The importance of successfully executing a digital health strategy, as well as creating new financial models and partnerships, cannot be understated. Nevertheless, this revolution is not often witnessed in current practice. While incorporation of digital practices has been slow, the future will move quickly. However, instead of fearing the future, the digital health transformation should have pharmaceutical leaders enthusiastic about the possibilities of the very near future. There are clear opportunities on the horizon, and those pharma organizations and leaders who are prepared for the potential, can soon capitalize on them.
It is well documented that health care systems, health providers and patients are using connected devices personally and professionally in almost all aspects of their lives. In fact, the convenience of technological advancements has become more and more integrated into the everyday activities of humans all around the globe.
Almost every aspect of demand and supply in the health ecosystem has been disrupted by the Internet of Things (IoT). And soon, this will include the way pharmaceuticals are designed, tested, administered, monitored and regulated. Therefore, digital health is quickly becoming a primary focus of industry leaders in pharma, as well as the companies, agencies and individuals that overlap with the pharmaceutical ecosystem.
INCREASING THE VALUE PROPOSITION
Change and growth are the pillars of the pending digital revolution of the pharmaceutical industry, and industry leaders believe it is a key to success. In fact, as far back as 2012, 77% of pharmaceutical industry leaders claimed digital health will generate new business for them by 2020, and 94% said it would extend already existing value propositions . While these notions have proven to be correct thus far, the coming few years are posed to see exponential change with mergers and acquisitions (M&A) leading the way, while research and development (R&D) narrow their focus.
In pharma alone, there was a 94% increase in M&A deals between 2014 and 2015, with the major companies making deals for up to $160 billion (Pfizer) .1995 to 2015 proved that M&A was the future of pharma, with R&D taking a backseat. In fact, 60 pharmaceutical companies condensed to 10 big pharma companies in just those two decades alone.
While R&D still has a very important role in the future of pharma, recent history has shown that purchasing, integrating and commercializing technologies from smaller companies can be more lucrative than owning the entire R&D process from start to finish. This is not without complication though, as Unity Stoakes from Startup Health asserts, as “a large company is learning to work with a much smaller emerging startup, there is a lot to be learned .”