Digital Therapeutics – Landscape assessment and potential market entry strategies

Healthcare is shifting from Hospital to Home

The evolution of healthcare has been remarkable to observe: whereas before the patient would have to go to a hospital or clinic to avail their services, now these services come to the patient’s doorstep. Earlier there would be long calls and waiting times to get an appointment with a doctor, medical records were lost or not up to date as patients didn’t make frequent visits to the doctor or hospital, there could be mistakes in data entry and maintenance of paper records, and it was cumbersome for patients to travel such long distances to go to the healthcare center. Now however, there is technology in place that can monitor vital signs round the clock, wearable devices that record a patient’s SPO2, heart rate, breathing and blood pressure as well. This data is seamlessly transferred via Bluetooth or cloud to the physician and is accurate and up to date. It is prudent to invest in electronic health records and big data, as organization of this information is vital in healthcare.

Some examples of smart tech used in medicine include the Abilify MyCite – a Smart Pill: it is a small pill which contains a sensor that can transmit information directly to a mobile phone of the patient and the physician, and helps monitor if the patient is compliant with their medications. This is necessary in patients who cannot be expected to take their drugs regularly, such as those with schizophrenia, acute manic and bipolar disorder patients. In general, about 50% of patients are non-compliant with their medicines which are prescribed, and around 30% of all prescribed meds are never picked up from the pharmacy. This smart pill can thus reduce the disease burden by timely treatment and notification of medication compliance. It has been approved for use by the Food and Drug Administration. Another great mention here is the Bluestar software which is focused on diabetes type 1 and 2 management of patients and takes a holistic approach to it, by syncing with glucose meters, pharmacies, activity and fitness bands and trackers. All this data and insights are delivered to the consumer’s healthcare team and makes it easier to have the data related to their disease stored in the cloud and in one place. It can be tailored to the user’s specific needs and is helpful in getting help 24/7 should it be required. There are contact lenses created by Korean scientists which can detect the level of glucose in tears and give a reading of the body’s sugar levels in diabetics. This eliminates the need for invasive finger prick blood tests. There are also wearable patches which can take your electrocardiogram by detecting the heartbeat and pulse. With such convenience available, more than 80% of consumers are ready to try such wearable devices that can monitor their health, and over 44% of them feel they have more control over their health through these. Health has become an on demand service, with 77% of appointments with doctors being booked online. With everyone owning a smartphone, it is no surprise that around 47% people will research their doctor before a visit, and 38% patients will read up about the hospital they want to go to. AI startups in healthcare have increased manyfold, as much as fourteen times their market share in 2000. Not just with patients, even doctors find tech and AI makes them perform better. Those surgeons who trained virtually have been shown to do 29% faster in surgery and with 7 times fewer mistakes. This is possible through Virtual Reality software enabling them to simulate an operative environment. VR also finds uses in allowing children with autism to find their way in the world and gives them confidence. Not only this, but VR is also being used in chronic pain management. By 2016, 50 million people in the US alone had some form of chronic pain. The use of VR will alleviate the need for opioid medications and subsequent opioid epidemic.

Technological advancements and increased awareness are driving adoption of Digital Health Solutions

Digital Health is a broader field which includes the consumer more actively on a regular basis through providing articles online, platforms for healthcare discussions and queries, lifestyle and wellness apps, storing of health records and data, and transmission of the same. It doesn’t require clinical evidence support. As these are not considered to be medical devices, they don’t require any oversight or review. This is more generally what comes to mind when a person thinks of digital healthcare.

Compared to the market size of $106 billion in 2019 for digital health, by 2026, it is expected to grow by 6.03 times, with a whopping $639 billion. Wearable health devices will grow in the market for a share of $22 billion by the year 2025, a mighty leap of 80 times from 2015. With sedentary lifestyle trends on the rise and a larger population slipping into obesity and consumption of adulterated foods leading to more diabetes cases, the chronic disease burden by 2020 will have risen by 57%. With this, however, people are also becoming more aware of the importance of preventive care and its long term benefits in saving money in healthcare costs in the future. People are becoming more aware about taking preventive measures by reading and sharing such information through the internet. The pandemic has also brought forth to light mental health issues, and many younger people are seeking help before it gets too late: this market of mental health services and software will reach an estimated $2.31 billion by the year 2022. There are various causes for such rising trends in online healthcare systems: smartphones have become the norm and make information easy to access. Advanced technologies such as IoT and AI can be applied to various sectors of patient care to develop products. People are using mobile health technologies to monitor their chronic diseases by themselves, and keep them in check, E.g. for diabetics.

Investing in healthcare has become very lucrative, with investors pouring in $13.7 billion, and it was seen as the second highest funded year ever. The most focused on sector is Telemedicine, which saw a funding of $1.7 billion, followed by Analytics and mobile health. Other categories which were also well funded in 2019 are booking apps, clinical decision support portals etc.

