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What Does the Business of Digital Health Look Like?

September 16, 2021
Borderless Leadership - article

In conversation with Naomi Fried, Ph.D, Founder and CEO of Health Innovation Strategies. Watch the full discussion here: https://youtu.be/PKsY-a5C_ZQ 

Andrew Kris 

How do pharma companies and devices companies address the topic of digital health?

Naomi Fried 

First off, it is crucial that the pharmaceutical industry embraces the opportunities around digital health. They have the option to enhance their patients’ experiences and augment the value that we’re delivering, not just the pharmaceutical but also to include a digital health wrapper.

Unfortunately, it’s not the easiest thing for Big Pharma to get involved with digital health. There is, in a lot of ways, a mismatch between the way pharmaceutical companies and digital health startups approach business. The former is a bit more cautious, concerned with regulatory requirements, whereas you see a lot of startups move through these barriers in a hurry. Imagine the difference between a big aircraft carrier and a speedboat.

However, I think partnerships between larger, established companies and these startups are critical. Large companies are simply not in the position to create all these solutions themselves, especially in a market with exploding demand, so why build when you can buy or partner?

Andrew Kris 

As I understand it, to have digital health be truly successful, it must be an essential component of all drug or device strategies, as opposed to being looked at separately. Is that what you’re experiencing as well in your work?

Naomi Fried 

Absolutely. In the ideal world, as people are developing drugs in phase two or phase three, they’re starting to think about their digital health strategy, and maybe have even started to use some of those tools in the testing that they’re doing with the drugs. This makes for a much more natural progression, ensuring once a drug is on the market it also has a digital wraparound in place. It’s a lot harder to start developing a digital health strategy after the drug is on market. I think we’re going to see more success from companies that think about digital health strategies earlier and as an inherent part of drug development.

Andrew Kris 

A question from our audience: “Where do you think in the value chain, from clinical trials to treatment, compliance or diagnostics, will be most impacted by digital health?”

Naomi Fried 

I am a strong proponent of using digital health solutions as part of phase 3, and even phase 2, clinical trials to evaluate and support the patient. Whether using a digital diagnostic to qualify patients for a clinical trial, telehealth to answer patients’ questions about side effects, or apps and educational tools on medication compliance. By including the solutions at this phase and building them into the trial, the pharmaceutical company comes to understand and appreciate the value of digital health, making it a natural transition from when the drug goes out to the market to continued use of digital health structures and tools.

Andrew Kris 

You’ve been involved with both insurance and digital health regulators, do you see that relationship changing because of what’s happening today?

Naomi Fried 

Neither payers nor insurance companies do anything too quickly. They’re a very measured, thoughtful, and careful industry. While there has been a digital health awakening, we’re still seeing consistently that our payers want to see the value of these solutions before they’re willing to pay for them. Unless we see regulatory change requiring telehealth to be covered, we’re not going to see a lot of radical changes in the way the payers approach telehealth and the digital health industry at large.

However, as more digital health solutions get FDA approval, it will be harder for payers not to embrace these types of solutions. Afterall, to get FDA approval, you need data to prove impact, efficacy, and safety, which means they have all the data that payers are looking for already.

Andrew Kris 

Do you think that this whole digital health area, this revolution, is going to change the rules of the game for insurance companies?

Naomi Fried 

Insurance companies should want to be involved with innovation. In the US, we certainly have some that have been funding venture groups to try to find more innovation. In that sense, they’re leading, however, in other areas, they will need to be brought along as value is demonstrated and digital health solutions are approved by regulatory agencies.

Andrew Kris 

It seems successful digital health requires a robust ecosystem to handle these new innovations, is digital health then only for developed economies?

Naomi Fried 

Absolutely not. Even very early on, we were fascinated to see that in the developing world, where folks don’t have a lot of infrastructure, there was still a high percentage of the population with mobile phones, which are gateways to digital health. We are now using mobile phones to deliver care in remote villages, from connecting with doctors to learning more about conditions. It doesn’t take a huge technology infrastructure to have a successful digital health deployment, instead it’s about understanding your environment, understanding the ecosystem, understanding the culture, and then building something that fits in that environment.

 

Are you interested in learning more about the digital health revolution? Get in touch with Borderless today.

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