World's Richest Surgeon-turned-entrepreneur Patrick Soon-Shiong to address at Pharmaleaders 2014 Summit
7th Annual Pharmaceutical Leadership Summit & Pharmaleaders Business Leadership Awards 2014
India’s only dedicated celebration of excellence in healthcare innovation, pharmaceutical & medical excellence and brand transformation.
Friday, 26th December, Hotel Sahara Star, Mumbai, India
THEME
“Empowering India’s Developing Healthcare System”
Investing the Healthcare Solutions of Tomorrow in uncertain & difficult Times
- Net Worth $12.1 Billion
- $7.3 M | 0.1% Age 62
- Source Of Wealth pharmaceuticals, Self Made
- Residence Los Angeles, CA
- Citizenship United States
- Marital Status Married
- Children 2
Surgeon-turned-entrepreneur Patrick Soon-Shiong had already sold two successful businesses for $8.5 billion before starting his most ambitious project yet, Nantworks. The company aims to revolutionize medicine by adding big data to patient care. He believes that if doctors have the most updated and complete information about their patients, they’ll make more informed treatment decisions. At Nantworks’ core is a 12,000-mile fiber data network and algorithms that, among other things, can analyze the data contained in a human genome in 47 seconds. An increased valuation of Nantworks through additional investment rounds has pushed Soon-Shiong’s fortune up by a third since September 2013. In addition to Nantworks, Soon-Shiong is developing two cancer drugs. The son of a village doctor in China, his family moved to South Africa during World War II. He graduated high school by 16 and became a doctor at 23. He made a name for himself in the 1980s as a transplant surgeon, then developed the cancer drug Abraxane. He also started two drug companies, American Pharmaceutical Partners and Abraxis, before selling both for a major pay day. As a member of the Buffett-Gates Giving Pledge, he plans to give away at least half his fortune. His donations include $5 million to the University of Chicago to develop technology to improve patient care and $136 million to St. John’s Health Center in Santa Monica, CA.
There is a bewildering array of drugs, and combinations of drugs, that may shrink the tumor and prolong your life. Or they could make matters worse and give you terrible side effects.
In the past, this decision was mostly a crude guess, and it was often wrong.
No longer.
Now, your doctor draws blood and tissue, sends the information to a medical Big Data center that, in seconds, sequences your entire genome and, more importantly, maps how the proteins and the cells in your body are translating your specific DNA mutation into tumor cells. Your doctor then accesses a secure global “bank” of cancer DNA and tissue, and develops an individual cocktail for you, administering it with precise nanotechnology. You recover at home, monitored by high-information devices connected through transmitters to your doctor and clinic.
This is a glimpse of the future that Dr. Patrick Soon-Shiong of Los Angeles has spent a decade imagining — and is now rapidly assembling. The technology and science are all at hand, he says. It’s “just” a matter of putting them together into a logical and humane whole.
“We now can create a pathway to fight cancer to a standstill,” Soon-Shiong tells me in an interview here. “Not to cure it, per se, but to make it a survivable feature of the human condition.”
While he is focusing on cancer — his specialty — his basic idea is at once profound and simple: to map the molecular life of all of mankind in the service of better health for each individual. Linking research, treatment and careful monitoring is also the only way to control costs and create accountability in medical care, he says.
The question is whether his approach is practical, or even possible. Soon-Shiong is out to prove that it is — and that it is, in fact, the only way forward.
While the most powerful man in Washington struggles to expand health insurance, the richest man in Los Angeles is methodically constructing a far more fundamental medical effort: a digitally enabled, science-driven, personalized health care system.
With Washington distracted by the insurance issue — and with federal science and tech research hampered by “sequester” budget cuts — privately funded efforts such as Soon-Shiong’s are all the more crucial.
President Barack Obama and Dr. Soon-Shiong share certain affinities, including vaulting ambition, a multicultural background, a knack for systematic thinking and an obsession with basketball.
But while Obama grapples with health care from the outside-in –- from government and politics –- Soon-Shiong works literally from the inside-out, guided by his own knowledge of everything from the molecular structure of cancer to the balance sheets of hospitals and the computing and fiber-optic requirements of Big Data.
