think about that for a second, that's different than the way that we've done it in the past. It's also a different financing model with some, but to Alex's point, some of these transformational technologies take 300 million $400 million of investment, to get them to a place to where when the big code takes them, they can scale those businesses globally, and that we haven't been able to do that as an industry. And I think there's a real opportunity to rethink that.

Alex Gorsky  23:22  
And look, maybe just to pick up on a few of Rick's comments. You know, I was talking earlier about the challenge that you have, if certainly you're on the provider side right now. But having sat in that chair, running one of the large strategics, let's talk about the challenges that they face. So it's a pretty hot seat. And don't get me wrong, it's a very special place to be able to sit. But it's not quite what you think. And it's not for the faint of heart is I would say. But if you if you look at them, there's such a premium on growth right now. And is they're looking at their portfolio is they're looking at their five year plan. And their projections. They they're balancing a p&l where they've got massive commitments internally and externally already made. They've got a balance sheet that they're trying to navigate at the same time in a world where, frankly, large m&a is quite challenged, in certain cases, even small m&a, and that's a whole other discussion we can have, that I'm quite concerned about. And and so you start thinking about the levers that they have to pull to speed up innovation, in terms of what are they investing in their own research and development? What again, how can they you how can they go externally? What kind of guardrails are now going to be placed on that? What are the expectations that the street has that they're trying to navigate at the same time, let alone What's happening in the competitive environment and with their customers? That's why, you know, to Rick's point, I think more and more, they're also trying to understand how do I do this differently? And not just think, is it? Do I up my internal r&d by X percent? Or do I simply put my balance sheet to work in a fairly traditional manner, but are there other ways that we can collaborate that we can partner to help me achieve that goal, knowing in particularly in particular, that some of these new technologies are no longer just a 25 million $30 million program, but it's a three $400 million commitment over the next five years. And remember, you know, there's, there's clearly the technology side of it, there's the financial side, but it's also personal, you've got people inside that have committed their lives, their careers, to building out certain platforms. And sometimes it does become binary, it's, you know, it's either we're going to fund this, or we're going to fund that. And so coming up with different kinds of partnerships to say, Hey, how can we just not make this, you know, a Choice of this or that, but how can we do this in that in in a way that, you know, addresses my the concerns that I just mentioned to you, but also gives you the possibility, you know, of an appropriate outcome. And that same timeline, I think that the environment is ripe for that. And frankly, every BD head that I've talked to, would say, those are the kinds of things I'd like to talk more about. Now, one other thing that I might add there, because let's pick up on the house building the neighborhood analogy, or the metaphor, because I think what's interesting is not only do they want to have a good foundation, not only do they want to be in good neighbor hoods, but they want good neighbors. There's all that other stuff can be right. But if that bad neighbor moves in next door, it's really tough. You know, it sucks. And, and that's the other piece of feedback that I got is that the quality of the partner is so important, and frankly, can sometimes supersede just the dollar signs. It's what do you bring to the party? Are you going to add value in other ways that are ultimately going to help accelerate our team? Does my team who's not going to be partnering with your team, perhaps in a different way? Do they trust you? Or is it a constant back and forth negotiation? On each and every decision? Or are we actually collaborating, both have skin in the game with clear milestones that we're working together, again, in a very collaborative way trying to achieve? Those are the kinds of partnerships more than ever, you know, we're in, in, frankly, where we both win, or perhaps we don't, but we will have learned a lot through that in partnership. And so I think that's another really important element that if I was sitting with all of you thinking, okay, you know, what, what is the management of those companies trying to deal with? And then how, you know, what are some, again, new, creative, innovative ways of trying to address those?

