Operating extensively within the digital healthcare industry, both as a start-up, as well as a digital marketing agency supporting global pharmaceutical companies has taught us that both have a need that the other can readily offer.
As pharma and consumer healthcare companies are quickly realising, the future of healthcare lies in the technologies of tomorrow. For digital healthcare start ups on the other hand, the opportunities to see their dreams realised have never been more exciting. So, how an why can both the pharma company and the start up make positive headway here.
The digital healthcare start up will have a wide variety of pressures, notably the need to quickly fund proof of concept right through to commercialisation before someone else steals your idea. It’s almost always survival of the fittest and most ambitious.
Many pharma companies have been slow to embrace digital healthcare to date, however things are changing, fast. Some of the most forward thinking pharmas are now fully recognising the potential opportunities to not only strengthening but also future proofing their businesses adding new revenue streams in the process.
From the digital healthcare start-up’s perspective
Even though healthcare encompasses an immense breadth of subjects, there are a growing army of entrepreneurs committing to developing tech in this space, making for a potentially very congested market where only the brave survive. As alluded to above, funding is always a big concern for many. Not only funding for operations, the tech itself, but also for the hugely important marketing aspects that will help realise your return.
Whilst there are many Angels and VCs with a healthy appetite for risk in digital healthcare right now, expect to give away a healthy slice of equity, which is normal of course, but potentially demotivating for the entrepreneur in the first instance. Now consider that this seed capital has allowed you to prove a concept, great, but you’ve now got to go looking for Series A, B & C funding just to commercialise, meaning even more equity diluted. Will this situation keep you motivated and for how long?
Now consider the pharma. There is also a lot to be said for leveraging a pharma company’s established healthcare processes and knowledge. Such issues as pharmacovigilence, regulatory requirements and government and payer reimbursement can be a heck of a mountain to climb for a small business, who’s focus is mainly invested in getting the technology right.
So for a moment, consider approaching ‘the right’ pharmaceutical company, pledging allegiance to them, getting the money you need, then realising your dream AND having access to the pre-define routes to a highly established market. Tempting eh!
From the pharmaceutical company’s perspective
A number of pharmaceutical companies are now taking the digital healthcare sector very seriously, they have to and are motivated for the following reasons:
Future proofing: The healthcare sector is changing at an alarming rate thanks in the main to those little devices we all can’t live without, our mobile phones and wearables. As our phones and wearable technologies become smarter with the help of A.I., so do the activities we can carry out with them. The general public are growing more dependent upon these technologies and rightly so, they can often improve our lives in growing degrees. Savvy pharma businesses are recognising this trend and are actively seeking collaborations with technologies that align to their patients to remain current.
Adding greater value to existing drugs: Digital healthcare apps and wearables can add far greater value to a drug – they can effectively help you combat and manage illness. Consider for a moment that a simple app on your phone can now tell you when you are most likely to be ovulating, your sugar levels are low, can help you combat Alzheimer’s, PTSD or perhaps act as a handy reminder for taking life saving drugs. Pharmaceutical companies have a unique opportunity to align their patented drugs to such technologies, providing a truly valuable addition to the patient’s life and potentially edging out the competition in relation to private and national health service spend.
Strengthen their market position: Stories about innovations, acquisitions and mergers in digital health are everywhere right now. As consumer’s we’re all fascinated about how these futuristic technologies can help us prolong our life. There’s almost something a bit Star Trek about it you could say. Investment in digital health will provide the pharma ample opportunities for publicity, and within the mainstream rather than just to specialist press.
Improve patient outcomes whilst attracting incredible talent: Innovations in digital health live and die (excuse the pun) by the value they provide the patients. The most successful digital healthcare start ups recognise this and align their digital offerings to this as a primary function. Therefore, your investment in such areas will be improving your patient outcomes, and far more quickly too. The entrepreneur driving the start up will likely have passion, focus and an unstoppable desire to realise their dream – a powerful resource for the pharma now and for the future.
Reduce the pressure on primary, secondary and tertiary healthcare: By giving the patient the tools and knowledge to partly or fully manage their ailment, you’re doing a good turn by both the patient and national health services’ primary, secondary and tertiary care systems. You’ll likely be taking away the dependence on these already stretched services, and without disrupting your own core drug revenues.
Big data: One of the key draws for a pharma business investing in digital health has to be the opportunity to access live data on a BIG scale. Healthcare apps in particular give you direct access to usage data, and in particular, Real World Evidence and a very exciting opportunity to understand drug effectiveness quicker than any other medium at the fraction of the cost of blind trials and the like. The upshot here is that as a pharma business you can look to always improve as well as get an insight into potential NPD.
Simplicity: Healthcare start ups are often nimble idea machines without the weighty protocols that slow so many pharma businesses down on the innovation front. Investment in start ups means you retain the systems that work so well, but your idea churn effectively speeds up massively.
New revenue streams: Digital health solutions are products in their own right and with careful positioning can command a premium, meaning an attractive new revenue stream for pharma businesses. These less heavily-regulated digital solutions typically cost a fraction of what a new drug would cost, making it an even more tempting investment. There are a range of digital tools that are being widely used by national health services, who recognise the benefits and are reimbursing accordingly.
Where to get started – the digital start up
By working with a pharma business, the digital start up is likely to be sacrificing an opportunity with the wider market, likely offering an exclusivity deal, but gaining the funds they require to prove their concept, then scale, as well as access a ready made patient base with a connected marketing and sales force.
Therefore, it’s time to get creative with your business model, then make sure the relationship delivers all you want it to before committing.
It’s also imperative that you explore and apply for your patents, otherwise you’re dead in the water. Protect yourself and understand exactly how this relationship will deliver on your original desires.
Where to get started – the pharma company
The right business model is also important for you. You need to establish whether one app or wearable alone will make a good product, or whether a combination of investments may make an awesome product.
There are plenty of resources to help establish what is hot in the digital healthcare space right now, so connect to these. Alternatively, what’s to stop you finding a talented innovation agency, sharing your problem, and challenging them to develop some ideas that could best support your existing business. It could be the start of a beautiful friendship, with you potentially holding more cards in the long run.
Finally, always discuss your innovations at idea stage with your sales and marketing teams to understand their saleability as well as potential revenues that can be driven from them. This process alone will give you an almost immediate understanding as to whether an idea/app/wearable is worth chasing down.
Orbital Media is a hybrid innovation and marketing agency heavily engaged in the digital healthcare market. With 5 of the top 20 pharmaceutical companies as clients, we’re well placed to not only deliver innovative solutions, but we’re also experienced at commercialising and brand building.
We’re highly engaged within the healthcare sector developing Virtual Reality, Artificial Intelligence, social media sourced Real World Evidence as well as managing the marketing of global OTC brand portfolios with values well in excess of over £1bn.
We are interested in talking to you if you are a digital healthcare start up, or alternatively if you are a pharmaceutical business. Contact us.