Building a 21st century healthcare ecosystem

Digital health start-ups are maturing and in doing so adding to the ‘biodiversity’ of the healthcare ecosystem
Silicon Valley’s advances in computing power, mobile technology and social connectivity are seeing it turbo-charge the speed of digital health developments
To fully take its place within today’s healthcare ecosystem, the pharma sector will need to keep redefining its model

As healthcare and the pharmaceutical industry redefine their roles for the modern age, health tech is radically altering the environment for all stakeholders, finds pharmaphorum’s Dominic Tyer

From mobile apps to big data to artificial intelligence, disruptive technologies are being harnessed by start-ups, health systems and pharmaceutical companies to create an ecosystem that is fundamentally changing the way healthcare is delivered.

Underpinning these developments is an increasingly buoyant investment scene. In the first half of 2018 venture capital funding for digital health hit a record $4.9 billion, a 22% increase on the first six months of the previous year, according to Mercom Capital Group.

Raj Prabhu, CEO and co-founder of the global communications and research firm, said: “The space is maturing and is beginning to get the regulatory attention it deserves. Simultaneously, the tech giants are boosting digital health in a big way. M&A activity was also up, and overall, it was a very robust first half of 2018 for digital health companies.”

Headline-grabbing M&A deals during this period included Platinum Equity’s acquisition of LifeScan for $2.1 billion, Flatiron Health’s $1.9 billion acquisition by Roche and Inovalon’s purchase of the ABILITY Network for $1.2 billion.

In pharmaceutical circles it was the Roche/Flatiron agreement that drew the most comment. The New York-based start-up focuses on oncology-specific electronic health record software, linking this with the development of real-world evidence for cancer research – offering digital health innovation as a way for Roche to sharpen its research efforts.

Also noteworthy were the Swiss pharma company’s comments that it would take a relatively hands-off approach to working with the start-up and allow Flatiron to continue working with its existing partners and even retain its independence.

Roche Pharmaceuticals’ CEO Daniel O’Day said at the time: “This is an important step in our personalised healthcare strategy for Roche, as we believe that regulatory-grade real-world evidence is a key ingredient to accelerate the development of, and access to, new cancer treatments.

“As a leading technology company in oncology, Flatiron Health is best positioned to provide the technology and data analytics infrastructure needed not only for Roche, but for oncology research and development efforts across the entire industry. A key principle of this is to preserve Flatiron’s autonomy and their ability to continue providing their services to all existing and future partners.”

This principle is one that can increasingly be observed across the pharmaceutical industry. Companies have, over the years, shifted from short-lived attempts to make their own digital health solutions, to working on an exclusive basis with those that have their own solutions, to acknowledging the benefits to themselves – and the wider ecosystem – of sometimes stepping away from traditional ‘command and conquer’ approaches and following a more collaborative line of thinking.

Doing so enables the likes of Roche – as well as Bayer, Pfizer and Novartis, to name but a few – to generate goodwill within the ecosystem and, increasingly, establish their own networks of start-up collaborators and potential partners.

Pharma companies are clearly aware they may sometimes come with a certain amount of reputational baggage, so it makes sense to tread carefully and nurture opportunities, encouraging start-up innovation in a non-intrusive and collective fashion.

“As an industry, we need to understand patient needs in order to innovate our own products. In addition, we can help drive the innovation from a grass roots level in terms of fostering start-ups,” one senior executive who leads a major pharmaceutical company’s digital health partnership efforts told pharmaphorum.

A big boost from the tech giants

Digital health has long been an obviously neat fit for pharma and healthcare systems as they look to IT advances to improve traditional approaches to the application of medical science. But the last decade’s advances in computing power, mobile technology and social connectivity has also seen Silicon Valley turbo-charge digital health developments. In the process the likes of Google (or Alphabet if you prefer), IBM, Microsoft and Apple have brought a tech sensibility to development that has almost forced the wider healthcare sector to speed up, in the process revolutionising the way we think about healthcare.

Rather than a distinct technology sector and a distinct health sector, the convergence between the two has created an increasingly ubiquitous ecosystem that’s ultimately working towards a common goal. In doing so it builds bridges between the two fields, as well as between provider and consumer, in almost all facets of the healthcare environment.

Re-defining pharma’s role

The 21st century healthcare ecosystem is breaking down silos between different sectors and types of companies to produce an environment that is fixed on providing a more effective, more complete service to all health stakeholders, from patients to prescribers to payers.

For pharma too, playing its part within this evolving ecosystem represents a moment in time in which it can re-define its approach, support new innovations and move from a traditional ‘medicines manufacturer’ role to a more holistic, care-providing service – one that mirrors the shift in doctor-patient relationships to becoming partners in healthcare.

For all of the sector’s talk about the need for ‘beyond-the-pill’ initiatives, this shift is not something the industry as a whole is yet used to. For some companies it will mean working outside of their comfort zones, but there’s a lot to be learnt from this generation of health tech start-ups.

Dominic Tyer is a trained journalist and editor with 19 years of pharmaceutical and healthcare publishing experience. He serves as a contributing editor at pharmaphorum media, which facilitates productive engagement for pharma, bringing healthcare together to drive medical innovation. He is also creative director at the company’s specialist healthcare content consultancy, pharmaphorum connect.

Don’t miss your complimentary subscription to Deep Dive and our newsletter