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June 7, 2019

Test Your Health at Home - An Exploration of the Consumer Diagnostics Market

Commentary
Sophie Madden
&

Consumer diagnostics is a rapidly expanding field within healthcare, accelerated by advances in genetic testing and DNA analysis, artificial intelligence, and mounting public interest and engagement in direct to consumer solutions that provide insights into people’s health.

Consumer diagnostics within healthcare refer to solutions that can be leveraged directly by patients or consumers to access fast and (hopefully) accurate health diagnosis remotely. Consumer health diagnostics include blood-based diagnostics, microbiome analysis solutions, AI-powered diagnostic support bots, mobile imaging solutions, and other direct-to-consumer testing solutions. These interventions can be used to diagnose a pre-existing condition or to analyse underlying causes of a condition that may not have yet appeared.

Using our HealthXL data platform, which tracks the activity of over 70,000 healthcare organisations, we carried out a search and identified 80 companies offering consumer diagnostics, based on the above definition, which we then analysed to identify key trends, key milestones, and partnerships that may result in something meaningful for the consumer. In this weeks blog, we will deep dive into consumer diagnostics, looking at the funding, partnerships, regulation and evidence that these companies have, and providing you with all you need to know about why you should be cautiously curious about where this space could go.

Notable funding:

There has been $2.8B invested into consumer diagnostic companies, with 23andMe, Helix and Counsyl being the top funded. It is interesting to note that the top 5 funded companies are all in the home genetic testing space, followed by the likes of Healthtap and Babylon, which are diagnostic support virtual health assistants.

Top 10 Funded Consumer Diagnostics Companies:


Top 10 Investors (By number of Investments):

Notable partnerships:

The HealthXL Data platform revealed that a lot of the partnerships in this space are between consumer diagnostics companies and health systems or pharmaceutical companies, perhaps indicating that consumer/ D2C diagnostics need the next level expertise from these organisations to take this information into care delivery for the patient. For health systems and pharmaceutical companies, they are also set to benefit from such partnerships by gaining access to valuable data and insights on consumers.


Some notable partnerships from this space include:


23andMe <> GSK

23andMe is the highest funded consumer diagnostics company on the market, and is reported to have over 5 million users. In July 2018, 23andMe partnered with pharmaceutical company GlaxoSmithKline (GKS). According to GSK, the partnership aims to use genetic data gathered by 23andMe ‘’to identify novel drug targets, tackle new subsets of disease and enable rapid progression of clinical programmes’’. While 23andMe customers have the option to participate in research and contribute their information to the 23andMe database, the partnership sparked concern regarding data privacy and ownership. Some critics have raised the question of compensation for those who choose to contribute their data to research, criticizing the fact that 23andMe and GSK are both set to potentially gain significant financial benefits from the data.


As the popularity of at-home DNA tests continue to grow, we expect to see more and more partnerships between consumer diagnostics companies and pharmaceutical companies, with both parties recognising the value of these ever-increasing data sets. It will be interesting to see how the public react to such partnerships, and if people begin to push back on sharing their data without some sort of financial incentive.


Babylon Health <> NHS

Founded in 2013, Babylon were one of the early entrants to take on the diagnostic support and triage space with the help of an AI chatbot. The basic Babylon pathway starts with a D2C chatbot that escalates to a video GP visit or video consultation if necessary.

Babylon have engaged in numerous partnerships with the NHS where they are being trialled to see to what extent their services can be used in a non-emergency in place of a call center operator. Babylon is expanding and exploring two main services with the NHS as a part of their GP at Hand efforts - chatbot first triage services and teleconsultations. To date, it has been reported that 40,000 people already have GP at hand as their NHS GP, with a 96% satisfaction score.

While Babylon released a comparative study with results highlighting its ability to outperform human clinicians for the purpose of triage and diagnosis, there has been mounting speculation (and media flutter)  that unintended consequences have resulted from the rollout of Babylon in the NHS context , such as increased emergency room admissions and increased CCG spending.

This raises an interesting question regarding integration of consumer diagnostics into the care continuum, and highlights the importance of building both consumer and healthcare provider trust in solutions, and that we cannot so easily un-marry the two in the pursuit of a successful direct to consumer business model.


Regulation:

There is a growing call for robust clinical validation in order to continually validate the efficacy of these solutions. We noticed that while 49% of the consumer diagnostics companies we have identified have published research, only 11% have FDA approval. Many consumer diagnostic leaders have carefully edged the line of diagnostic support, serving simply as a recommendation you can either take or leave, and shied away from having the responsibility of a reliable diagnostic and having to go through the regulatory process.


Some examples of solutions that have received regulatory approval include:



Is evidence at odds with commercial traction?

While there is growing interest in the use of consumer diagnostics within healthcare, this is also a space that has been ripe for controversy.

One of the biggest stories regarding consumer diagnostics in recent years is that of failed blood testing company Theranos. In a previous blog, we explored how the unprecedented public interest in the Theranos case impacted the digital health space, sparking questions around digital health valuations, due diligence, and clinical evidence.  The failure of Theranos changed the consumer diagnostic space - blood testing companies who want to play in this space will now need to be transparent with their evidence of efficacy, work closely with regulators to address unprecedented market pathways, and respect pre-existing regulations, because at the end of the day, status quo is not so bad if the ‘disruptive’ alternative doesn’t work.

23andMe has also been at the centre of a number of negative stories recently, with customers complaining that 23andMe were updating the results of peoples ancestry tests without their consent. While more and more people sign up to 23andMe, the company is gathering more data and generating more insights on genetic trends, leading them to update the results of customers specific DNA based on a change in where they believe someone may have come from.

However, one of the most striking features to be announced by 23andMe is their recent partnership with Airbnb, in which 23andMe customers will be able to find Airbnb homes and experiences located in their ancestral country. Critics claim that moves like these, which will most likely lead to quick financial gain for 23andMe, are at odds with their growing body of clinical evidence, and send mixed messages regarding their key value proposition to consumers, and will do nothing for establishing the trust of the clinical bodies.  

Just last week, we featured a story in our news round up regarding the FBI raid on UBiome offices as part of an investigation into the way in which the company was billing customers and their insurers for their various consumer health tests. It is reported that in the months leading up to the raid, numerous customers complained that they had been overcharged or billed multiple times for UBiome tests.  Following the raid, UBiome stated that they have temporarily ‘suspended’ the sale of their products SmartGut and SmartJane.

Genetic testing company Helix, the second highest funded company in this segment, recently announced the closure of two of their four offices, as well as cuts to their staff. This follows an announcement that Helix is planning on changing course from targeting consumers directly to partnering with health-care providers instead. This might indicate that the direct to consumer business model is not as lucrative as it appears on the surface, and that traction only truly comes when they gain the trust of health care providers. Once a genetic testing company has gained the necessary customer acquisition, will this pivot be the next step for most?   

The Bottom Line

Although there has been significant interest and commercial traction in the consumer diagnostics space, a number of controversial news stories, like those highlighted above, have led to public trust in these solutions being significantly challenged. As an industry, we are beginning to question the validity of solutions, demanding evidence to back up claims. While this is a space with significant potential, we believe we are still a while away from consumer diagnostics shifting the needle and changing the way in which people engage with the healthcare system.




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