Rajesh (Raj) Garg

“What I would actually predict is that the next couple of decades are going to really be an age of biology, and an age of technology and healthcare that will cause pretty fundamental shifts.” – Dr. Raj Garg

Raj Garg is a former CEO, McKinsey Senior Partner, healthcare attorney and physician. This background gives him a broad and deep perspective on nearly every corner of the health care industry. In particular, we were impressed in our conversation with Raj at his rare ability to integrate across subsectors of health care. His talents for insight and leadership have given him a unique point of view on how to deal with some of the great challenges in healthcare.

In February 2008, the secretary-general of the United Nations appointed Ray Chambers as the first special envoy for malaria. In the past 15 years, global awareness and funding for malaria have greatly increased, and UN figures show more than one billion mosquito nets have been distributed in sub-Saharan Africa, averting over 6.2 million malaria-related deaths, many of them of children. In the lead-in to World Malaria Day, on April 25, McKinsey’s Raj Garg spoke with Chambers about the ongoing… Show more

In February 2008, the secretary-general of the United Nations appointed Ray Chambers as the first special envoy for malaria. In the past 15 years, global awareness and funding for malaria have greatly increased, and UN figures show more than one billion mosquito nets have been distributed in sub-Saharan Africa, averting over 6.2 million malaria-related deaths, many of them of children. In the lead-in to World Malaria Day, on April 25, McKinsey’s Raj Garg spoke with Chambers about the ongoing fight against malaria. An edited transcript of their conversation follows. Show less

Academic medical centers (AMCs) have, his­torically, sat atop the provider pyramid. AMCs enjoy a distinguished brand that is associated with higher quality, diagnostic and therapeutic innovation, and the manage­ment of complex illnesses. AMCs typically attract and retain high ­caliber talent so that they can fulfill their tripartite mission: treatment, teaching, and research. They leverage their distinguished faculty and physicians, as well as their next­ generation equipment and other advanced… Show more

Academic medical centers (AMCs) have, his­torically, sat atop the provider pyramid. AMCs enjoy a distinguished brand that is associated with higher quality, diagnostic and therapeutic innovation, and the manage­ment of complex illnesses. AMCs typically attract and retain high ­caliber talent so that they can fulfill their tripartite mission: treatment, teaching, and research. They leverage their distinguished faculty and physicians, as well as their next­ generation equipment and other advanced technologies, to become the preferred providers within their communities. AMCs have solidified their premier position by their willingness to share new methodologies and to set practice patterns and standards across communities. They frequently serve as regional trauma centers, provide much of the indigent care in their com­munities, and are often affiliated with and staff the local Veterans Administration health centers. Historically, most AMCs have been able to main­tain small operating margins. Their net econom­ics results from their broad array of responsibili­ties. In part, their profit levels reflect their ability to focus on the high­ quality, comprehensive, and complex conditions. However, those levels also reflect the cross­-subsidization that has long characterized public versus private and paid versus indigent patient care. Evolution of the healthcare ecosystem, which reform has accelerated, is putting margins and more importantly the tripartite mission at risk. Furthermore, most AMCs are a part of larger institutions of higher education, and many of those institutions have a long tradition of using operating cash flows from health system opera­tions to fund academic pursuits. A few AMCs have recognized the danger ahead and have launched cost ­reduction programs to protect their mission and stabilize margins. What AMCs need instead is a more radical approach. Show less

Genetic technologies promise to transform the overall economics of developing and selling drugs. For companies in the pharmaceutical and biotechnology industries, the question isn't whether to invest but how soon. The strides now being made in genetic medicine presage a revolution in health care. Already, it is possible to determine a patient's susceptibility to certain hereditary diseases. Within a decade, genetic tests will indicate who will respond well to a drug, who will barely respond… Show more

Genetic technologies promise to transform the overall economics of developing and selling drugs. For companies in the pharmaceutical and biotechnology industries, the question isn't whether to invest but how soon. The strides now being made in genetic medicine presage a revolution in health care. Already, it is possible to determine a patient's susceptibility to certain hereditary diseases. Within a decade, genetic tests will indicate who will respond well to a drug, who will barely respond, and who will suffer adverse reactions. Physicians will then be able to tailor therapies to the needs of individual patients. Significant scientific and technical challenges remain, however. To date, scientists have identified the function and location of only a small fraction of the genes that define the human race. And every gene displays a number of variations-a phenomenon called polymorphism. Much more genetic data will thus have to be collected and deciphered before genetic medicine can reach its full potential. Moreover, testing patients to identify their genes is still a slow and expensive process that costs from $1,000 to $2,000 for each test, though a few simple tests for infectious diseases cost as little as $20: The cost of individualized drug therapy, too, is likely to be high. The scientific community has already witnessed tremendous breakthroughs in genetic medicine and expects the pace of new discoveries to increase exponentially in coming years. The time is ripe for pharmaceutical and biotechnology companies to consider the implications of these advances for their own businesses and to develop appropriate strategies, for the ability to tailor drugs to the genetic makeup of individual patients-known in the trade as pharmacogenomics-represents a watershed for the industry. Although the strategic implications of this breakthrough will certainly become more clear as the technology evolves, some are clear already. Show less

For the past quarter of a century, multinational pharmaceutical companies have shown limited interest in India. Protectionist policies introduced by the Indian government in 1970 hit profits hard, and companies have been further deterred by the lack of intellectual property rights. As a result, MNCs have just 30 percent of India's pharmaceutical market, compared with 80 percent 25 years ago . Yet the climate is changing. As part of government efforts to liberalize the economy, regulations… Show more

For the past quarter of a century, multinational pharmaceutical companies have shown limited interest in India. Protectionist policies introduced by the Indian government in 1970 hit profits hard, and companies have been further deterred by the lack of intellectual property rights. As a result, MNCs have just 30 percent of India's pharmaceutical market, compared with 80 percent 25 years ago . Yet the climate is changing. As part of government efforts to liberalize the economy, regulations governing the industry are being abolished or simplified, and price levels are rising. At the same time, increased personal spending, fuelled by economic growth and greater access to medical care, is helping to expand the market.

These changes make it an appropriate time for multinationals to reconsider India. Opportunities exist not only to expand market share rapidly in the country itself, but also to use it as a base for sourcing bulk actives and intermediates,(*) for sourcing formulations for export to other developing nations, and for research and development. Together, these four areas of opportunity could represent from $300 million to $800 million of net present value to a leading multinational. To capture this value, however, MNCs will have to consider fundamental strategic and operational changes, which in turn will require them to rethink traditional management policies and practices. Show less