Connor Link 1, Senior Editor

February 4, 2013

3 Min Read
Will CPGs drive the future of healthcare?

Soon the makers of bleach, detergent and plastic containers will be calling the shots in healthcare and telemedicine. Leading consumer packaged goods companies (CPGs)—Procter & Gamble, Clorox, Kimberly-Clark and Newell Rubbermaid, to name a few—have made some surprisingly prescient investments in the last few years, buying into new-wave healthcare companies, technologies and products.

Here’s Bloomberg:

Newell Rubbermaid Inc. (NWL) is making a push into telemedicine. Clorox Co. and Kimberly-Clark (KMB) Corp. are both angling to become go-to suppliers of disinfectants for hospitals. Procter & Gamble Co. operates a concierge medicine service for patients willing to pay as much as $1,800 a year.

Consumer-product companies have poured billions of dollars into innovation and are struggling to find growth in their traditional businesses so it makes sense to “bleed into something that’s scientific or health-and-wellness related” said Ali Dibadj, a Sanford C. Bernstein analyst.

Will CPGs drive the future of healthcare?Though a little incongruous (the jump from diapers to diagnostics is a big one), the investment trend makes perfect sense from a business standpoint—the Centers for Medicare and Medicaid Services anticipate that the “other medical products” category of services and equipment stand to grow 36 percent to $127 billion in the next five years. Moving from low-growth category (diapers) to high-growth category is simple business logic. But it also taps in nicely to the healthcare zeitgeist, as whispers of “personalized medicine” continue to circulate as a mantra in the medical and nutrition industries.

'Personalized medicine' market

A suite of technology and nutrition companies have begun to circle the personalized medicine market, a space that is still more pipe dream than reality. The seamless integration of genomics, diagnostics, medicine and nutrition on a personal and affordable level remains an ever-on-the-horizon opportunity, though there’s still money to be made in the interim.

Janica Lane, partner at San Francisco­–based investment bank Partnership Capital Growth Advisors, spoke to Nutrition Business Journal last year about a raft of investments in the emerging healthcare portal market:

I think it’s a growing trend. There’s Health Elements [from Thorne Research], an impressive platform from WellnessFX, and a number of high profile deals in the space—MDVIP bought by Procter & Gamble, ZocDoc raising growth capital, sharecare.com raising growth capital, HealthMedia going to Johnson & Johnson. There are also integrated monitoring packages that include fitness devices that track calories, activityand sleep with an online component. There is this whole wave of technology that is welcome both on a B2B and B2C level. It’s going to continue to evolve and be much more focused on reaching the everyday Joe.

P&G’s program is probably more high-end than Joe can afford—MDVIP offers services that reach up to $1,800 a year. And even WellnessFX—winner of NBJ’s 2012 Innovation Award—is still working out the right price. But as technological development permits, as more well-heeled CPGs enter the space, and as the implementation of the Patient Protection and Affordable Health Care Act pushes prevention over treatment, the democratization of personalized medicine inches ever closer.

The question is, though: Is America ready for Dr. P&G?

About the Author(s)

Connor Link 1

Senior Editor, New Hope Natural Media

 

Subscribe and receive the latest updates on trends, data, events and more.
Join 57,000+ members of the natural products community.

You May Also Like