Why the great pharma-MedTech divide is healthcare’s biggest miss

Despite the ubiquitous industry buzzwords—"patient-centricity," "precision medicine," and "integrated care"—a stubborn paradox persists at the heart of healthcare. On paper, we envision a future defined by a seamless ecosystem of therapies, diagnostics, and digital touchpoints. In practice, however, the industry remains siloed in a manner that feels decades behind our technological capabilities.

Most of the industry still behaves like it’s 2005.

Pharma operates in one lane, MedTech in another, and diagnostics often occupy a neglected middle ground, quietly determining patient eligibility without the strategic investment they deserve. This disconnect is more than a missed business opportunity; it is a systemic failure to deliver on the promise of modern medicine.

I think this is a problem not just for business but also for patients.

The uncomfortable truth: the molecule is no longer the product

The more I watch the healthcare landscape evolve, the more I believe this: the drug is no longer the whole product. The drug is one part of the product and the rest is diagnostics to identify the right patient, a workflow that gets the patient access quickly, a monitoring system to track responses, the data to prove value, and clinical infrastructure to enable adoption.

Because this critical infrastructure is the domain of MedTech and diagnostics—not pharma—treating these sectors as adjacent markets rather than mission-critical partners creates a fundamental gap in the patient journey.

Lessons from “collision” pioneers

While most companies maintain a safe distance, a few innovators have embraced strategic convergence.

Roche: the modern blueprint

The cleanest case study of pharma and diagnostics operating as one strategic engine is Roche. Instead of treating diagnostics as a side hustle, the company treated it as an advantage — a way to shape markets, guide therapy adoption, and accelerate R&D.

The acquisitions of Ventana, Foundation Medicine, and Flatiron weren’t random, they were a strategy to own the clinical map.

While competitors fight for share at the point of prescription, Roche invests in the systems that determine who reaches that decision point in the first place.

Abbott: diagnostics as the front door

Abbott has always been comfortable operating across devices and diagnostics — and now it’s going bigger. First, there was the acquisition of Alere, which expanded point-of-care diagnostic reach, but the bigger story is the announced $23 billion acquisition of Exact Sciences. This new acquisition is ambitious and makes it clear Abbott doesn’t view diagnostics as a supporting actor in oncology — it’s the front door.

The pursuit of platform strategies over simple device sales highlights a shift toward early detection as the primary driver of market growth.

J&J: the “platform acquirer” in MedTech

J&J is one of the few companies that has been structurally built for convergence. Its aggressive bets on robotics and cardiovascular intervention underscore a vital realization: in modern healthcare, the procedure is often the product.

It is at the procedural level where clinical outcomes and economic value truly intersect.

Why does the wall stay up?

If the benefits of convergence are so clear, why is the divide so persistent? The hurdles are structural and deeply ingrained in corporate DNA.

The most significant barrier is the divergence in "power centers." Pharma sells belief—navigating formularies and prescribing behaviors—while MedTech sells workflow, navigating the brutal realities of hospital procurement and supply chain logistics. Disrupting a clinical workflow is infinitely harder than changing a prescribing preference, and few pharma organizations are equipped for that battle.

1. They don’t sell to the same power center

Pharma sells belief—navigating formularies and prescribing behaviors—while MedTech sells workflow, navigating the brutal realities of hospital procurement and supply chain logistics.

Disrupting a clinical workflow is infinitely harder than changing a prescribing preference, and few pharma organizations are equipped for that battle.

2. Their margin physics are different — and leadership teams don’t like that

Pharma leadership is conditioned to chase the "pipeline math" of high-stakes approvals and blockbuster assets. MedTech, conversely, thrives on "platform math"—the iterative innovation, service models, and adoption support that yield steady, long-term value.

3. Integration is hard, and most organizations aren’t built for it

The truth is most pharma org charts are not designed to integrate MedTech.

This cultural friction is compounded by the fact that most pharma org charts are optimized for brand strategy rather than the high-touch, real-time troubleshooting required in a hospital environment.

When pharma buys MedTech, it often doesn’t know what it bought — or how to run it.

4. Many pharma companies still think they’re selling “a drug”

Pharma still thinks the product is the molecule, but in modern healthcare, the product is the outcome.

Today, outcomes are increasingly driven by:

• early detection
• correct patient selection
• adherence and monitoring
• clinical workflow enablement

That’s not a molecule. That’s a system.

Some companies ran away from convergence — and that’s instructive

Not every convergence story is a success story.

Strategic deconglomeration — simplifying around medicines — can be rational. Focus, clarity, and operational simplicity matter.

But separation is not inherently a strategy.

It’s often a default.

And in a world moving toward precision medicine, value-based care, and outcome-driven reimbursement, default strategies get punished.

If I were advising CEOs: three ways to “collide” without crashing

Not every convergence story is a success story, and strategic separation can be rational. But separation is often the default, not a strategy. In a world moving toward precision medicine, value-based care, and outcome-driven reimbursement, default strategies get punished.

Moving toward a connected ecosystem does not require a risky megamerger, but it does require a departure from default thinking. To bridge the gap, leaders should focus on three strategic shifts.

• Build a “companion ecosystem” strategy for top pipeline assets. Companies must move beyond the "check-the-box" companion diagnostic. A full ecosystem includes patient identification, testing infrastructure, turnaround time optimization, clinical decision support, and adherence and monitoring
• Create joint commercial pods (pharma + MedTech DNA). Hospitals are weary of managing 12 different vendors. They want a single partner who can deliver a therapy, a diagnostic, an integrated workflow and a value story.
• Stop treating data as a byproduct — treat it as a product. MedTech generates invaluable real-world data at the point of care. The companies that close the loop—connecting diagnosis to monitoring and subsequent optimization—will create an untouchable competitive flywheel.

The future belongs to systems not molecules

The next generation of healthcare leaders will not be defined by who has the most potent molecule but by who builds the most effective system of care. These systems do not exist solely within the confines of a lab or a device factory; they exist in the "collision" between the two.

The industry has spent years asking why pharma and MedTech don’t work together more closely. As we move further into the era of value-based care, the more urgent question is, how much longer can we afford to wait?