The healthcare startup scene is teeming with digital health innovations—novel solutions that tap technology to deliver care to patients or provide information to patients, providers, and payers. These solutions can dramatically improve outcomes, drive down costs, or boost efficiency. It’s no wonder that many stakeholders are enthralled with the potential of digital health solutions to radically reshape the healthcare landscape.

While most healthcare stakeholders are eager to embrace digital health, the pharmaceutical sector has been somewhat reluctant to join the digital health bandwagon. Some of the forward-thinking pharma companies are just now awakening to the opportunity for digital health to strengthen their businesses.

For pharma companies to realize digital health’s potential as quickly as possible, they should seek out and partner with technology startups focused on digital health innovation. Savvy startups should be receptive to these collaborations, as there are major benefits to them from working with pharma.

Digital health – a strategic opportunity for pharmaceutical companies

Forward-thinking pharma companies are finding many reasons to incorporate digital health solutions into their portfolios. By embracing digital health tools alone or in combination with medications, pharmaceutical companies can:

  • Improve outcomes: In the next few years, drugs will be paired with apps and digital services to deliver complete health solutions to patients and improve outcomes. An early example is Novartis’ proposed combination of home-based telehealth remote patient monitoring with heart-failure medications. By tracking patients’ weight gain caused by fluid retention and intervening early, this digital-drug combo can stave off expensive trips to the emergency department.
  • Build connections to patients. Digital health solutions can help pharma develop direct relationships with patients through more seamless digital communications and, critically, through medication adherence tools. A recent example: Boehringer Ingelheim partnered with Propeller Health to provide digitally-enabled inhalers along with asthma medication. These “smart” inhalers collect, record, and transmit data about environmental conditions and medication usage. Furthermore, this type of real-world data can provide additional insights into the patient experience and can assist pharma companies in developing new and better therapeutics.
  • Lead to new business opportunities. Digital health solutions can become new product lines, providing welcome additional business opportunities for pharma. Highly-scalable and less heavily-regulated, digital health solutions can be developed and brought to market in a fraction of the time—and at a fraction of the cost—of drugs.  And payers are willing to reimburse for digital health solutions that demonstrate value for patients and improve outcomes. For example, WellDoc’s digital diabetes therapy is reimbursed in the US. And Gaia’s digital anti-depressant is being reimbursed by European payers.
  • Strengthen branding. Because digital solutions can make traditional therapies more effective or convenient, patients will choose combination drug-and-digital therapies over drugs alone. For example, drugs for pain management that accompany solution like Neurometrix’s Quell for digitally managing pain will be far more popular than drugs sold alone. Comprehensive digital health solutions can enhance and differentiate a pharmaceutical company’s brand.

Why pharma companies should court digital health startups

As with many disruptive innovations, digital health requires the development of novel business models and partnerships to succeed. The most effective way for pharmaceutical companies to achieve these benefits is to partner with multiple, compatible digital health startups, and to have these startups build innovative patient and provider-facing digital health solutions on behalf of their pharma partners.

Why? To begin, tech-savvy, entrepreneurial startups with a consumer bent are better at developing the type of user experience consumers expect than large, complex, process-oriented firms that develop and market drugs are.

Because of their small size and organizational simplicity, digital health startups can move more quickly than pharma, developing products in months rather than years. For example, the software prototype underlying the startup Neuromotion Lab’s digital health solution for emotional and behavioral regulation in kids only took a few weeks to develop.

In addition, startup companies are not encumbered by the ponderous processes, rules, and regulations that slow development initiatives in pharma. Relatedly, they are also not subject to the same degree of regulatory scrutiny. For example, they can talk freely to doctors and patients—the parties who will end up using the digital health solutions. This is particularly useful outside the US and New Zealand where direct-to-consumer drug promotion and communication by pharma companies is banned.

Why savvy digital health startups will be receptive to pharma

When pharma comes courting, a savvy digital health startup should be receptive. It can benefit enormously by working with a drug company. One of the biggest benefits: access to a pharma company’s substantial sales and marketing networks. Selling products into the healthcare system can be extremely difficult because of the wide variety of physician practice models and healthcare procurement processes. Startups often lack the infrastructure needed to reach customers and, therefore, have trouble scaling up sales. Many fail as a result. Teaming with pharma and tapping into their extensive marketing infrastructures and distribution channels will help digital startups gain traction far faster than they could on their own.

Digital health startups also can benefit by leveraging and learning from pharma’s well-established processes around healthcare industry-specific details such as managing regulatory requirements, CPT coding, and government and payer reimbursement. There’s no need for digital health startups to reinvent the wheel. They can simply partner with pharma!

By working together, pharma companies and digital health startups can leverage their complementary strengths and accomplish what neither can alone.

Which pharmas will embrace partnerships?

Innovative pharmas that commit to digital health partnerships will realize first-to-market advantages and long-term success. But, pharma/digital health startup relationships are still new to many. It remains to be seen which pharmaceutical companies will do more than flirt with digital health pilots or partnerships and fully commit to exploiting all the potential digital health has to offer.

So, don’t be shy. Get out there, pharma, and take advantage of the benefits digital health startups and pharma collaborations can offer.

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