Rick Anderson  28:17  
Can I just pick up on that, Alex? I mean, I think that there's a capability question, that Alex's pull on that thread, that human beings that are going to work in, if you think about entrepreneurs that are in this room, that run companies, you got to be a little bit nuts to like, survive, just, you just got to be a little bit crazy to do that. You're operating tempos higher, you figure out how to work with and without a net, you don't have the capital that you need to get things done, you can't hire the level of talent that you really need to sort of get there. That's a fact, in these sort of advanced partnerships, that Alex is talking about the capabilities, the capabilities will come because the money will be there. The mindset, though, is one of a master collaborator, as compared, this still has all the benefit of the entrepreneur. So the CEO of a small company that wants to be as part of a build by sort of, you know, relationship with a j&j or Medtronic, or whoever, you know, their task are different. They still gotta drive their agenda. But they're doing that, because they know we're building a company, building a company building a technology, building a healthy market, that we're going to put into their bag five years from now, that takes an entire different thought model, and how you show up to be able to do that. And it also takes patient capital to do that as well. And the people that are around your table, that your board level, you know, have a mix of operating experience and financial experiencing sort of help you and enable that to happen. I'll give you an example. When I was at j&j About a year Here's a company's when I was a cup of Chairman, and each one of those companies normally cost me 10 million a year for three years. So $30 million, just to get the technology that I bought in my quality system. In my design history files, it was always a redo, always, that's real money coming out of my p&l. If we can do all of that work and startup mode that we're not, we're never going to build j&j is quality system. But if you can build it on the two befores, of j&j is quality system, and reduce that $30 million dollars, when they acquire it, it just takes the friction out of the system. Now that's different than the way we do it today is a small quo, we're running as fast as we can as lean as we can. And we and we got to be able to get our product approved or get it in the market, or complete a clinical trial or get reimbursement. So we're doing whatever the trade offs we have to make. In the build of AI model. It takes capabilities and the management team mindset, it takes capabilities at the board level, that have operating chops to be helpful to be able to do that. And it takes, you know, the ability to sort of write fairly large checks to Alex's point, some of these programs are three or $400 million. But and that's probably going to be reserved for the more transformational technologies in the marketplace. So if you're a CEO, working on transformational technology, and a brand new category, which could be a huge market potential for strategic, there's plenty of interest, that at least my experience, been plenty of interest to have conversations with you about both funding your company, as well as how you manage your company in the future.

Alex Gorsky  31:43  
You know, I'd like to pick up on whatever its comments there. And that is, it's a bit of a challenge. And in the spirit of being a bit provocative, and also encouraging all of you to think when we're talking partnerships. Okay, what is it on the customer side? And the payer side? What is it on the strategic side? How do we do it? I would also challenge you on the technology side. And what I mean by that is some of these new technologies, whether it's cloud, whether it's connectivity, whether it's obviously AI on the ML side, whether it's sensing, whether it's how do we incorporate new imaging, I would submit are going to be fundamental to breakthroughs and BioPharm and med tech, in a very important way over the next 10 years. And if all of us in the room, you and your companies aren't thinking about how do I build those skills? How do I build those capabilities, beyond what has traditionally been just the medtech or the BioPharm world, you may be have a nice little runway of about three years, like guarantee and 10 years, it's going to change dramatically. And, and I think there is huge opportunity, yet there, there's a lot of work that needs to be done to get these different parties in the room, you know, so for example, about a little over a year ago, I had a chance is over a great bottle of red. I was with somebody from the technology side. And one of the things we were talking about how if you look at the traditional Silicon Valley Technology, then you think healthcare, and med tech or BioPharm technology that we speak different languages. And then on one side, there were tended to be this, we can solve it, we can either do the technology, we can do the app, and we're going to come in and we can do it, you know, pretty quickly. And, and that's looking far past a lot of the clinical regulatory quality and the other issues, then on the other side of the table. I daresay there's those that could be set or a bit dogmatic or kind of clastic, where we say, well, you just don't understand our world unless you do this unless you do that. And we actually had a dinner where we brought together a lot of the names that you read about I'm not going to point anybody out. But trust me, there were some of the best minds in AI. We had people from research and development from probably the top four or five, med tech as well as pharma companies. We had people formerly of the FDA, inside the agency and just trying to have this conversation. And I think that conversation is going to be taking place a lot more going forward. And to me, it's not a matter of if those two worlds are going to come together it was going to be how they do that. And I think developing the right kind of capabilities, the right kind of tools, the right kinds of partnerships with those companies, so that we can harmonize and again collaborate in the right way. We'll have a has significant impact, frankly, on the kind of, you know, future that we can envision for patients healthcare systems in bringing these things together and pretty exciting ways.

Roger Brooks  35:14  
So, maybe keep going a bit with that. These are what I, two of two of our brightest minds, big thinkers. What do you think when you think out 10 years? What's it look like? What are the major differences in the medical device industry, or maybe just major differences in our healthcare system? Granted that we're going to spend more more, greater percentage of our GDP is decided on health care, which I think your great point is, it's okay. It's okay, if we spend more money on health care. But elaborate a bit on on that? How do you how do you see that 10 years out?

