The latest hype, or a real opportunity: is mobile the new great hope for pharma?
Michael Thomas and Jonathan Anscombe
A.T. Kearney
The problems faced by healthcare systems around the world are well known. For a start they are bankrupting America. Of the $3.5 trillion budget outlay in 2010, close to 23% was accounted for by Medicare and Medicaid. These costs have risen by 9% a year over the past 5 years, and despite current efforts of the Obama administration, healthcare costs are forecast to continue to grow by 6% annually until 2015.
The problems of the pharmaceutical industry are also well known. The patent cliff is starving the industry of the innovation it needs to maintain growth and finance research. The financial crisis is driving health payers to squeeze prices and limit access to innovative medicines as affordability trumps value for money. A high QALY is little use if there is no budget.
Into this environment one of the biggest stories around is mobile health. Some truly spectacular (and speculative) forecasts are being made for the technology, with expectations of a market worth billions of dollars, supposedly creating enormous value for beleaguered health systems. The FDA is busy working out how to regulate the new market, NGOs are sponsoring numerous trials in the developing world, and every day ever more exotic technologies appear on the market. A recent Economist report on the future of healthcare in Europe even created an entire scenario around the use of these technologies.
However, while there are thousands of mobile-health applications, and hundreds of pilot programs seeking to prove that mobile technologies can improve healthcare delivery, there are few examples of scale deployment.
So far the reaction of most pharma companies has been cautious, dipping their toes in the water with the odd complementary application wrapped around a key brand. But is it all hype, or is this indeed a transformation in health delivery which the industry needs to drive?
"A high QALY is little use if there is no budget."
Why is mobile potentially so useful?
Healthcare, unlike many industries, is almost entirely delivered by face-to-face interactions between patients and professionals. This is manageable for episodic interactions like surgical operations, but for conditions that need regular monitoring, the inconvenience and expense of required travel means the treatment often fails to take place.
Mobile is a disruptive channel to deliver health services faster, more conveniently and to reach those who otherwise struggle to engage with the health system. It achieves co-location through technology, allowing patients and health professionals to interact without the need to be in the same place, potentially saving huge amounts of money.
As well as the huge potential to lower costs mobile health offers enormous convenience. As mobile platforms are increasingly ubiquitous, mobile connectivity is the only realistic mechanism for many citizens to access some services.
Mobile is also potentially far cheaper than existing telehealth solutions. Modern smartphones have more power than the laptops of only few years ago, so there is no need for expensive dedicated devices. Communications technologies such as Bluetooth allow construction of complex networks of devices. Global networks of 3G and 4G technologies offer sufficient cheap bandwidth for most applications. The mobile phone is virtually the thing that everyone, irrespective of wealth, has with them at all times.
What is mobile used for in practice?
Consistent data on the mobile health market is hard to come by, not least as nobody can really define what mobile health is and it is very difficult to separate the marketing hype from reality. A.T. Kearney has conducted several market studies for clients trying to understand the reality of the market. As well as traditional approaches of desk research and interviews, we have also reviewed the evidence base of published articles in learned journals, as most trials worth noting will inevitably end up being published.
The first thing to note is the exponential growth in study activity. Over half of all studies on mobile health have been published in the last two years (figure 1).
"It achieves co-location through technology, allowing patients and health professionals to interact without the need to be in the same place..."
Figure 1: Cumulative number of relevant mobile health publications.
Given the intrinsic benefits of mobile, you would expect the main applications to be in treatment of chronic disease, and this proves to be the case, with heart disease and diabetes the most popular. Wellness is also a major area, especially for consumer orientated companies concerned with the regulatory and clinic risk implications of more acute applications (figure 2).
Figure 2: Focus mobile health studies by subject area
It terms of what mobile is used for, this falls into a number of categories:
• Remote health and disease monitoring is the most popular application, and is also the source of much of the current innovation, in particular using technologies like Bluetooth to remote connect wearable sensors. Within this category, compliance monitoring is a significant sector.
• Education, in particular medical education – often sponsored by pharma companies - and basic health education in the developing world.
• Co-ordination of care, either through reminders to increase attendance or to improve co-ordination between health care professionals. In developing countries there is a big focus on medicines supply chain management and anti-counterfeiting.
• Assessment and intervention, either self-assessment in areas like obesity or diagnosis tools for health care professionals in areas like dermatology.
Looking at technologies, despite all the hype about smart phones, SMS proves to be remarkably effective and popular, especially for compliance. However, delays in publication mean that our analysis is inevitably out of date, and we expect to see the use of smartphones increasing dramatically over time.
Figure 3: Primary evidence map by technology type and purpose of intervention
"...the evidence that mobile makes a difference is quite weak, though much of this is down to simple methodological errors in the way evidence is gathered."
What makes a successful mobile health service?
Despite the increasing size of the evidence base and explosion in number of applications and devices, the evidence that mobile makes a difference is quite weak, though much of this is down to simple methodological errors in the way evidence is gathered.
The number of mobile health applications that are making money for suppliers or which have reached scale are even fewer. Reviewing those who have built successful business models, A.T. Kearney has identified three key success factors:
• A service which is able to engage with stakeholders across the health eco-system, health professionals, patients, carers, payers and providers.
• Robust evidence that the service delivers robust clinical outcomes at a lower cost to the system.
• If the service provider wants to make money, there must a defendable device or algorithm that allows revenue generation, and creates a barrier to follow-on imitators.
Unfortunately most current applications fail these tests and, in our view, are unlikely ever to become commercially successful.
What should pharma do?
Our work in this area has convinced us that, despite the undoubted hype, mobile is an important future channel for delivery of health services, and will in time have a big impact on how care is delivered.
Pharma companies are well placed to realise value from mobile health. They understand how to prove value in a health context, how to sell to health professionals and achieve re-imbursement, and they have the infrastructure to drive uptake. It makes pharma an ideal partner to drive the market. However, there is a bigger prize. Understanding how technology and chemistry can work together in the real word to add value will be major transformation for both R&,D and commercial functions, as well as challenging both regulators and payers.
"Understanding how technology and chemistry can work together in the real word to add value will be major transformation for both R&,D and commercial functions"
There are several plays that pharma will need to consider:
• For existing products, develop services to improve access, patient presentation, compliance, conversion and retention rates
• For new products, build the technology into the product itself through smart packaging and embedded services to capture a price premium by guaranteeing delivery of patient benefits and outcomes, increasing uptake and compliance
• Using technologies to enable direct fulfilment of patient and provider needs and to create a more secure supply chain
• Combining with social network technologies to mobilise and educate patient and professional communities
• Developing mobile enabled services as a stand-alone revenue earning business
Health systems increasingly wish to see evidence that innovative therapies add value in the real world, and appropriate targeting and compliance management will need to become part of the package. If pharma companies do not embrace the use of technologies to increase value of therapies, it is clear that others will.
About the author:
Jonathan Anscombe is a Partner at A.T. Kearney based in London where he leads the EMEA Pharmaceuticals and Healthcare practice jonathan.anscombe@atkearney.com
Michael Thomas is a Partner at A.T. Kearney based in London where he leads work with the Pharmaceutical Industry michael.thomas@atkearney.com
Will mobile health transform health delivery?