In a secure warren of office suites on the west side of Los Angeles, the surgeon-turned-drug-magnate-turned-entrepreneur has laid out his health care vision in a series of floor-to-ceiling flowcharts.
The proprietary charts, and the money and medical experience behind them, are the road map that Soon-Shiong has refined over a decade on his way to courtside Lakers seats and a net worth of $7 billion from the drug companies and patents he’s sold.
Known in-house as “The Rocket Ship,” the mostly privately funded project aims to link supercomputers, super-fast data networks; personal monitoring devices; wired hospitals, clinics and phones; nanotechnology; and genome and molecular “proteomic” sampling into a system that can provide individually tailored wellness care and cancer therapy at affordable prices.
So far, Soon-Shiong tells me, he has poured $800 million into 60 companies, university research programs and his own “do tanks” -– all under the aegis of a company he calls Nantworks, in honor of the nanotechnology he used to create a breakthrough cancer drug.
The son of Chinese émigrés who originally settled in South Africa, Soon-Shiong isn’t the first corporate buccaneer to have had such a vision, nor is he the only one now. The founders of Netscape and AOL were early movers, and now everyone from drug companies to telecommunications giants want in on the action. Universities, seeking both pure research triumphs and business for their hospitals, are working hard on pieces of the system, too.
After all, health care is one-sixth of the economy, and the Baby Boom is aging fast.
But, at a youthful 61, Soon-Shiong may have the right combination of polymathic mind, medical experience, research chops, financial resources, ego and salesmanship to get his comprehensive “Rocket Ship” off the ground before anyone else.
Indeed, parts of the flowcharts have come to life. They include a supercomputing facility in Arizona for rapidly sequencing entire human genomes; a national high-speed network called National LambdaRail; a research “bank” with tissue samples and sequenced genomes of cancer patients; a company that produces low-power medical monitors for easy home use; another that produces sophisticated body monitors; and research affiliations with hospitals, clinics and cancer-care centers nationwide. He also has deals with AT&T, Verizon and Vodafone.
Just last week, Soon-Shiong struck a deal with government officials in London to provide data processing services to the U.K.’s DNA data bank.
“In the past, the scientific, technological and digital pieces did not in exist to assemble the whole,” Soon-Shiong says. “Now they do. I like to look for patterns, in science and life. It’s what I do.” Only an interconnected, instantaneous, molecule-to-manufacturer managed care system can tap science and save money, he insists.
Studying Soon-Shiong’s flowcharts recently, a potential tech vendor marveled at what, at first glance, seemed like the work of a NASA programmer and a physics professor who stayed up too late one night.
“Looks like you’re trying to boil the ocean here,” the vendor said, using a dismissive engineering phrase for an answer too large for the problem.
“Let me correct you,” Soon-Shiong replied in his stately South African accent. “I am boiling the ocean.”
If anyone can boil the ocean, it might be Soon-Shiong, says Dr. Eric Topol, author ofThe Creative Destruction of Medicine and the director of the Scripps Translational Science Institute in La Jolla, Calif.
“His sense of hypomania as he pursues this can be overwhelming,” says Topol, who has no ties to any of Soon-Shiong’s Nantworks projects. “But he has had a career of purposeful activity so far, to be sure. I am very supportive of the concept he is pursuing. I hope he can do it, and maybe he is the kind of guy who can do it.”
Soon-Shiong all of his life has been taking on seemingly impossible tasks, finding bigger answers for lesser questions, thinking far outside of the box.
No one has questioned his intellect or drive. His family fled China during the war with Japan in the late 1930s. His father, Chan Soon-Shiong, became a grocer and respected dispenser of Chinese herbal remedies. Both parents were Hakka, an ethnic group admired in China for brains and ambition, but seen as outsiders who stressed kinship and mutual help for their own.
From the start, Soon-Shiong refused to be trapped by circumstances or tradition. Despite living in the twilight zone of South Africa’s apartheid –- neither “white” nor “colored” –- he studied medicine at the country’s premier university and managed to get an internship (for half pay) at the top “white” hospital. His chosen specialty was the pancreas and, later, pancreatic cancer. Why? “The pancreas is by far the most complex organ in the body,” he says.
