Lazard Releases Global Healthcare Leaders Study

NEW YORK–(BUSINESS WIRE)– Lazard Ltd (NYSE:LAZ) today released an in-depth study of strategic
challenges and opportunities in the global healthcare industry,
surveying C-level executives and investors in the U.S. and Europe across
three sectors: Pharmaceuticals and Biotech; Medical Devices/Technology
and Diagnostics; and Healthcare Services.

The Global Healthcare Leaders Study revealed surprisingly strong
sentiment that the industry is being transformed by the development of
value-based care business models, which would displace traditional
fee-for-service pricing. These new business models are a response to the
intense pricing pressure that is challenging healthcare companies across
sectors and geographies.

“Healthcare business leaders told us that their single biggest challenge
is pricing pressure, and this is driving innovation, both in science and
in new business models,” said David Gluckman, Global Co-Head of Lazard’s
Healthcare Group. “They also expect to meet the challenges with greater
levels of M&A, partnerships and collaboration, including with
non-traditional competitors.”

“We’ve seen what business model disruption has done to other
industries,” said Peter Orszag, Global Co-Head of Lazard’s Healthcare
Group. “The rise of value-based care may prove to be the great
disrupting force in healthcare.”

The study offer a variety of insights, including the following selected
highlights:

• Non-traditional pricing models may transform healthcare more than
  science over the next decade: almost half (47%) of healthcare C-level
  executives cite the adoption of value-based or risk-sharing pricing
  models as transformative over the next 5-10 years, compared to 38% who
  cite scientific breakthroughs.
• The survey results suggest strongly that the move to value-based care
  in the U.S. will take place even under a new administration in
  Washington. Among U.S. healthcare executives surveyed after last
  year’s Presidential election, 55% said they expect the majority of
  U.S. healthcare payments will be value-based before 2020.
• Almost one-third of respondents in medical devices/tech/diagnostics
  and in healthcare services believe that non-traditional competitors
  will have a transformative impact on the industry in the next three to
  five years.
• Healthcare executives most frequently cited M&A, industry partnerships
  and collaborations, including with non-traditional competitors, as
  enabling the transformation of the industry over the next 5-10 years.
• More than half of respondents expected an increase in acquisitions of
  public companies over the next 18 months, and more than two-thirds
  expected an increase in private company acquisitions.

The Global Healthcare Leaders Study surveyed 213 C-level executives and
87 healthcare investors. C-level executives included CEOs, CFOs, and
senior executives involved in strategic decision-making. Respondents
were chosen to represent a statistically significant mix between the
U.S. (203); Europe (88); and Other Regions (9), except for the
Healthcare Services respondents, who were all U.S.-based. (Healthcare
Services in Europe and Other Regions were not surveyed because of the
idiosyncratic nature of national healthcare systems).

The Global Healthcare Leaders Study reflects Lazard’s approach to
long-term thought leadership, commitment to the sectors in which it
participates, and focus on intellectual differentiation. An executive
summary of the Study is posted at www.lazard.com/perspective.

Lazard’s Global Healthcare Group advises senior executives and boards of
directors on strategic M&A, corporate preparedness, capital advisory,
and other strategic and financial matters. The group is active in all
areas of the healthcare and life sciences industry, including
pharmaceuticals, biotechnology, healthcare services, and medical devices.

About Lazard

Lazard, one of the world’s preeminent financial advisory and asset
management firms, operates from 43 cities across 27 countries in North
America, Europe, Asia, Australia, Central and South America. With
origins dating to 1848, the firm provides advice on mergers and
acquisitions, strategic matters, restructuring and capital structure,
capital raising and corporate finance, as well as asset management
services to corporations, partnerships, institutions, governments and
individuals. For more information on Lazard, please visit www.lazard.com.
Follow Lazard at @Lazard.

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