While the healthtech sector has evolved significantly in the past few years, 2023 looks set to be another year of significant change. Mass layoffs in tech , inflation across major geographies, changing customer needs and finally multiple reorganisations in the life sciences industry signal the need for rethinking how Pharma organisations can succeed with digital health in the short and long term.
Looking back at Pharma’s journey with digital health so far :
- Pharma’s digital health ventures have not generated a return on investment (ROI)
- Initial forays concentrated on ‘testing’ and ‘piloting’ isolated digital health innovations, the focus soon shifted to more advanced and riskier explorations.
- Innovation wrapped around the drug has become the object of budgetary scrutiny in pharmaceutical companies.
- Misalignment on which customer problems to address and what value drivers to focus on has led to setbacks.
Looking ahead, going back to basics and figuring out the fit with digital first and foremost will reset pharma on the right track. Through conversations with industry leaders across Pharma organisations, we have identified 5 components of a framework to guide pharma in asking the right questions in digital health.
At our Global Gathering in Munich, startups, pharma, and investors split up into several roundtables, tackling the several topics. Here is what we learned.
#1 Reflections & learnings from pilots and experiments so far
Pharma is usually seen as a more straightforward route to market that can provide the startup with access to HCPs and patients. However, there are no successes at scale. This can be attributed multiple factors:
- Product-market fit : Innovation for the sake of innovation vs. innovation that solves true patient pain points.
- Pilot vs long term scale: Lack of long term vision usually results in short term pilots that cannot scale and misalignment in short term expectations.
- Need to demystify digital health: There is general excitement around digital health in pharma, but there is a lack of understanding around how digital health products can be launched and scaled. Teams are often fixated on the technology and not the unmet customer needs.
- Traditional frameworks for innovative solutions: Traditional drug molecule commercialisation frameworks cannot scale agile technologies.
- Internal stakeholder alignment: There is often internal stakeholder misalignment on expectations from digital health solutions. Digital health solutions are often expected to have easy adoption and major returns in the short term.
- Lack of agile processes: Pharma’s complicated internal processes make it impossible for digital solutions that require iterative approaches to thrive easily.
#2 How can you build better foundations for digital health in pharma?
To succeed with digital health, pharma organisations are yet to build proper foundations that can enable digital health solutions at scale.
- Design for the end user: Solve for true consumer pain points and always consider the context of implementation before selecting a potential digital solution for your therapy area.
- Value to core portfolio: Align with internal stakeholders on the short term and long term value to the core portfolio.
- Senior leadership commitment: Ensure there is long term commitment from senior leadership and dedicated budgets based on key milestone achievements.
- Evidence based decision making: Look for clinical validation and commercial viability while considering digital health solution partnerships.
- Capability building : Train and support internal teams to understand complexities around digital health solutions. Provide frameworks for them to select, launch and measure progress with digital health solutions
- Build proof points: At every stage, build proof points that can signal confidence from pilot to scale capabilities.
#3 Making decisions for success in Short vs Long Term
Most life sciences companies look for short term results, and it will be hard to convince organisations on the longer term potential unless there are short term returns. It is important that we find a balance between focusing on the short term results without losing sight of the long term opportunities.
Technologies that are the most viable bets in short vs long term: AI in drug discovery and other research focused technologies have established potential value for Pharma’s pipeline. In the short term, clinical research based technologies may have easier acceptance. Digital therapeutics and other HCP facing solutions are yet to overcome market maturity barriers and truly succeed at scale. For pharma, DTx may still be a long term play.
Better approaches for short vs long term:
- In the short term, the biggest focus is to find the right fit for your portfolio. To determine the best fit, keep the end user pain points and needs at the centre.
- Once you determine the fit, aim for value creation in the short term and choose KPIs like downloads, engagement etc. to guide your initial milestones.
- Develop proof points at early stages that signal towards the potential for scale. Consider market maturity, integration and interoperability as you design your KPIs and proof points.
- Unlike a drug launch, a digital solution launch is more iterative in nature. Ensure the right processes, internal alignment and resources to enable an iterative approach.
- In the long term, evaluate the right business models for scaling digital solutions. Traditional pharma business models may not be suitable for succeeding with digital solutions in the long term.
#4 Building the right resources for success in digital health
- Educating cross functional teams: Increase awareness among Compliance/ Legal/ Regulatory teams in pharma about SaMD. Internal cross functional teams are experts with drug related regulation frameworks. Digital health solutions are regulated as medical devices and it is an increasingly changing landscape. Continuous education along with exposure to real-world cases and challenges is important to ease internal processes.
- Nurture digital capabilities: Embed digital health awareness and capabilities into core functional and commercial teams.
- Shared goals and shared accountability: Digital innovation needs to be an enterprise-wide goal. Teams across the organisation need to have measurable KPIs relevant to their profiles and accountability to enable innovation.
Access the full Global Gathering report here, which includes:
- Working group results on selection of digital measurement solutions
- Key learnings on ‘A New Modality for DTx’ by Click Therapeutics
- and more