It didn’t take Soon-Shiong long to start thinking beyond South Africa. He got a research grant from the Royal College of Surgeons in London, and moved with his young wife, Michele Chan Soon-Shiong, to Vancouver, to pursue graduate research. Three years later, UCLA invited him to join the school’s faculty. He performed the first successful pancreatic transplant on the West Coast.
That’s a career for some doctors. But at 30, Soon-Shiong was just getting started. He had his father’s interest in medical chemistry and his own eye for the main chance. He saw it in pharmaceuticals. He used Asian connections to build a business manufacturing generic drugs.
But that was a means to another end: inventing new drugs. While working on a NASA grant to study the behavior of human cells in weightless space, he became fascinated by the role of protein molecules in cells. If healthy cells grow by ingesting protein, why not use albumin protein to deliver cancer-killing drugs to tumor cells?
The ultimate result was Abraxane. It encases a well-known tumor-fighting drug (paclitaxel) in injectable nano-packets of protein. Soon-Shiong developed a complex system for freezing the material and spraying it through tiny nozzles to manufacture the particles. The idea was to target the drug and avoid the side effects of paclitaxel.
There were medical skeptics, and others who questioned Soon-Shiong’s business practices as he built his pharmaceutical empire. He once settled a corporate case out of court with his own brother. His pride and salesmanship occasionally clash with scientific caution. The FDA once ordered him to tone down promotional claims about his nanotechnology standards. Early in his career, he touted a diabetes treatment based on what turned out to be only a temporary success with a single patient.
But the FDA first approved the Abraxane technique in 2005. Abraxane is now approved in the U.S. for breast, lung and pancreatic cancer treatment. Regulators in Europe recently gave Abraxane tentative approval for its first use there, for pancreatic cancer.
Soon-Shiong eventually sold both his generic drug company and the company he built around Abraxane. He took stock in Celgene, the company that that acquired Abraxane. Celgene’s stock price has soared 188 percent since the acquisition was announced in June 2010.
He is the richest man in LA. His wife retired from her career as an actress to rear their two children. One is in college and the other is heading there.
So now what? He has signed the “Buffett Pledge,” promising to give at least half his fortune to charitable causes. Some people might retire, or turn entirely to philanthropic work. Not Soon-Shiong.
Having plunged as far as possible into the micro-world of cell and cancer biochemistry — down to peptides and organelles -– Soon-Shiong has turned the lens around to look at humankind as a whole, as though we are a gigantic cellular system.
“I’ve been thinking about this nearly a decade,” he says.
He began acquiring companies and patents, some seemingly far afield from medicine. For example, Soon-Shiong owns numerous patents in the hot field of machine vision. How he can integrate that into his health care pursuits isn’t clear.
But give him time.
“I probably could make more money -– a lot more money -– from that business, but I want to stay focused on medical care,” he tells me.
“I have an obligation to use what I know to try to bring real, usable medical science to every doctor and bedside and patient,” he says.
In a sense, he is returning to his ethnic communitarian roots as Hakka Chinese. Only now, the community is the entire human race and all of the DNA, proteomic and cellular information we possess.
“We need to and must protect privacy,” Soon-Shiong says. “But I think that people will be willing and even eager to share medical information about themselves for the greater good of mankind.”
Until recently, few outside of the health care industry or LA knew about Soon-Shiong. But now, he is carefully stepping into the media limelight to promote his ideas, his company and his values.
Proud of his achievements but restless for more, Soon-Shiong has decided that visibility means business and more attention for his holistic approach to medical care. A dedicated sports fan, he bid on, but failed to win, the Dodgers. He bid on, but failed to win, rights to a new National Football League team in LA. But he did manage to buy Magic Johnson’s interest in the NBA’s Lakers.
When the Lakers are at home, you often can see Soon-Shiong (usually with his wife) in his courtside seat in the Staples Center.
