R ich countries pour heart-stopping amounts of money into health care. Advanced economies typically spend about 10% of gdp on keeping their citizens in good nick, a share that is rising as populations age. America’s labyrinthine health-industrial complex consumes 17% of gdp, equivalent to $3.6trn a year. The American system’s heft and inertia, perpetuated by the drugmakers, pharmacies, insurers, hospitals and others that benefit from it, have long protected it from disruption. Its size and stodginess also explain why it is being covetously eyed by big tech. Few other industries offer a potential market large enough to move the needle for the trillion-dollar technology titans.
In 2021 America’s five tech behemoths collectively spent more than $3bn on speculative health-care bets (see chart)—and may have invested more in undisclosed deals. Some of their earlier health-related investments are starting to pay off. Amazon runs an online pharmacy and its telemedicine services reach just about everywhere in America that its packages do, which is to say most of it. Apple’s smartwatch keeps accruing new health features, most recently a drug-tracking one. Meta has scrapped its own smartwatch plans earlier this year but offers fitness-related fun through its Oculus virtual-reality goggles. Microsoft is expanding its list of health-related cloud-computing offerings (as is Amazon, through aws, its cloud unit).
Yet it is Alphabet, Google’s corporate parent, whose health-care ambitions seem to be the most vaulting. Between 2019 and 2021 Alphabet’s venture-capital arms, Google Ventures and Gradient Ventures, and its private-equity unit, CapitalG, made about 100 deals, a quarter of Alphabet’s combined total, in life sciences and health care. So far this year it has injected $1.7bn into futuristic health ideas, according to cb Insights, a data provider, leaving its fellow tech giants, which spent around $100m all told, in the dust. Alphabet is the fifth-highest-ranking business in the Nature Index, which measures the impact of scientific papers, in the area of life sciences, behind four giant drugmakers and 20 spots ahead of Microsoft, the only other tech giant in the running. The company has hired former senior health regulators to help it navigate America’s health-care bureaucracy.