Craig Garthwaite
Professor of Strategy
Herman Smith Research Professor in Hospital and Health Services Management
Director of Healthcare at Kellogg
Professor Garthwaite is the Herman R. Smith Research Professor in Hospital and Health Services, a Professor of Strategy, and the Director of the Program on Healthcare at Kellogg (HCAK). He is an applied economist whose research examines the business of healthcare with a focus on the interaction between private firms and public policies.
His recent work in the payer and provider sectors has focused on the private sector effects of the Affordable Care Act, the impact and operation of Medicaid Managed Care plans, the responses of non-profit hospitals to financial shocks, and the economic effects of expanded social insurance programs such as Medicaid and Medicare for All.
Professor Garthwaite also studies questions of pricing and innovation in the biopharmaceutical sector. In this area he has examined the effect of changes in market size of investments in new product development, the evolving world of precision medicine, expanded patent protection on pricing in the Indian pharmaceutical market, the innovation response of United States pharmaceutical firms to increases in demand, and the relationship between health insurance expansions and high drug prices.
His research has appeared in journals such as the Quarterly Journal of Economics, the American Economic Review, the Annals of Internal Medicine, and the New England Journal of Medicine. In addition, he is a frequent media commentator appearing in media outlets such as the Wall Street Journal, the Washington Post, and The New York Times. He has also appeared as a guest on various television and radio shows such as Nightly Business Report and NPR Marketplace. In 2015, Professor Garthwaite was named one of Poet and Quants 40 Best under 40 Business School Professors.
Garthwaite received a B.A. and a Masters in Public Policy from the University of Michigan and his PhD in Economics from the University of Maryland. Prior to receiving his PhD, he served in a variety of public policy positions including the Director of Research for the Employment Policies Institute. He has testified before the United States Senate, United States House of Representatives and state legislatures on matters related to the healthcare markets, prescription drugs, the minimum wage, and health care reforms.
- Health Economics; Pharmaceutical Industry; Public Finance; Political Economy
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PhD, 2009, Economics, University of Maryland, College Park
MA, 2008, Economics, University of Maryland, College Park
MPP, 2001, Public Policy, Gerald R. Ford School of Public Policy, University of Michigan
BA, 2000, Political Science, University of Michigan, cum laude -
Assistant Professor of Management and Strategy, Kellogg School of Management, Northwestern University, 2010-present, 2010-present
Senior Lecturer of Management & Strategy, Donald P. Jacobs Scholar, Management & Strategy, Kellogg School of Management, Northwestern University, 2009-present -
Director of Research and Chief Economist, Employment Policies Institute, 2003-2005
Economist, Public Sector Consultants, 2002-2003 -
Faculty Impact Teaching Award (2 Sections), Kellogg, One Term
Chairs' Core Course Teaching Award, Kellogg, One Year
Young Economist Award, International Institute of Public Finance, 2011
Impact Award, Kellogg School of Management, 2010 -
Co-Editor, Journal of Public Economics, 2016-2020
Competitive Strategy
Based on time-tested economic principles for profitability and growth, this program offers strategy-focused leaders a blend of modern theory, strategic analysis and practical application for sustaining an organization’s long-term competitive advantage.
The PHYSICIAN CEO™ Program
Healthcare Strategy (STRTX-443-0)
The healthcare sector absorbs 17 percent of US GDP, encompassing a diverse set of industries with public, nonprofit, and for-profit buyers and sellers. It is bloated, inefficient, and ripe for innovation. How can enterprising firms develop sustainable strategies given the current and future industry structures, conduct, and government regulations? In this course, we will study and apply strategic principles in a variety of healthcare settings. In so doing, participants will become acquainted with several U.S. health sectors, regulatory oversight of these sectors, and major policy issues.
Foundations for Strategy Formulation (STRTX-431-0)
Value Creation and Capture in Chinese Healthcare (HCAKX-973-0)
Value Creation and Capture in Biopharmaceuticals (HCAKX-960-0)
Biopharmaceutical innovation results from the interaction of a complex set of firms that both generate and finance early stage products. As potential scientific innovations move through the research and development process, the various firms require both the involvement of increasingly sophisticated managers and infusions of additional capital from the private and the public market. This can often involve acquisitions or licensing with existing players - many of which have effectively outsourced large portions of drug discovery to these early stage firms. As a result, determining how value is created and captured in this area requires understanding the incentives and motivations of all of the players in the system, including but not limited to small biotechs, large pharmaceutical firms, venture capitalists, pubic investors, and private equity firms. This is true whether one is interested in operating an early stage firm, undertaking business development activities at larger firms, or being an investor in the public or private market. This course combines elements of your previous strategy, finance, and healthcare curriculum with new concepts and techniques specific to biopharmaceutical that will allow you to better understand this market. Students will apply tools of valuation and strategic decision making to both large and small firms that are attempting to develop and market new biopharmaceutical innovations. This will include both individual and group coursework requiring the use of concepts from previous finance, strategy, and economics courses - where groups will include a mixture of students with more and less backgrounds in each of these areas. After this course students will have a thorough understanding of the early stage biopharmaceutical market from both the point of view of an investor and a manager.
