The Strategic Necessity of Pharma-MedTech Convergence in an Era of Precision Medicine

Mike Hennessy Jr, chairman and CEO of MJH Life Sciences®

There’s a strange paradox in health care right now.

Health care executives discuss “patient-centricity,” “precision medicine,” and “better outcomes,” and the industry talks about integrated care pathways and real-world evidence (RWE) as if they are expected. We envision a future defined by a seamless ecosystem of therapies, diagnostics, and RWE.

However, the industry behaves as if it is still 2005.

The pharmaceutical and medical technology (MedTech) sectors continue to operate in silos, often utilizing disparate languages, regulatory frameworks, and commercial strategies. Diagnostics sits somewhere in the middle of these 2 sectors, deciding whom to treat.

Pharma and MedTech operate separately and rarely even speak the same language, which is a problem not only for business but also for patients.

“Precision Medicine” Is a Marketing Phrase Unless Diagnostics and Devices Are Part of the Strategy

As I have watched the health care landscape evolve, I believe the drug is no longer the whole product but instead is just one part of the product.

A drug’s value proposition is only as strong as:

• The diagnostic precision required to identify the appropriate patient subpopulation
• The clinical workflow that facilitates rapid initiation of treatment
• The remote monitoring that tracks longitudinal response and adherence
• The data that prove value to payers and systems
• The clinical infrastructure that enables frictionless adoption

Infrastructure comes from pharma, MedTech, and diagnostics together, but we treat MedTech and diagnostics like adjacent markets rather than mission-critical capabilities.

That’s where the opportunity—and the risk—begins.

Case Studies in Strategic Integration

While many organizations struggle with integration, certain market leaders provide a blueprint for successful convergence:

• Roche: By treating diagnostics as a core strategic engine rather than a subsidiary, Roche has successfully shaped markets. Its acquisitions of companies like Ventana, Foundation Medicine, and Flatiron Health represent a platform strategy that informs R&D and accelerates therapy adoption through data-driven insights. While other pharma companies spend billions fighting for share at the point of prescribing, Roche invested in the systems that influence who even shows up at the prescribing decision in the first place.
• Abbott: The acquisition of Alere expanded its point-of-care diagnostics reach, but the $23 billion acquisition of Exact Sciences made a more ambitious statement. Abbott believes diagnostics is the front door to oncology, with screening and early detection playing a huge role.
• Johnson & Johnson: The investment in MedTech—specifically in robotics and cardiovascular intervention—highlights an essential truth: In many high-acuity cases, the procedure is the product. And the procedure is where patient experience, clinical outcomes, and economic value all collide.

Barriers to Convergence: Sales Cycles and Margin Physics

If the benefits of integration are clear, why does the “collision” of these sectors remain rare? The barriers are largely structural:

1. Divergent power centers: Pharma typically targets prescribing behavior, payer access, formularies, and guidelines. MedTech, conversely, must navigate hospitals and integrated delivery networks, procurement committees, supply chain logistics, procedural economics, and service and training. Pharma sells belief, while MedTech sells workflow, which is much harder to disrupt.
2. Economic realities: Pharma leadership is often conditioned for the "high-risk, high-reward" physics of pipeline assets. MedTech operates on iterative innovation and service-heavy models. Bridging these 2 financial mindsets requires a shift from "pipeline math" to "platform math."
3. Organizational DNA: Pharma excels at brand strategy and evidence generation; MedTech excels at field execution and clinical troubleshooting. Integrating these cultures requires more than a merger; it requires a redesign of the field force.
4. Mistaking the product: The traditional thinking by pharma companies is that their product is the drug, but that’s not the case today. The product is now the outcome, and it’s driven by early detection, correct patient selection, adherence and monitoring, and clinical workflow enablement.

A Path Forward for Health Care Leadership

Not every convergence is successful, but separation is not inherently a strategy. As the world moves toward precision medicine, value-based care, and outcome-driven reimbursement, the default strategy of separation will get punished.

To move beyond default silos and toward intentional convergence, I suggest 3 strategic pivots for industry leaders:

• Develop “companion ecosystems“: Precision therapies should launch not just with a companion diagnostic but with a full support ecosystem, including patient identification tools and clinical decision support.
• Deploy joint commercial units: To reduce friction for health systems, organizations should pilot cross-functional teams capable of presenting a unified value story that encompasses the therapy, the device, and the workflow integration.
• Close the data loop: MedTech generates invaluable RWE at the point of care. The winners in this space will be those who use these data to create a “flywheel” effect: linking diagnosis to treatment to monitoring to outcomes to learning and, ultimately, to optimization.

The Winning Companies Will Have the Best Systems, Not the Best Drugs

The next generation of health care leaders will build businesses around systems of care, not individual products. As we move deeper into the era of value-based reimbursement, the industry can no longer afford to treat pharma and MedTech as separate entities. The most significant breakthroughs in patient outcomes will not happen in one lane or the other—they will happen at the collision.

The question isn’t “Why don’t pharma and MedTech work together?” The real question is “How long can we afford not to?”