Digital love

The prospect of a global recession is fast becoming a fact of everyday life, impacting everything from jobs in technology to interest rates. In response to the tougher economic conditions, digital health companies are evolving their experience offerings and business models, hoping to prove their value in saving lives and saving money.

A recent Grand View Research (GVR) report predicts that the global digital health market will be worth US$1.5 trillion by 2030, equating to a remarkable 27.7% Compound annual growth rate. Summing up, GVR said the coronavirus pandemic had triggered a wave of innovation that has resulted in “a surge in virtual care, mHealth platforms, healthcare IT systems, telehealth and wearables”.

Yet, despite GVR’s robust growth trajectory, health tech innovators are increasingly required to prove that their products and solutions can deliver real-world, scalable businesses. As a result, as Forbes notes, venture capitalists are ‘tightening their funding terms, revising valuation thresholds and seeking a pathway to profitability’.

So, what are the implications for pharma firms eyeing digital innovations for the rest of 2023? Here are four key insights to bear in mind:

1. Digital health will need to prove its business case
If 2022 was about patient-centricity, this year, pharma companies will need to provide data-driven evidence that digital solutions meet patient needs while aligning with business targets.

Influenced by a growing realisation that quick-win tactics such as chatbots aren’t the answer in isolation, leading pharma and healthcare companies are increasingly adopting a product mindset.

This approach involves zeroing in on what delivers measurable value for the patient and the business. It also requires real-world evidence obtained from market research and user testing to support the business case and to help design programmes and solutions that are value-focused and data-driven.

This renewed emphasis on proving the business case is part of a cultural shift in pharma away from a large volume of tactical projects towards a focus on quality. It’s no longer enough just to pursue the coolest tech idea; the emphasis is on performance. Pharma companies are already investing heavily in data infrastructure and processes needed to drive value propositions.

Going forward, they need to harness the insights from this data and put the right plans and budget in place to create effective digital-first programmes that deliver for patients and the business.

2. Digital Therapeutics (DTx) go all in on adherence
Pharma is entering the DTx space at an impressive speed, either by creating DTx divisions or partnering with DTx firms. A 2022 report by SMR predicts the market will be worth US$35bn in 2030, up from US$2.3bn in 2020. Tapping into this trend, Germany and France have launched initiatives aimed at fast-tracking and approving health apps without relying on lengthy clinical trials.

Instead, companies launching health apps are now able look to other reliable methods of delivering real-world evidence of their efficacy. The German and French initiatives also allow doctors to prescribe health apps to patients with various conditions with costs covered through health insurance.

Meanwhile, the WHO in Europe has launched a digital health action plan, which aims to help countries accelerate digital transformation for better health and align digital health tech investment with health system needs.

With governments and the WHO taking these monumental steps, digital therapeutics have a much better chance of reimbursement, meaning patients will have a better chance of accessing and affording the solutions. In addition, when more patients are using the solutions, pharma companies have greater real-world evidence to demonstrate the success of the programs.

So far, early DtX winners appear to be solutions designed to help patients with medication adherence. However, with regulatory burdens easing, organisations are increasingly well placed to make DTx part of a preventive and predictive healthcare model. At the same time, there’s room for DTx to impact tackling mental health and behavioural change.

The take-out for pharma companies when it comes to Dtx is to be cautious about creating DtX solutions internally as these require a different skill set and business model from the way most pharma companies operate.

Equally, when it comes to partnerships, pharma companies need to be smart and understand that health start-ups tend to operate differently and on faster timescales. They need to ensure joint projects are small to start with and can deliver measurable results and have clear contracts and resources in place to support the partnership.

3. Content plans will have a mental wellness component
Exacerbated by COVID-19, mental health has become a massive healthcare crisis for countries worldwide, with depression and anxiety both on the rise. Worryingly, evidence suggests that many people are not getting the support they urgently need.

Systemic failure opens up an opportunity for pharma to provide digestible and relevant mental health information – via remote offerings. There is also scope for pharma to engage in partnerships around advocacy and toolkits. Leading companies in this space include Big Health via its Sleepio and Daylight platforms.

One area that merits exploration is the connection between mental and physical health. For example, digital therapeutics company Twill has demonstrated that mindfulness and mental health offers can effectively alleviate some debilitating MS symptoms. The potential benefits include reduced dependence on medication and less time spent with healthcare professionals.

Echoing earlier points, pharma companies must ensure that content plans add value. Pitfalls to avoid include offering links from the pharma website to third-party sites (which can lead to irrelevant support) rather than providing patients with first-hand personalised, relevant advice.

4. Personalisation programmes will finally start to get personal
From mobiles and AI/machine learning to sensors/wearables and 5G, a wide range of tools can now deliver a personalised healthcare ecosystem. With data and a product mindset leading the way, 2023 will see robust personalisation programmes that offer end users relevant content and resources in a frictionless way. Omada Health, which provides ongoing, personalised care for people with chronic conditions, is a good example. The average Omada member interacts with the platform 30 times a week.

Despite concerns about data privacy, there is undoubtedly user demand for personalisation. For example, a survey from Redpoint showed that 75% of patients want deeper personalisation in healthcare, while 61% would visit their healthcare provider more often if the experience was personalised.

Personalised video, chatbots and hyper-targeted ads can drive the shift towards digital-first, personalised, patient-centric healthcare. Meanwhile, data visualisation can help healthcare providers extract actionable insights from the mass of information pushed their way.

For companies new to this area, the key is to have realistic starting goals – then evolve based on successful outcomes. The grander vision, however, is to create a sophisticated personalisation model that can pre-empt patient needs – alleviating pressure on the system.