Alex Gorsky  35:59  
You want to? Okay, looks so a few things. You know, I mentioned earlier, I do think it will go up. But I think there will be extraordinary pressure on the system. I mean, none of us in here. Well, there's probably a few few of us that, remember high interest rate environments. I remember, I think when my wife and I bought our first home, we started 12, seven with a lock at about 18. Five. And so when I hear people complaining about interest rates, they get I got put your pants up, you know, you get ready. But clearly, for the last 10 years or so, you know, access to capital hasn't been an issue. Globalization has been a key theme. We haven't lived. I mean, at a more macro level, frankly, the geopolitical environment, I think we're going to see that which will infect our industry, by the way. Because if you think about where we source a lot of things, and that's a whole other stream that we could talk about. And look, I'm somebody that believes the US and China must find a way to live to work together in the long run. But I think the nature of that relationship is change has changed. And it won't be just the same way that it was over the past 10 years. And I even think in a post Govan where there will be a more of a regional alliance. And there, I do think business can play a very important role of being glue for that. But as a whole topic, I think there'll be a lot of pressure, it's certainly my hope that we keep a market based system moving forward, because I think that's the best source of innovation. But don't underestimate the threats that exist out there for this kind of system. And if we, as an industry, don't focus on one, not only getting great technology that can extend lives, that can improve the quality of life and go out, but also in ensuring people can get access. In a broad way here in the United States, there will be countervailing political forces that could fundamentally change the way that our ecosystem works. Do not underestimate that threat. So I think it's really incumbent upon us to do that. And then third, I think we we have to realize that we are going to have to employ these tools to make our systems more efficient, and more effective, you know, the Rick's earlier point, the days of coming out and saying, Well, my device, or my product is 4% difference, but I'm gonna charge 25% More for, it's not going to work. And, and I think if I look 10 years from now, the companies that are going to do really well are those that innovate. And again, I think we've got tremendous potential, but it's got to, it's got to move from the incremental and, and that's always a tough discussion, even inside a company because in healthcare, when you hit when you swing for the fences, we know that there's an inherent risk in that. And what happens in this industry, so often as you go from A to B, from B to C, from C to D, then the next thing you know, over 10 years, you've gone from A to G. And if you've tried to gone from A to G right out of the blocks, it's extraordinarily difficult. And so I think getting that piece of it right, is also going to, you know, to be critically important, and then look, I think the other aspect that we'll have to change is how do our commercial models keep up with the technology and the science and the innovation models? Because, you know, if we now let's just say in BioPharm, create very more bespoke approaches, more personalized approaches, the current reimbursement system won't work if we're only going to go after and treat, you know, a few 1000 patients versus hundreds of 1000s of patients. And, and I would dare say if, as we try to democratize med tech and the accessibility, we're gonna have to again think differently about those models. And I don't underestimate the challenge associated because everybody's got an ox is going to they're going to feel is going to be gored in between. But you know, we're going to need as much innovation as Out of the box thinking, and, you know, different approaches there as well.

Roger Brooks  40:04  
Thanks, Alex. So we are, we are out of time. But Rick, why don't you just close it out with some visionary thoughts about what you see, what do you see ahead?

Rick Anderson  40:16  
I can't really guarantee any visionary thoughts. But let me just, I want to punch up what Alex just said. So stand out 10 years from now and look back to where we are today. So I will, I'll give you the world, according to Rick will have different sites of care where patients will be treated. And that will all be enabled by by technology, and it probably will not come from the med tech industry. In other words, how do we treat people, whether it be smart, whether it be for workforce development, those kinds of things, you're preventing, like we moved from health care, to keep, you know, people wellness to keep them out of the system? And how do we do that the box called a hospital is going to be more challenged than ever. So different alternative sites of care. I think secondarily, enabling tech will become the, but will become the focus of med tech 10 years from now as compared to hardware implants, all that stuff. So if you're working on a dumb quote, unquote, dumb device, that's not communicating that you plan to bring the market 10 years from now, you're probably going to have a difficult slog. So I would just say that like the the future, I think that I'm excited about it, because we've got this convergence, like we've never seen before, on the technology side. That has nothing to do with healthcare, with a different operating model, different tempo, etc. Coupled with extraordinary, you know, powerhouse, big healthcare companies that are dying to get into new neighborhoods, but they're also very aware of how their customer health systems pressures are under the how that's changing. We should be enablers of that we should not try to fight it, we should lean into it. But let's bring the technology to marketplace, but it's going to require entrepreneurs, investors strategics that think differently about the way that we enable the next generation of healthcare.

Roger Brooks  42:12  
All right. Thank you guys, so very much. Appreciate it.

Alex Gorsky  42:16  
Thank you, everybody. Thanks, everyone.