The future health ecosystem: The new rules for success

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Healthcare is currently having its “transistor moment.” Just as the invention of the transistor boosted computing capacity in the mid-20th century, continuous innovations in life sciences, medicine and IT are revolutionizing healthcare provision. There has been a notable shift to a patient-centered healthcare model, with companies changing their focus from selling curative services and products to selling prevention. To stay competitive, these companies need to adapt their business model to the new environment and find new ways of capturing value. According to Ingrid Maes, Managing Director and Co-Founder of Inovigate, there are four cornerstones that can be considered the keys to success in the future health ecosystem.

The four cornerstones for success

The first driver for success is truly valuable innovation. While this traditionally meant creating higher quality products at a lower cost, other factors such as improved service and a reduced turnaround time are gaining importance. “For example, in pharma, factors such as length of treatment and drug delivery are optimized in the name of patient convenience,” Maes explains. “The need for innovation is also driven by the introduction of consumerism in healthcare. The overall market is growing as the focus on prevention expands the customer base from just patients to at-risk individuals, which is a much larger group. Furthermore, the willingness to spend increases, even for out-of-pocket expenses.” This has led companies from other sectors to enter the market, such as consumer electronics with trackers and gadgets, or fast-moving consumer goods like functional foods and cosmeceuticals. These products form a new, fast-growing market called consumer healthcare. Here lies a threat to the pharmaceutical industry, according to Maes: “While these non-pharma companies have less or even no medical knowledge, they are very experienced in mass-market approaches, and their strong insight into consumer preference is a valuable asset.”

The overall market is growing as the focus on prevention expands the customer base from just patients to at-risk individuals.

Consumer healthcare products created by electronics companies are pushing the diagnostic players to innovate. Medical-grade diagnostic tests are much more accurate than these wearables, but they are performed sparingly and only give snapshots of an individual’s health status. In contrast, the large amounts of less accurate data obtained through continuous monitoring provide longitudinal information and reveal trends. “This shows the importance of collaborating with these types of players who understand the consumer preferences very well,” Maes says. “Recent examples include a contact lens developed by Novartis and Google  to make continuous measurements (of the glucose levels) in tears, or a collaboration between Nintendo and Bayer to increase therapy compliance in diabetic children through gamification.”

The second cornerstone is the importance of leveraging technology and data. In the near future, technology will accompany us throughout our lives, tracking our health status from birth to death. The accelerated availability of data obtained through continuous monitoring, the Internet of Things and crowdsourcing will continue to drive the shift from cure to prevention and fuel further innovation. Automated decision tools will be developed to support clinicians in the optimization and personalization of treatment. Also, the data can be used to build more complex models of everything from organs to the whole body. This will make it possible to test therapies in silico and validate them in vivo, drastically reducing the cost and duration of clinical trials. “Handling the privacy issues linked with grouping and using patient medical data will be a significant challenge,” Maes says. “In Switzerland, a nationwide initiative has been launched where patients donate their data in exchange for shareholder status, allowing them to decide for which type of research it is used. Similarly, from the patient side, Crohn’s disease patients have joined forces on the Crohnology platform to combine their data for medical research.”

Collaborations will lead to a shift of focus from IP to a ‘partnerability index’.

The third factor is the growing importance of setting up partnerships and collaborations. In the current industry model, the value lies in intellectual property and scale. Companies aim to sell their products worldwide, control their intellectual property and reap all the profits from their innovations. According to Maes, this is already changing: “In the future, value will be created more often through collaborations where the profit is shared. This will lead to a shift of focus from IP to a ‘partnerability index.’ Companies will compete to be the most interesting partner, and the loners will be losers.”

Finally, the role of the patient in the healthcare space will shift slightly. Most pharma companies currently focus primarily on payers and regulators. In the future, patients will play an increasingly important role. Innovation is becoming a team sport where various perspectives have to be considered, especially the patient’s. “Shared decisions will be made based on patient outcomes as the true value of products,” Maes says. “While health economic reasons will remain very important, patient values such as quality of life and convenience are becoming the key drivers. Societal values and those of the healthcare providers will complete the equation.”

With these four building blocks, successful healthcare business models for the future can be established. While the increasing rate of medical innovations has led to a growing market and new opportunities, companies must be vigilant and adapt to the changing environment.

This article is a report of the keynote presentation by Ingrid Maes, Managing Director and Co-Founder, Inovigate, on the Janssen – FlandersBio Partnerday, March 3, 2016