Just in time for Valentine's Day: biopharma + digital health?

Article Highlights

  • There’s the money thing: pharma is able to charge a lot for drugs that eventually make it on the market

    Tweet This

  • Huge opportunity for digital companies that are keen to robustly demonstrate health benefits

    Tweet This

  • If history is any guide, most biopharmas will embrace digital health as a meme and a marketing term

    Tweet This

Biopharma – especially big pharma – gets all sorts of grief for being large, stodgy, and unable to innovate (or evolve); this Corey Goodman interview represents the perspective well.

Before writing off these companies entirely, however (an ignorant reaction in any case), it’s important to consider how much experience they have in doing two very difficult, very important things: (a) documenting the medical value of their products through a rigorous series of clinical studies conducted in a highly regulated environment; and (b) navigating their way through a complex maze of stakeholders in order to successfully market their products.

"If history is any guide, most biopharmas will embrace digital health 'as a meme and a marketing term', but will proceed extremely cautiously." -- David Shaywitz

Much of the difficulties facing the industry these days stem not from their lack of regulatory experience or marketing skill, but rather from the intrinsic value proposition of the products they offer; simply put, making an impactful new drug is extremely hard and quite expensive, as Matt Herper’s recent piece makes clear.

My sense is that the view from the digital health/start-up side is in many ways the mirror-image of this: the space seems to be brimming with promising nascent ideas; yet, as I’ve discussed before, the measurable health impact of these technologies is usually unclear (at best).

Some emerging digital health companies don’t worry about this – they are deliberately seeking to circumvent the regulatory process by aiming directly at consumers, and avoiding explicit health claims.  Others seem to be leaning pretty heavily on the concept of being so disruptive that, in effect, the world will change for them.

I’d suggest that there still is a huge opportunity for digital companies that are keen to robustly demonstrate health benefits, at the high level of rigor that is standard in the medical products industry.

Looked at from this perspective, it seems there should be an opportunity for convergence here, a way to combine big pharma’s experience in demonstrating clinical significance and value to stakeholders with digital health’s likely (if unproven) ability to develop novel products that might make a difference.  Perhaps digital health start-ups are creating the impactful health products that pharma so desperately seeks – but just not in a form pharma is prepared to see and able to handle.

And yes, there’s the money thing: pharma is able to charge a lot for drugs that eventually make it on the market – but again, this is proving to be the vanishingly rare exception.  It’s hard to see how you couldn’t make a business out of a digital health innovation whose worth you are able to robustly demonstrate – and demonstrate at a cost likely to be much less than that of developing a new drug, probably at much lower risk, and also with the opportunity to adapt and refine your approach along the way, in a fashion not really possible with a traditional drug.

One final thought here:  not only do I believe this convergence is coming, but I’m going to go out on a limb and predict that the early adopters here will be generics companies like Teva (I’ve no relationship with this company), both because they’ve historically been more inventive, and because they are in a good position to readily apply some of these digital technologies to their existing products, a logical intermediate step in the evolution that may occur.

Right now, generic companies are competing primarily on cost, yet one can imagine that by bundling the appropriate companion technologies to their products (e.g. technologies that improve and document adherence), they might conceivably be in a position to make more aggressive efficacy claims, to demonstrate to stakeholders that they are delivering greater value, and ultimately command somewhat higher pricing, yet still below the cost of new, branded products.

If history is any guide, most biopharmas will embrace digital health “as a meme and a marketing term,” to borrow Steve Lohr’s wonderful turn of phrase (see here), but will proceed extremely cautiously.  I suspect that the intrepid biopharmas that truly see the opportunity (and threat) here, and realize they need to figure this out, will be rewarded – assuming they are able to brave the learning curve, and embrace and learn from their inevitable mistakes.  I imagine their new-found start-up colleagues could probably give them a little useful advice about getting to Plan B.

Dr. Shaywitz is an adjunct scholar at AEI.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

David
Shaywitz
  • Dr. Shaywitz trained in internal medicine and endocrinology at MGH, and conducted his post-doctoral research in the Melton lab at Harvard. He gained experience in early clinical drug development in the Department of Experimental Medicine at Merck, then joined the Boston Consulting Group’s Healthcare and Corporate Development practices, where he focused on strategy and organizational design. He is currently Director of Strategic and Commercial Planning at Theravance, a publicly-held drug development company in South San Francisco. He recently wrote Tech Tonics: Can Passionate Entreprenuers Heal Healthcare With Technology? 

  • Email: davidshaywitz.aei@gmail.com

What's new on AEI

image The Census Bureau and Obamacare: Dumb decision? Yes. Conspiracy? No.
image A 'three-state solution' for Middle East peace
image Give the CBO long-range tools
image The coming collapse of India's communists
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.