Future of Health
Digital medicine products are transforming research and care models, and changing regulations’ aim to expand access. Explore how organizations are aligning for success in the Future of Health™, where digital medicine products will be used at scale.
The last few years have witnessed a proliferation of digital medicine products, including digital therapeutics (i.e., regulated products that employ software to deliver evidence-based therapeutic interventions) and digital companions (i.e., products that provide additional services and insights for patients to improve their experience, knowledge, and outcomes of their existing drug therapy). The potential for their use in conjunction with or as an alternative to drug therapies has sparked interest among many companies, even outside of traditional health care and life sciences, including large technology players and digital health start-ups.
In our Future of Health vision, we expect some diseases will be prevented, managed, or cured with nonpharmacological interventions such as digital therapeutics. These interventions could reshape the health care industry, shifting the focus toward prevention and well-being, moving care outside of health care facilities, and putting consumers at the centre of their own care. Even today, digital medicine products are beginning to transform health research and care models, and the COVID-19 pandemic has accelerated this transformation.
Our view is that life science companies that reimagine their business models and put the consumer-patient at the centre, will be most likely to succeed in this future paradigm. Incumbents’ clinical and regulatory expertise puts them in a strong position to commercialize digital medicine products in a highly regulated environment and win over digital innovators and other entrants by doing this at scale. This will require new capabilities.
Biopharma Companies are Experimenting with Digital Medicine Products
- Digital medicine products offer the opportunity to become more patient-centric, influence patient adherence and outcomes, better understand the patient experience of disease, and generate real-world data that is relevant to customers.
- However, biopharma companies are still figuring out how to tap this opportunity at scale. Many have experimented with digital companions, but few are developing digital therapeutics.
Business Models are Evolving as Reimbursement Remains a Challenge
- Market access pathways for digital medicine products remain ill-defined.
- Pharma companies expect most digital companionsto enhance revenue for core products rather than create a separate revenue stream; therefore, companions are typically offered for free or built into the pricing of the pharmaceuticals they support.
- Developers of digital therapeutics—mostly small technology companies with a specific clinical focus—are testing multiple commercialization models, (including direct to consumer, direct to provider, and coverage under medical benefit). But there is no clarity on the winning model or models that will be required for sustained commercial viability
Operating Models to Support Digital Medicine Products are in Early Days
- Today, most biopharma companies’ partner with large technology companies or small digital therapeutic developers; few have yet decided to build digital medicine products in-house.
- Most companies have or are in the process of standing up a centralized digital function, which acts as an adviser to product teams to identify unmet needs and select technology partners. Some are creating similar leadership roles in R&D to align digital medicine product strategy to the therapeutic strategy earlier in the process.
Digital medicine products call for new approaches and capabilities while leveraging core competencies that can provide strategic advantage. Based on our research, we recommend biopharma companies:
- Articulate a clear visionof how their digital medicine product strategy will create value within the broader digital health ecosystem in conjunction with their therapeutic strategy, recognizing that each therapeutic area (TA) is likely to have distinct differences based on the etiology of the disease.
- Leverage their strengths and experienceof understanding the patient journey, the clinical evidence generation process, and the regulatory pathways to bring products to market.
- Define and implement an operating model and decide whether to build product development capabilities in-house or partner/outsource.If developing digital medicine products is core to the strategy, companies will need to cultivate new expertise and talent pools with requisite skills in software design, agile development, medical device regulation, software quality management systems, and digital product management.
- Reinvent the development process. Building digital medicine products requires rethinking the traditional development processes. The iterative nature of building software calls for tighter coordination between commercial, medical, regulatory, and development teams.
- Expand the traditional business models.The traditional commercialization and acquisition playbook may not be enough. Pharma companies may need to build relationships with new stakeholders or change relationships with existing ones; and business development opportunities should take into account digital medicine products.
The age of digital medicine products is here, and life science companies that can identify a clear place for themselves within this burgeoning ecosystem will likely see a competitive advantage.