For more than a decade the underlying demand cycle of health care has been widely talked about and discussed by analysts and investors alike. Almost everyone I meet is now aware of the growing health-care requirements of an ageing population, and of the trend for emerging markets, as they become wealthier, to increase their health-care spending and raise patient expectations.
This multi-year cycle, which is set to underpin the sector for decades, is now so widely accepted that its importance appears to have been diminished by its obviousness. We believe this is a mistake.
While others may worry about the near-term impact of health-care reform, the growing costs or the paucity of new medicines, we take a longer-term perspective that values the resilience of this demand: we believe demand represents a real and underappreciated driver of new forms of health-care innovation.
We are already finding new businesses and business models that do not carry traditional health-care ‘baggage’ such as concerns about complexity and cost of access, but which are instead bringing fresh eyes and new ideas to solve old health-care problems. We look forward to discussing some of these ideas in future blog posts.
Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell investments in those countries or sectors. Please note that holdings and positioning are subject to change without notice.