Persona non grata: why pharma must get to the digital health table

Derek Newell explores why it is so important for pharma to embrace digital health.

Digital health is on fire these days. By every measure, from venture capital dollars to new apps to payor digital health initiatives – interest and investment into digital health has soared. For good reason. Hardly hyperbole, digital health will transform every aspect of health care in ways that most people have yet to fully appreciate.

Despite this, pharma – with a few notable exceptions – has yet to join the party in a meaningful way. This is a mistake. In truth, pharma has two choices – embrace digital health or be controlled by others who embrace it for them.

Consider what's possible today and more importantly what's on the horizon for tomorrow. Today we have wristbands analyze our sleep patterns and activity levels. Soon cell phones (with no attachments) will be able to non-invasively track blood glucose levels and calculate required insulin dosage for patients with diabetes. Today, we can monitor medication adherence by placing an ingestible sensor on the pill. Soon, there will be hundreds of wearable sensors that capture a variety of biometric data points and transfer the data to a smart server via an app on a mobile device.

The point is that digital health will enable us to monitor patient behavior, the side effects of drugs, and even health outcomes in ways never possible before. Very quickly the cost will fall to pennies per patient per day. It's not hard to imagine a time when a sensor inside the cap of a bottle of prescription pills will be able to detect whether the patient removes the right number of pills from the bottle at the right time. The technology for this exists today. Compared to ingestible sensors, it has few regulatory hurdles, would be radically cheaper and, in a majority of cases, would be just as effective.

We fall in love with the "holy grail" in healthcare, but there are thousands of entrepreneurs that embrace the concept of "minimum viable product" that will figure out how to cheaply and effectively change human behavior. There will be incredibly cheap sensors to determine with a high degree of accuracy whether or not medication has actually been taken, whether the patient experiences side effects, and even their effectiveness at controlling their illness. You will have some very powerful tools for monitoring and impacting health outcomes and addressing the complexities of adherence with data streaming in from "the field" in real time – data that has never existed before.

So why should pharma care? Arguably the largest shift happening in healthcare is that from a fee-for-service model – which rewards delivery – to that of one focused on health outcomes. Regulatory agencies and payors are increasingly experimenting with reforms that reward actions and participants that create value. While it has been enough for pharma to date to simply sell pills, in a world focused on value and outcomes the industry must do more. It must provide added value. According to the New England Health Institute, an estimated one third to one half of all patients in the U.S. do not take their medications as prescribed by their doctors. This will not be an acceptable state of affairs where monitoring and managing adherence costs a fraction of the cost of the drugs not taken.

Back to the bottle of prescription pills with a sensor in its cap. If it's possible to know whether patients are taking their medications with the twist of a cap, then it's plausible that payors will decide they will only pay for medications taken – or perhaps not refill the prescription altogether if it's hasn't been taken and is not effective. No value – no money. For pharma, this is neither an appealing – nor far-fetched – scenario.

One day in the not too distant future every prescription will come with an app. Combine this with smart pill bottles, ingestible, wearable and environmental sensors that can track the side effects of medications, and whether or not patients are taking correct dosages of their medications and you have the ingredients for radical transformation of the industry. Every stakeholder in the health care system will be expected to have a role – and a responsibility – in improving outcomes.

The good news is that in the world of digital health, the possibilities for pharma to provide added value to their products are infinite. New sensors and applications can allow them to interact more directly with consumers, increase patient adherence, provide data that if acted upon can reduce medical complications, and even reduce hospitalizations. This information will also be used in the end to produce both better drugs and better outcomes. By developing digital health solutions, pharma could even provide data that gets – or keeps – a drug on a formulary or even ensures a premium price.

But if these are all possibilities, so too is it possible for pharma to cede control of digital health to others in the health care system. If payors, for instance, step up (as they have been) with an active role in digital health in the absence of pharma, then it's likely they will take control of this new data stream, in essence controlling pharma's most profitable drugs.

A few pharma companies have embraced digital health and are reaping the benefits. Sanofi, maker of the top-selling insulin therapy Lantus, has put considerable muscle behind mobile apps for its diabetes business, with apps for managing diet and glucose levels, for instance. Recently it launched a new crowdsourcing initiative to engage the diabetes community in developing new diabetes apps. Merck launched the Merck Global Health Innovation venture fund – with $500 million padding its coffers - to invest in digital health and has so far made more than 20 investments in digital health companies.

Still, for the most part, there is an empty chair at the digital health table with pharma's name on it. If the industry is smart, it will fill it quickly.

About the author:

Derek has 20 years experience growing and leading innovative healthcare technology and service companies. Prior to joining Jiff, Derek was President and CEO of Robert Bosch Healthcare. While at Bosch, Derek worked with the management team to build Bosch into the world's largest remote patient monitoring company. Prior to joining Bosch, he was the CEO of Health Hero Networks, a US based remote patient monitoring company, which he sold to Bosch in 2007. Prior to that, Derek was the Chief Marketing Officer of LifeMasters from 2000 to 2006. While at LifeMasters, Derek launched the first web-based remote patient monitoring system and pioneered the development of LifeMasters "Active Intervention Model," the first patient centric, co-morbid, disease management platform. Under his leadership, LifeMasters grew from under $10 M to over $150 M in in annual revenue. Prior to LifeMasters, Derek worked with Shervin Pishevar at WebOS, a company that launched one of the first web-based operating systems. Derek holds graduate degrees in Business and Public Health from the University of California, Berkeley.

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