2 October 2023

HSBC Worldviews – Rusty Miller

An in-depth look at key sectors and how they influence international markets.

HSBC is at the forefront helping life sciences companies and other important healthcare players adapt to an ever-changing and complex world. From artificial intelligence to supply chain management, the sector faces a series of real-world challenges that have forced innovative responses and greater global coordination. In this latest edition of HSBC Worldviews, Commercial Banking Head of U.S. Healthcare Rusty Miller shares his perspectives on these trends and more.

What shifts are you observing in the healthcare sector?

The biggest shift in the industry has been a move away from a “just-in-time mentality” to a “just-in-case mentality” and that hits each sub-sector of healthcare differently. For example, our drug development clients are asking, “Do I have the right suppliers for my active ingredients? Is my supply chain strong enough to weather geopolitical events?” The pandemic pushed many companies to deploy new technologies that have improved design, development, research, clinical trials, and supply chain management. These efforts continue to deliver positive results. And now it has pushed the strategic thinking of leadership to new heights.

How is HSBC supporting its clients in biotech and pharmaceuticals?

HSBC’s clients know the strategic value of having one, truly global banking partner. Coordinating global operations is already difficult; navigating a different bank in every strategic market makes the day-to-day operations intensely complicated, ties up working capital, and places a tremendous burden on finance teams. Our clients leap these obstacles by utilizing HSBC’s technology at scale and by levering our one-of-a-kind international network.

Our clients are also benefiting from significant investments by the bank. HSBC now delivers equity research in life sciences in the U.S. and Europe, complementing our award-winning coverage in MENAT and Asia. In addition, we recently rolled out the Innovations Banking team that covers early stage, pre-approval drug discovery and healthcare technology businesses (both med tech and digital health). In collaboration with HSBC’s Corporate Banking platform, clients can now invest in a banking partner that delivers value at every stage of their life cycle.

My team’s bankers work in close coordination with HSBC’s healthcare investment bankers as well. We find that global business leaders value a global business perspective. Our clients often tap our investment banking team when they begin to think about exits, consolidation, and value creation for a view that is uniquely comprehensive and globally informed.

How will artificial intelligence impact the industry?

It is early days for sure, however, there are a few indications that A.I. will have an impact in the near future. For instance, we are already seeing A.I. play a role accelerating the development of new pharmaceutical agents. Development of new proteins and chemical compounds in virtual environments has been around for a while, but these new tools will certainly speed up the pace of discovery and offers the possibility of lower R&D costs.

One area that seems ripe for even greater disruption is within medical devices. The entire universe of medical devices was built in an analog world. It’s reasonable to think that the future of medical devices will require nearly all of them to be rebuilt for a connected world.

Part of our bankers’ job is to allocate capital, and we seek confidence that the risk is aligned to the business model, and ultimately, better patient outcomes. If outcomes and risks are aligned, then HSBC will be a strong partner for businesses looking to deploy these technologies.

How important is the healthcare sector to the U.S. economy?

It’s huge, and its global. Across all healthcare segments, the U.S. spends upwards of $5 trillion annually – of which Americans spent over $600 million on prescription drugs. Many estimates project healthcare will represent more than 20% of U.S. GDP by 2027. Notably, however, the strongest growth markets post-pandemic have included Asia, Africa, and Latin America.

With that said, the U.S. remains the innovation engine of the world and funds more research and development than any other market, so that supply chain works both ways. Not only are our clients putting in the raw materials to create products, but they’re also taking those finished products and delivering them to healthcare settings around the world. HSBC is uniquely positioned to add value on both sides of these cross-border networks.

We see hospitals, wellness, staffing, and managed care businesses with these needs from time to time. But the greatest concentrations and focus area for HSBC are life sciences, medical devices, distribution, and digital health.

What attracted you to the healthcare space?

I am continually amazed at the ingenuity of mankind. I have been fortunate to have a front row seat with my professional focus on healthcare. It’s been a privilege to work closely with industry leaders dedicated to changing the world one patient at a time. I take a great deal of pride in providing support to these efforts and love it when our team finds a seat at the table to contribute to the long effort it takes to deliver innovation to the market. It takes a future forward mindset and a great deal of patience.