He watches with a player’s appreciation of the game, having started shooting on netless hoops back in South Africa when he was 10. When he arrived in LA in 1980, he was able to play pickup games at UCLA’s Pauley Pavilion, and became a rabid Lakers’ fan. The Lakers were then reemerging with a fast-paced, flowing but disciplined style of play they called “Showtime.”
Soon-Shiong fell in love with “Showtime.” Lakers games, he says, are “a sacred space” for him –- the only time he isn’t thinking of his work.
But of course there is a science and a pattern involved even in being a fan. It has to do with where he sits.
Given his net worth, many years as a fan and close ties to the team, he could have any seat, with the possible exception of Jack Nicholson’s.
Soon-Shiong chose seats at the end of the court, halfway between the basket and the corner. It’s the end of the court on which, as the home team, the Lakers play the last quarter. So Soon-Shiong can watch the action under the basket and study fast breaks as they come toward him.
There are other angles. The seats are close to the Lakers bench, which he can observe and eavesdrop –- or visit during breaks. He is visible in the arena -– political and business leaders know where to find him –- but isn’t center court, with the Hollywood crowd. He is near the tunnel through which the Lakers enter and leave.
“This is the perfect place to sit,” he explains at a recent game. “I see everything.”
The Background
As one of the recently industrialized nations, India has a fast-growing economy as well as an ever-expanding, ever-urbanized population, however its healthcare system still has a lot of potential for development. To Western readers, analyzing a healthcare system in the East seems daunting. It takes some of us decades to master an understanding of the healthcare system of our origin country. Nevertheless, there are several methods to approaching another country’s system. These include the exposition of some invariant principles that apply across various contexts, the application of existing frameworks for healthcare system analysis, appraisal of the major transitions underway in the country, and an analysis of the country’s public health issues.
India faces challenges in pursuing each of these goals. With regards to cost, at least 70% of all healthcare is frequently financed out-of-pocket by the population. There is little health insurance or other forms of risk pooling, little regulation and accountability of providers, and a predominance of fee-for-service payment, all of which are associated with high costs. There is also questionable efficiency of much of the state healthcare system, and a great distrust of the public sector.
With regards to quality, there is little regulation of providers, treatments, and medical products, considerable variation in the training and education of providers, and little enforcement of laws and regulations at state level. There is also evidence of poor health outcomes among the Indian population.
Regarding access, a substantial majority of the population dwells outside of where most healthcare facilities exist – in the cities. Access is particularly problematic for the poor, women and marginalized groups, and inadequate roads and transport limit proximity to healthcare facilities. Health insurance provision thus requires adequate supply of delivery sites near insured patients (to offset lost wages and the large travel and lodging costs incurred). In terms of disease, India accounts for a large share of the global burden of maternal deaths (19%), malnourished children (33%), neonatal deaths (29-30%), under-vaccinated children (37-44%), leprosy (50%), and tuberculosis (25-26%).
The balancing acts here seem formidable. Most economists believe it impossible to achieve all three goals simultaneously and, thus, that tradeoffs must be made. Underlying the new reform is “the triple aim”: improved quality, reduced cost, and improved “population health”, but it is unclear whether all of this is achievable.
This discussion is pertinent to India’s healthcare system because there are at least two efforts underway on the subcontinent to solve the iron triangle in the delivery of healthcare. Firstly, medical tourism promises high quality, lower cost, and more accessible care compared to what patients in other countries can find. Secondly, some specialty hospitals in India appear to achieve all three goals in providing care to the “bottom of the pyramid”.
India is also hampered in terms of the “policy levers” at its disposal to change the system. In terms of financing, India spends roughly 4% of its GDP on healthcare, and only about $54 per capita (2010 data) or $132 per capita (2009 data, adjusted for purchasing power parity). The vast majority of healthcare expenditures (ranging from 67-70% over the last few years) are paid out-of-pocket by the population, whereas the government accounts for only 30-33%.2 While there is an emergent micro-insurance and private insurance sector, there are little means to finance broader access to healthcare. Among physicians, there is also little price (fee) transparency, few medical audits, and deficient record keeping. Most providers work in the private sector and are not employed by hospitals or other large firms, and with regards to regulation, there has been little regulatory oversight or enforcement.
