As the year winds down and attention turns to 2025, most health companies are preparing for the J.P. Morgan Healthcare Conference, kicking off January 13th in San Francisco . Executives, strategists, investor relations teams and communicators are all preparing their company narratives – what they will unveil, what pipeline updates will resonate, what deals may be in the making, and what tone they want to set for the coming year.
The traditional themes for JPM 2025 – Innovation, M&A and increasingly AI – offer the potential to drive hard news and content for every major healthcare company even as uncertainty remains on the policy and political front.
The Edelman Trust Barometer Special Report: Trust and Health, and recent media and investor narrative analyses, show that CEOs must bring new thinking to overcome reputational obstacles in healthcare and effectively address the topics and traditional themes that are of interest to their stakeholders.
Addressing Distrust
Healthcare companies were viewed as heroes throughout the pandemic, but confidence in their commitment to do the right thing has waned, according to the 2024 Edelman Trust Barometer Special Report: Trust and Health. Trust in healthcare companies declined from 63% to 58% globally, with U.S. sentiment declining 11 points into a state of distrust at 42%.
The Edelman Trust data shows that the politicization of medical science is feared. Healthcare companies and their CEOs are not well-trusted, and by a margin of 2 to 1, the public believes that “innovation” is being poorly managed.
To improve this dynamic, industry leaders are called to bring stakeholders together and (re) build that trust as a community seeking to solve the same issues. The dialogue must focus on finding and nurturing common ground, rather than focusing solely on politics and profits.
The Innovation Conundrum
Innovation – long the anchor for reputation, pipelines and valuations – is increasingly being met with worry and skepticism. While investors place a premium on the fruits coming from industry innovation, the quickening pace of innovation coincides with increasing public anxiety about everything from the application of AI and data privacy in healthcare to the development of gene-based therapies.
In the Special Report on Trust and Health, healthcare companies saw a decline in trust across markets and demographics in 2024, accompanied by misinformation and increased mistrust of health technology; even less people trust healthcare CEOs. While trust in healthcare businesses remains solid overall, this confidence does not extend into trust in industry innovations, which lag far behind.
According to Edelman’s 2024 Trust Barometer, science and transparency are particularly critical to building acceptance in fields where innovation is advancing faster than public understanding. By leveraging effective government regulation, healthcare companies can help build trust in the public eye regarding their innovative products.
For Healthcare CEOs and executives, this means:
- Maintaining Strong Scientific and Ethical Standards: Regularly communicating with audiences regarding robust protocols that are in place to ensure transparency, data protection, and ethical oversight of innovation, involving scientists and ethicists to emphasize patient-centered decision-making.
- Putting Scientists at the Forefront: As uniquely trusted figures, scientists can help bridge the trust gap by taking the lead in conversations on innovation, while underscoring safety, efficacy, and the societal benefits of new medical advances.
Preparing for a Pent-Up Demand in M&A
The incoming Trump administration has added fuel to the M&A fire, as bankers and private equity executives speak about a more deal-friendly environment being created in 2025. “Top executives at asset managers—from credit specialist Ares Management to leveraged buyout stalwart KKR & Co.—are again forecasting record years and backing their declarations with billions of dollars in investments and fundraising,” according to recent reporting in The Wall Street Journal.
As noted in Mergermarket, a significant portion of U.S. sale processes have remained unlaunched due to economic conditions – 109 companies in the US and Canada have picked sell-side advisors, but have yet to kickstart their auctions as of the end of October, suggesting a high potential for deal activity resumption and pent-up investor interest in 2025.
With this renewed anticipation for deals, investors are seeking clarity on healthcare leaders’ future M&A plans. For Healthcare CEOs and executives, this means:
- Developing a Comprehensive Narrative on Value Creation: M&A remains an important element, but it is not the only fix for creating shareholder value. Executives must present a comprehensive approach and well-rounded strategy, including internal R&D and external development, robust product pipelines, reliable supply chains, effective commercial operations, and an innovative mindset across their workforce and organization.
- Emphasizing Opportunity and Discipline in Investor Communications: The election results and market reaction may create exuberance for M&A deals, but uncertainty remains around policy issues, the regulatory environment, and potential valuations. While highlighting the ample growth opportunities available for healthcare, executives must emphasize a disciplined and selective approach to M&A as part of a broad growth and value-creation strategy. They should provide investors with a clear view of M&A focus areas and capital allocation priorities when presenting the company’s outlook.
AI: Bridging the Gap from Hype to a Trusted Reality
One game-changing theme for investors is how companies harness AI, though much of the discussion today remains hype vs. reality. In our analysis of investor calls from the past six months1, approximately 40% of AI-related discussions still revolve around theoretical applications that will be part of future clinical trials, predictive modeling, patient data analytics, and diagnostics at scale.
AI has become an increasingly trendy topic for companies and the media, but it is also viewed with great skepticism. In our analysis of 7,000 media stories on AI, three of the top four themes that emerged in coverage related to the biopharma industries are all areas where the public has the most distrust, including drug discovery, diagnostics and patient monitoring. These findings show a disconnect between what companies are talking about and what stakeholders believe.
Healthcare companies must convince investors and patients that AI applications offer sustainable value and benefits that can accelerate or generate new discoveries, make treatments more cost-efficient and accessible, and empower patients.
For Healthcare CEOs and executives, this implies:
- Sharing Tangible AI Success Stories: Move beyond theoretical benefits to present more specific AI case studies and ROI that showcase measurable outcomes, such as reduced patient wait times, improved diagnostic accuracy, and streamlined drug discovery.
- Doubling Down on Safety: Ensure that the paramount concerns of safety and privacy are front and center in the AI discussions. Establish and communicate policies and governance approaches to address concerns around data privacy and ethics and reap the potential benefits of AI in healthcare.
With JPM 2025 on the horizon, strong and clear communications about these themes – Innovation, M&A and increasingly AI – will be top of mind for leading healthcare companies, investors and news outlets.
For any questions or more strategic guidance, please reach out to:
- Bill Price, Executive Vice President, Edelman Smithfield (bill.price@edelmansmithfield.com)
- Lynn Hanessian, Edelman, Chief Strategist, Health (lynn.hanessian@edelman.com)
- Todd Ringler, Edelman, Executive Managing Director, Earned Media US (todd.ringler@edelman.com)
[1] Based on an analysis of earnings calls transcripts since from June 6 to November 4, 2024, for 89 companies in the healthcare sector with market capitalizations over $5 billion.
* This document may include content generated with the assistance of artificial intelligence tools