Healthcare in the United States is a trillion-dollar business. Its vast complexity and breadth of scope has fascinated many business leaders, entrepreneurs and investors. Over 15% of students at HBS have some type of work experience in healthcare, including biotechnology, health services, medical devices and pharmaceuticals. Another significant number of students have had exposure to healthcare through venture capital and private equity as well.
However there is a substantial contingent of people at HBS who have had minimal exposure to the healthcare industry but would like to find out more about it due to its size and scope. Roughly 14% of the American economy, the market for health products is truly huge. Medical devices alone are estimated to be a market of over $140 billion. In addition to its vast size, the healthcare industry is undergoing an incredible amount of change. Power is shifting from providers to payers to patients. The complexity of managed care has allowed for the emergence of fascinating new entities such as disease management companies and focused factories.
An excellent way for HBS students to get find out about the healthcare industry is to do a summer internship. Based on discussions with current students, we have compiled a basic guide to organizing an approach to spending a summer in the rewarding field of healthcare. By no means exhaustive, we will broadly describe the categories of summer employment.
Pharmaceuticals. The pharmaceutical sector has historically been among the most profitable in any field over the past four decades. Return on equity is over 20% for the sector and profit margins on drugs are typically tremendous. Of course the fixed costs and research and development costs to produce medications are huge, and the time from identification of a compound to bringing it to market can be up to 12 years. However, most pharmaceutical companies are flush with cash that they re-invest in finding new materials. HBS students have had a long history of entering pharma and rising to the top of the field. Indeed, the current CEO of Merck is a graduate of HBS.
Pharmaceutical companies popular with HBS students include Novartis, Merck and Pfizer. These firms typically offer opportunities in the marketing department. Pfizer is based in New York City and has hosted students to learn about the subtleties of market management while enjoying the excitement of the city. Merck is located in New Jersey and is very interested in hiring HBS students. Both Merck and Pfizer are renowned for their marketing capabilities. Eli Lilly is based in Indianapolis. Lilly has been a strong supporter of HBS students and several career paths have sprouted from summer experiences at the company. Cecilia Gonzalo spent her summer there this year.
Medical Devices. A field that is dominated by several large companies, yet has thousands of smaller firms surviving is medical devices. This industry is predicted to grow to over $200 billion in the next decade. Minneapolis-based Medtronic dominates the field. Bill George, the dynamic CEO of Medtronic is an HBS graduate and has won awards such as “best manager” and “most ethical company.” The company has summer internships available in Minnesota as well as California. Guidant is a spin-off of Eli Lilly that has grown extremely rapidly in the 1990s. Guidant is based in Indianapolis and has branches in California. HBS students spent the summer in the companies west coast offices and had great experiences working with top executives.
Biotechnology. A host of biotech companies have connections to HBS. On the west coast, Genentech is one of the oldest and most successful biotechs. Others include Affymetrics and Amgen. In Boston, some key companies are Millennium, Genzyme, Biogen and ImmunoGen. Some of the other stronger biotech companies are Immunex, Cephalon, and Vertex. Mary Lynch spent her summer internship working in the biotech sector this year.
Consulting. Many HBS students enter the healthcare field through work in consulting. The big players such as McKinsey, Bain and BCG all have significant healthcare practices. McKinsey’s focus is on pharmaceuticals, and its New Jersey office heads up the practice. Several HBS students had rewarding summer internships with McKinsey working on pharma projects. Interns at Bain also had their share of healthcare work, possibly focused on smaller companies and those in the start-up phase. BCG has a well-know healthcare practice that has strong relationships with several of the Boston area hospitals. Smaller, boutique consulting firms that have a larger percentage of healthcare clients are Vertex Partners, The Advisory Board, The Wilkerson Group and CSC Healthcare.