Major Transitions in India
Demographic Transitions
India is the world’s second most populous nation (1.21 billion people in 2011) and is expected to reach 1.35 billion by 2022. The urbanization and concentration of the Indian population is clear; while 25% of the population resided in cities by the end of the 1980s, this increased to 31% (2011), and is expected to exceed 55% by 2050.
Two additional demographic trends are longer life expectancy and the growth of the elderly population (in absolute numbers, not as a percentage of the total population). Life expectancy at birth for males soared from 32.1 years prior to Independence (1941) to 65.8 (2006-2010), and continues to rise. This will swell the ranks of the chronically ill and increase demand for acute hospital care and long-term care. Demand will also be fueled by the growing literacy of the population and their growing awareness of the treatments available.
Moreover, India simultaneously faces a decline in fertility and the breakdown of the extended family (particularly as women join the labor force and the young migrate to cities in search of work). The birth rate per 1,000 population declined from 29.5 (1991) to 22.1 (2010). The population growth rate slowed from 1.98 (1991) to 1.34 (2009), while the natural growth rate slowed from 19.7 (1991) to 14.9 (2010). During the same time period, the total fertility rate dropped from 3.6 (1991) to 2.5 (2010). These declines will eventually compound problems of financial and caregiver support of the elderly and create demand for long-term care services. Indeed, new social programs are being developed for the elderly and other vulnerable populations left without extended family, including the disabled, drug addicts, street children, child laborers, and those with HIV.
India has also witnessed an increase in accidents, injuries, and road fatalities. This stems from a rise in the number of vehicles on the road, and the frequently chaotic behavior of drivers. This has placed even greater burdens on a healthcare delivery system that lacks a “911” system, public awareness of the Emergency Medical System (EMS) and first aid skills, sufficient availability of emergency and trauma services, and proper emergency equipment. As a result of delays in treatment and lack of access to specialized care, injury is India’s third leading cause of death.
As a result of delays in treatment and lack of access to specialized care, injury is India’s third leading cause of death.
Socio-economic Transitions
India has been hailed for its rapid economic development between 1990 and 2010 following economic liberalization. The country’s rate of GDP growth averaged 6.6% over this time period. As a result, the incidence of poverty was nearly halved between the late 1970s (51.3%) and the late 1990s (28.6%). By 2004-2005, urban poverty levels had declined to 26%, while rural poverty rates dropped to 28%. The varying definitions of poverty-line status suggest the number of absolute poor ranges from 330-480 million people. According to Census data, literacy rates have also risen from 52.2% (1991) to 74.0% (2011).
However, despite the economic growth and the resultant increase in personal incomes and tax revenues, India has not increased public spending on healthcare in a commensurate fashion. In fact, liberalization was accompanied by reductions in central government spending on healthcare in order to shrink public deficits and encourage the development of the private sector.
Epidemiologic Transitions
There is growing prominence of chronic illness among the population typical of countries that increase their national wealth. In particular, India has increasing cases of Western-style conditions such as diabetes, hypertension, and obesity, and growing presence of heart disease and cancer-related illnesses. For example, 700,000 new cancer cases are diagnosed in India every year; 800,000 die of the disease annually. In 2004, chronic diseases accounted for an estimated over 50% of the 10 million deaths, compared to 37% of deaths due to communicable diseases, maternal and perinatal disorders, and nutritional deficiencies. Cardiovascular diseases and diabetes are the second leading cause of death in India behind tuberculosis (TB). Among the bulk of the adult population, cardiovascular diseases account for roughly 25% of all deaths. This reflects India’s rapid change in lifestyle, in diets, and increasing levels of stress due to urbanization, decrease in physical activity, and genetic predisposition to heart disease risk factors.
In addition to chronic diseases, India has witnessed the growth of illnesses such as HIV/AIDS and TB, the latter of which is the highest cause of death, now accounting for over 25% of all cases worldwide. India’s TB rate is double that of China. Obstacles obstructing the combatting of it include the lack of access to treatment, the need for long-term treatment, the cost of missing work in order to seek treatment, and the stigma attached to treatment. As a result of these factors, there is a growing problem of drug-resistant TB in India that requires a longer and more expensive treatment regimen, and threatens the entire world.
