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Connected Health: Capturing Digital Opportunities

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Filip Van Elsen



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Nigel Parker



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05 June 2014

At the start of 2014, Neelie Kroes, head of the European Commission’s digital agenda, remarked that “virtually every business is a digital business now”.

Her comment has been echoed by many market participants who have predicted that we are seeing the first wave of large traditional companies leveraging digital platforms and tools to drive growth and innovation. These companies are backed by deep resources, and have enormous scale and process discipline. They are making a push to transform themselves from followers to leaders in digital — from the ‘disrupted’ to the ‘disrupters’. The healthcare industry will be transformed by the emergence of digital technologies.


The market

The model for healthcare delivery has historically been ‘high touch’ and focused on those who could pay – patients have involvement with medical experts who often deliver services within silos of care. Payment models in healthcare have frequently offered few financial incentives for healthcare providers to improve performance, and information that might lead to such improvements has not been shared.

Within the pharmaceutical sector, innovative companies continue to require massive investment to sustain their research and development programmes. Profits from blockbuster drugs have historically been a route to facilitating investment but the margins on these products are being eroded. Meanwhile, the healthcare needs of ageing populations in developed nations and new middle classes in developing countries have soared.

These market factors create significant pressure for the healthcare industry but also provide a great opportunity for the development of new business models.

For pharmaceutical leaders who have previously focused on ‘selling the pill’, the question is how to develop new competencies ‘beyond the pill’. Can digital innovation enable pharmaceutical companies to engage with patients (a) before the pill is prescribed to ensure the right treatment is matched to the right patient, and (b) after the pill is prescribed to be part of the patient services that help to deliver the best outcome after the medicine is used?

Digital technologies also have a role to play in honing existing operational models and creating new ones.

With technological innovations, however, come new legal considerations. Pharmaceutical companies need to find ways of embracing new opportunities without compromising their legal and regulatory compliance. This process requires a varied toolkit, which includes ensuring that management approaches these areas in a consistent way; that policies and procedures are up to date and fit for purpose; and that all those whose daily jobs are impacted by new technologies have the training they need to benefit from these developments, without creating new risks for the company.

Engaging with patients

Many healthcare professionals recognise that patient engagement is a critical factor in driving positive healthcare outcomes. Engagement can be facilitated by a range of digital tools. These include:

  • Social media. A January 2014 study by the IMS Institute for Healthcare Informatics found that nearly half of pharmaceutical manufacturers are now actively using social media. While a lack of regulatory guidance is still some cause for concern, lessons from the FMCG world show how essential applications like Facebook, Twitter, YouTube and Pinterest can be in providing information and engaging stakeholders in dialogue. Social media is also a valuable way of building engagement within an organisation and of encouraging collaboration and innovation.
  • Applications. A March 2013 report by Research2Guidence concluded that there were 97,000 healthcare applications or ‘apps’ available to download on the two major operating systems. These apps range from information only tools to those that can be connected to sensors to turn smartphones into devices that are able to monitor vital signs. Regulatory approaches vary depending on the purpose for which the app is intended.
  • Gamification. This fascinating trend involves applying game design techniques and mechanics to ‘real life’ applications in order to make them more engaging. Many pharmaceutical companies are leveraging this trend, particularly to engage younger patients. An example is ‘Monster Manor’ which is aimed at children with Type 1 diabetes. This online game encourages children (and their parents and carers) to enter and monitor all of their diabetes information. Every time children enter their BG information into the app they are rewarded with a piñata to crack open in Monster Manor. Piñatas hold all sorts of fun. In addition to rewarding kids, parents are provided with insights, strategies and a tool to support their child’s health management efforts.
  • Wearables and smart sensors. This trend is part of the broader trend known as M2M communication, or the ‘internet of things’, and has huge potential for the healthcare sector. For example, connected, wearable technology could supplement static patient wristbands to provide more reliable data on patient processing, as well as information about medication, assessments and diagnostics.

Developing new business models

Digital innovation is also a driver for efficiencies within pharmaceutical companies. Many of today’s digital trends help companies to refine processes and develop leaner and more streamlined operating models. For example:

  • Big data and advanced analytics. Advances in computing power, combined with the ability to interrogate different types of data (including unstructured data), have created new potential for data-driven drug discovery. Big data techniques can also provide pharmaceutical companies with a greater understanding of other aspects of the operation of their businesses, leading to faster and more efficient supply chains, as well as improved marketing and manufacturing processes.
  • Cloud computing. Pharmaceutical companies were not typically among the early adopters of cloud computing but that has begun to change. Organisations have now become more comfortable with the regulatory environment and have seen first-hand the scalability, flexibility and responsiveness that can be achieved with cloud computing. One area that companies are exploring is the use of cloud-based platforms for clinical data aggregation and reporting. These arrangements are designed to improve collaboration with clinical research organisations and regulators when operating clinical studies. Cloud solutions are also being used to facilitate the hosting and analysis of big data sets such as data created by gene sequencing. Again collaboration between multiple parties in different locations and on different IT networks (eg academics and in-house researchers) is often a driver.
  • 3D printing. Early uses for 3D printing in the healthcare sector focused on creating prosthetics, dental fixtures and hearing aids. Howver 3D printing is now being applied to much more complex structures, including human tissue.
  • Cybersecurity. This should be an area of focus for all pharmaceutical companies because all corporates are potentially vulnerable to having their operations disrupted by a cyberattack. However, recent draft guidance from the U.S. Food and Drug Administration (FDA) has caused manufacturers and others involved in the device industry to also examine the possibility of cyberattacks that may directly endanger patients by being targeted at medical devices.
  • Open innovation and crowdsourced research. Traditional pharmaceutical companies have relied on research and development (R&D) conducted by their employees to create intellectual property rights that were owned by the employer. Injections of new ideas have come in the form of licensing programmes or through acquisitions. In an open innovation environment, R&D is deconstructed and collaboration (at least on certain aspects of the R&D cycle) with external parties is encouraged. An increasingly popular route to reward innovation is by identifying a task and offering a prize to the person who completes the task first or who reaches the best result. Numerous third-party platforms facilitating this type of approach have been launched.

For a copy of our full research paper exploring four digital opportunities in more depth and considering some of the potential legal and regulatory challenges associated with their adoption, please contact Rose Hall on +44 (0)20 3088 3618.

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