INSIGHT
June 2023
Read time: 3 min
On October 16, global law firm McDermott Will & Schulte showcased its premier series for healthcare dealmakers in the heart of New York City.
Held at The Glasshouse, Healthcare Private Equity (HPE) NYC 2025 brought together hundreds of industry players for a dynamic series of engaging panels and networking opportunities. Sessions offered insights and forward-looking perspectives on various topics, including the current state of the market, the increasing role of AI in healthcare, and healthcare industry opportunities.
McKinsey & Company, the official knowledge partner of HPE NYC, shared an analysis of emerging trends across the industry at the event. Here, McKinsey and McDermott Will & Schulte share some of the takeaways from the event.
Market activity. Participants expressed mixed-optimism at HPE NYC. Forty-six percent of attendees polled believed deal activity would be “about the same” over the next 12 months, while 42% believed it will improve. Panelists leaned more optimistic as they pointed to growing market activity over the last year and an increase in the deal pipeline through 2025.
Obstacles to healthcare PE transactions. Both panelists and attendees identified the lingering buyer-seller valuation gap as a major barrier facing Healthcare PE investors; 55% of attendees pointed to that valuation disconnect as the biggest challenge to successful deal executions. According to panelists, the gap is more pronounced in sectors where the lack of recent trades has made it particularly difficult for buyers and sellers to agree on valuations.
Pharmaceuticals. Panelists addressed concerns over margin erosion and possible disruptions to pharmaceutical accessibility. The pharmaceutical industry is adjusting to potential changes in patient access to drugs, including a push to direct-to-consumer channels. That movement has begun and continues to trend.
Poll of HPE NYC 2025 attendees
Emergence of AI in the healthcare space
Change management is key. Panelists emphasized the need for a strategic approach to AI. Technology alone is insufficient; leadership buy-in and acumen at portfolio companies is essential for AI to positively impact the healthcare industry. The overall sentiment was that companies must be ready and capable of integrating and adopting AI tools to ensure effective adaptation.
Seeing efficiency gains. AI is still in the early stages of adoption through most of the industry. Gains are mostly seen today in the back office, but the pressure on healthcare businesses to improve patient outcomes and lower costs will lead to more use of technology and AI in the future.
Clinical applications. As of now, panelists noted limited applications for AI in clinical settings. At least one panelist, however, noted that we are starting to see early use in some specialties, highlighting how some studies have shown the potential of AI in detecting pre-cancerous legions in digital dermoscopic images, for example.
Poll of HPE NYC 2025 attendees
HPE NYC 2025’s lively and thought-provoking discussions provided a variety of perspectives on the state of healthcare private equity along with insightful approaches to potential investments.
As always, we look forward to continuing the dialogue with our clients and partners. Please reach out to explore any of these themes further.