Field Study (STRT-498-0)
Field Studies include those opportunities outside of the regular curriculum in which a student is working with an outside company or non-profit organization to address a real-world business challenge for course credit under the oversight of a faculty member.
Business Strategy (STRT-431-0)
Strategy is the set of objectives, policies and resource commitments that collectively determine how a business positions itself to create wealth for its owners. This course introduces students to principles and conceptual frameworks for evaluating and formulating business strategy. Topics include the boundaries of the firm, the analysis of industry economics, strategic positioning and competitive advantage, and the role of resources and capabilities in shaping and sustaining competitive advantages.
Create & Capture Value in the Chinese Healthcare Market (HCAK-973-5)
Surpassing approximately ten trillion yuan ($1.4 trillion) in 2021, the Chinese Healthcare market ranks as the second largest in the world. The recent growth in this market is driven by a rapid expansion of the share of the public covered by basic medical insurance as well as an increase in the types of technologies that are covered. Beyond simply an emerging as a dominant consumer of healthcare technology, China is rapidly becoming a source of innovation in biopharmaceuticals, medical devices, and digital health. What was once a market or either 'me-too' or at times 'me -worse' technology has evolved into a supplier of cutting-edge medical solutions. Some of these solutions are targeted at specific nuances of the Chinese market while others will generate value globally. It is now clear that any healthcare decision maker over the next several decades will need to have an understanding of this market and its role in the global healthcare ecosystem. It is also clear that success in the Chinese market will not be achieved by simply applying modified versions of global strategies. The sheer scope of the market combined with the complexity of healthcare and an active government interested in domestic production requires careful consideration of the sources of value creation and capture in this market. In addition, managers in domestic Chinese firms need to more broadly understand the needs of other global healthcare markets and how their technologies can be used to create and capture global value. Absent that understanding, domestic firms are unlikely to be able to optimally structure the investments and partnerships with global firms. Kellogg's 'Deep Dive: Chinese Healthcare Market' combines in class case and lecture-based learning, leading practitioner guest lectures, a breadth of networking opportunities, and cultural immersion opportunities designed to prepare future business decisionmakers in healthcare to interact with the Chinese market.
Field Study (HCAK-498-5)
Independent Study
Healthcare Strategy - Deep Dive (STRT-443-5)
Healthcare Deep Dive StudentsPlease note that students cannot be enrolled in classes that overlap time. If you are accepted into a Deep Dive course, you will need to drop any conflicting course secured through the bidding process or otherwise. This applies to all time conflicts, even if the time conflict only occurs on 1 or 2 occasions.
Healthcare Strategy (STRT-443-0)
This course delves into the strategic issues faced by healthcare firms. We will use concepts from the core strategy course (STRT-431) as an organizing framework, and discuss where and why the healthcare sector deviates from the norm. For example, what is the role of competitive positioning when quality is so difficult to measure? How can you remain profitable if you compete against not-for-profits who don't face taxes?
Because a great deal of healthcare strategy relies on understanding the nitty-gritty of particular industries, we will spend time learning about several of these, including health insurance, hospitals, pharmaceuticals, and medical devices. Although our focus is on private firms in the U.S., we will (of necessity) be discussing the role of the government in regulating and providing healthcare, and (time permitting) discuss some international issues. This is a lecture and case-based discussion course with group projects and a final exam.
Growing & Sustaining Success in Biopharmaceutical Firms (HCAK-985-5)
This course focuses on questions of value creation and capture, capital allocation, portfolio construction, deal financing in the biopharmaceutical sector. The professor will build on his time as the head of Bain’s Healthcare Practice and the Chief of Strategy for Horizon Therapeutics to provide students with a framework for understanding the management of larger biopharmaceutical firms.
Value Creation and Capture in Biopharmaceuticals (HCAK-960-5)
Biopharmaceutical innovation results from the interaction of a complex set of firms that both generate and finance early stage products. As potential scientific innovations move through the research and development process, the various firms require both the involvement of increasingly sophisticated managers and infusions of additional capital from the private and the public market. This can often involve acquisitions or licensing with existing players - many of which have effectively outsourced large portions of drug discovery to these early stage firms. As a result, determining how value is created and captured in this area requires understanding the incentives and motivations of all of the players in the system, including but not limited to small biotechs, large pharmaceutical firms, venture capitalists, pubic investors, and private equity firms. This is true whether one is interested in operating an early stage firm, undertaking business development activities at larger firms, or being an investor in the public or private market. This course combines elements of your previous strategy, finance, and healthcare curriculum with new concepts and techniques specific to biopharmaceutical that will allow you to better understand this market. Students will apply tools of valuation and strategic decision making to both large and small firms that are attempting to develop and market new biopharmaceutical innovations. This will include both individual and group coursework requiring the use of concepts from previous finance, strategy, and economics courses - where groups will include a mixture of students with more and less backgrounds in each of these areas. After this course students will have a thorough understanding of the early stage biopharmaceutical market from both the point of view of an investor and a manager.
