This article is based on our recent HealthXL webinar in which Jim O’Donoghue, President, S3 Connected Health, Justin Wright, Global Head Connected Health (VP), Novartis, John Rondoni, Chief Technology Officer, Inspire Medical Systems, and Chandana Fitzgerald, HealthXL, discussed the common opportunities and challenges facing pharma and medtech companies adopting digital health solutions, and what pharma can learn from medtech to take digital health initiatives beyond concept and pilot to achieve scale.
Digital health has traditionally been considered a more natural fit for medtech than for pharma. It is deeply integrated into their core product and increasingly necessary for their medical devices to stay relevant in a digital world, and so medtech companies have been recognizing and responding to that. Conversely, in pharma, digital health is viewed more as a nice-to-have service that can complement its core product. But this perspective undervalues the true potential of digital health solutions; their ability to generate evidence and learnings that can be applied to improve therapies across multiple disease areas.
So, let’s explore what the pharmaceutical sector can learn by looking at their counterparts in medtech and how they use digital health solutions to transform their overall offering.
Digital health solutions offer both pharma and medtech the opportunity to improve patient experiences and outcomes, provide clinical efficiencies, and offer real-world data and proof of efficacy that many payors require. In doing so, they allow pharma and medtech to create services that differentiate their product within their core market by going beyond the traditional offerings for various therapies.
They also provide both sectors with real-world data that offers invaluable insight into the actual experience of patients on various therapies and how that impacts outcomes. This allows them to tweak solutions as needed based on the insights garnered from patients in the real world to help support adherence to treatment plans.
Alongside these opportunities, there are some shared challenges. Venturing into the digital health space requires significant development of new organizational capabilities for both pharma and medtech. Although medtech companies have the technical skills required to add connectivity to their devices, they may lack the expertise required in cybersecurity or regulatory requirements. While pharma companies are accustomed to developing and launching drugs, they face a learning curve in developing and bringing digital health solutions to market and securing their adoption.
In a digital world, the expectations of patients and clinicians of medical devices often align with the capabilities of the technology medtech companies can provide. They are responding by integrating digital solutions into their core product, at a minimum adding connectivity to their devices, and in often cases extending beyond the device and building comprehensive digital health solutions around it. Therefore, it is usually incorporated into the R&D roadmap and evolution plans for their product.
In contrast, for pharma, digital health solutions primarily exist to enhance the patient experience, making it more of a nice-to-have rather than a core focus. Consequently, digital health initiatives struggle from not always having clear ownership within a pharma company, with placement ranging from commercial teams to brand or franchise teams. Because the initiatives are not seen as an integral part of the main product and don’t have a dedicated team driving them, they face frequent reviews, a constant need to prove their value, and can often be the first thing to go when pharma companies need to make structural changes.
Pharma needs to adopt medtech’s mindset shift of seeing digital health as a ‘must-have’. In fact, it can be argued that the need is even stronger for pharma than it is for medtech. While clinicians traditionally rely on the evidence built up from clinical trials in their decisions to prescribe various therapies, pharmaceuticals are complex products, and whether they work for individual patients depends on numerous factors – genetics, patient behaviors, and external environments. They must seize the opportunity to use digital health solutions to monitor, track, and improve patient experiences and outcomes.
But entering the digital health space requires pharma to transition beyond their traditional product offering of pharmaceuticals to information and insights. The degree of complexity that emerges from that is not insignificant and should be acknowledged. As discussed above, it involves a different set of organizational capabilities, but it also requires a clear strategy to manage this change in what they are producing to ensure buy-in across multiple internal stakeholders.
One of the main challenges lies in clearly demonstrating value. Digital health solutions cannot deliver the same or even similar margins as pharmaceuticals. If the business case as to why the company should be making a multi-year investment into an initiative that will not produce the margins pharma is used to, then the initiative won’t be sustained. Value in around-the-pill or above-the-pill solutions may need to be shown in other ways, and often that value will take a long time to prove; so, it is important to have interim milestones in the lifetime of a digital health project to keep stakeholders invested.
Therefore, launching digital health projects just for the sake of it will never be successful. Medtech undertakes frequent analysis projects to thoroughly comprehend the patient and clinician ecosystems and identify how their challenges and concerns can be resolved with interconnected digital solutions. Pharma should undertake similar studies to ensure their digital health initiative meets a real unmet patient, clinician, or business need and will impact the core business revenue.
Effective planning from concept to adoption to scale is crucial. Often, too much focus is placed on the initial concept and the primary research carried out to validate it without proper consideration for strategic planning on successfully entering the market and ensuring scale. In reality, inadequate planning for the transition from product existence to widespread adoption remains one of the biggest reasons why digital health projects fail.
As shown, there is a high degree of complexity involved in developing and bringing to market a successful digital health solution, from regulatory, data management, go-to-market strategies, and reimbursement strategies. These are not areas that pharma and medtech necessarily specialize in, and with so many new capabilities to attain, this needs to be done as efficiently as possible, with learnings shared not only across the industry but also within large companies.
Collaboration with digital health partners and leveraging digital health platforms can be one of the most effective ways of doing this. By partnering with specialized digital health companies, pharma, and medtech can tap into their expertise, access broader networks, and leverage existing infrastructure. Utilizing digital health platforms expedites the implementation and scaling of digital health initiatives. In addition, such collaborations can facilitate the development of robust digital health solutions that seamlessly integrate into existing healthcare systems.
To learn more watch our webinar with Jim O’Donoghue, President, S3 Connected Health, Justin Wright, Global Head Connected Health (VP), Novartis, John Rondoni, Chief Technology Officer, Inspire Medical Systems, and Chandana Fitzgerald, HealthXL.