India has progressed in attacking chronic diseases through a series of national policies and programs. However, these programs have focused on specific targets (cancer, vision, mental health, diabetes, TB) with technological responses – eschewing integrative, multi-component interventions – and have oftentimes been unevenly implemented geographically. The disparities in treatment for chronic disease are enormous between urban and rural populations and between wealthy and poor populations (two to twenty times). Episodes of hospital care for chronic disease are twice those for infectious disease, with higher expenditures overall and higher expenditures on private sector services. Expenditures on chronic diseases accounted for 45% of average monthly income for the highest income group and 70% for people in the low-income groups.
The interaction of these two transitions – urbanization and chronic illness – will have enormous effects on India. The rise in lifestyle diseases in urban areas will spur an increase in inpatient hospital admissions and costs, and is projected to account for a $236 billion in lost productivity between 2005 and 2015. The relative frequency of treatment for lifestyle and chronic illness conditions varies between inpatient and outpatient settings. Compounding both of these trends is longer life expectancy and the growth of the elderly population.
India has increasing cases of Western-style conditions such as diabetes, hypertension, and obesity, and growing presence of heart disease and cancer-related illnesses.
Implications for India
All of these transitions will increase demand for healthcare services and insurance coverage to pay for them. They are reinforced by a series of parallel transitions enabling this demand to be realized: private sector employment, rising income levels, a growing supply of medical professionals, increased investment in healthcare infrastructure, and increased government investment in transportation and telecommunications infrastructure that will extend the reach of providers and manufacturers into rural areas.
India’s economic growth has led to the co-presence of “Two Indias”: a shimmering India with an urban and increasingly middle and upper-middle class which purchases allopathic medicine in the private sector, and a shivering India with a large population of rural and urban poor who rely more on traditional medicine and the public sector. The Two Indias are characterized further by a mismatch in population and healthcare infrastructure: whereas 69% of the population resides in rural areas, 75% of the allopathic medical infrastructure is located in urban areas.
India lags behind fellow BRIC nations, as well as most other developing nations, in the percentage of its population with access to safe drinking water and sanitation.
Public Health Issues
Since Independence, India has made great strides in public health. The death rate fell from 25.1 deaths per thousand (1951) to 7.2 (2010). Malaria cases have also dropped; and smallpox, polio, and leprosy are nearly contained. Nevertheless, there are huge differentials between urban and rural areas here. For example, the infant mortality rate in rural areas (55 per 1,000 births) dwarfs that in urban areas (34). The country also faces a host of public health issues, with India contributing to one-fifth of the world’s diseases and accounts for 18% of deaths worldwide.
These problems are exacerbated by India’s large population, by rapid (largely unplanned) growth, urbanization, industrialization, and widespread use of pesticides and fertilizers in agriculture. Chief among these problems is water supply and sanitation; India lags behind fellow BRIC nations (Brazil, Russia, and China), as well as most other developing nations, in the percentage of its population with access to safe drinking water and sanitation.
Due India’s low literacy rate (an estimated 26% of the Indian population), people have limited understanding of the importance of sanitation and personal hygiene, which contributes to the problem of water-borne illnesses.
Furthermore, according to 2011 survey data, an estimated 42% of Indian children under five suffer from malnourishment (defined as being moderately or severely underweight). Malnutrition in India accounts for roughly one-third of the world’s total figure, and causes one-third to one-half of all deaths among children under five. India’s IMR (47.6 deaths per 1000 live births, 2011 estimate) ranks among the highest 25% globally.
Part of the current problem is a lack of a formal department of public health in the central government ministry with responsibility for healthcare. The medical profession also has lack of appreciation for public health, and there are misguided public beliefs about the origins of diseases. Historically, the government has attacked these through vertical disease control programs, with great duplication across programs and no coordination between them. Moreover, the program funding was oriented to new infrastructure, leaving the states to finance their continuing operations and staffing (which they were often unable to do).