Digital health solution companies do not need clinical evidence or regulatory oversight to launch their product in the market. But there is a subset of Digital health – Digital Therapeutics which is regulated, requires clinical evidence and real-world outcomes in order to launch their product / services to improve people lives.

Digital Therapeutics are software products that deliver evidence-based interventions to improve / manage / treat a medical disease

Dtx are narrow spectrum and tightly regulated interventions that can manage or cure a disease. These need to be evidence-based with extensive research to show their efficacy. Proof of their success in clinical trials and in everyday practice has to be shown in order to decide their indications, contraindications, risk and benefits.

The market for digital therapeutics was 2.9 billion USD in 2019, and is expected to grow to 13.8 billion USD by 2027. Some of the largest investments were seen in diseases such as diabetes management, cardiovascular disorders and obesity.

The key players in this sector are Voluntis and ScientificMed for cancer management; metaMe, mahana, and Bold Health for digestive health; kaia, BehaVR, jogo and lucine in pain and musculoskeletal disease management; for diabetes, it is omada, welldoc, glooko, Dario Health and amalgam Rx. In the management of sleep disorders we see Big Health and SusMed dominate the market. In the treatment and management of addictive disorders, the big names are Pear Therapeutics, Lief Therapeutics, BehaVR, and Click Therapeutics. For anxiety and depression, the main companies are Gaia, appliedVR, Palo Alto Health Sciences, happify Health and Limbix. In the management of respiratory disorders, the key players are Propeller, Nuvoair, and Sound Life Sciences.

Active investors in the digital therapeutics market include Specrum Health Ventures, Lead Edge Capital, Providence Ventures, RRE Ventures, US Venture Partners, Bronze Venture Capital and M2. Some of the biggest deals observed in venture capital in 2020 were as follows: a 100 million USD Mindstrong deal, $93.1 million deal of Virta Health, Omada’s 57 million USD deal, and a $51 million deal by Mojo Vision. Investments in digital therapeutics have increased ninefold from 2015 – 2019. Till august 2020, investments into DTx were at a record $709.7 million with 32 deals in place. In 2019, $1.2 billion were invested across 52 deals, up from $134.3 million in 2015 for 22 deals.

a)  Diseases in DTx

The disease which takes up a large chunk of the market in digital therapeutics is diabetes, especially in regions such as the Middle East, North America and North Africa. And in Asia, it is pretty common in India – which is known as the ‘diabetes capital of the world’. Through 2020-2027, the share of diabetes in digital healthcare will increase by a CAGR of 20.5%. The compound annual growth rate of obesity will be 23.5% in the same time period, with USA having the lion’s share of the market. Obesity will contribute $1.01 billion by 2027 and will grow at a rate of 22.7% from 2020-2027. Next comes cardiovascular disease, which is one of the leading causes of death worldwide. It has been shown that 90% of cardio related deaths are preventable by monitoring health related data through wearable devices and platforms for the same. Here also, North America dominates the market of cardiac disease burden. Apart from this, North America has the highest cases of gastrointestinal and central nervous system disease share in the digital therapeutics market. The central nervous system disorders digital therapeutics market is expected to grow at a CAGR of 19.7% during 2020-2027, and GI disorders digital therapeutics at 16.6% during the same period. The burden of respiratory disease digital therapeutics is also highest in North America, valuing at $161 million in 2019, and is expected to grow at a CAGR of 20.5% between this seven year period.

b)  Challenges and Risks

All these minefields of data will also have threats and risks posed to them: data breaches can cost companies billions of dollars of revenue losses, and their stakeholders have suffered as a consequence. Cybercrime will try and steal patients’ data, and this is a serious breach of trust in these healthcare companies too. Another challenge is the changing nature of oversight and review boards, new laws and regulations coming into place that need to be accepted by healthcare startups in order to stay afloat and relevant in the market. Apart from this, the basic requirement of an online healthcare service is that the patient is tech savvy and understands the platform, the platform itself must be able to handle large traffic and run without glitches, and a trained medical staff that can handle this new form of patient care.

There are many examples of real-world diseases that show the efficiency of digital health and therapeutics in detection and management of illnesses: heart disease can be prevented by checking activity, food intake and weight management through wearable smartwatches that keep a track of these parameters. The most prevalent chronic disease is cardiovascular diseases, and according to the CDC, 6/10 people die of chronic illness. Along with this, ADHD, asthma, diabetes and breast cancer can also be tracked and managed through smart devices and platforms. This strategy lowers the cost of treatments as well.

Managing chronic conditions is tricky, as it causes a drain on the money required to manage them, and earlier detection and monitoring through digital therapeutics can bring down costs of insurance companies for management of acute problems. This infrastructure is growing rapidly because of a boom in the smartphones market, which in 2019 was at 82.9% people in the UK using them, 79.9% in Germany, 79.1% in the USA, and worldwide, 55%. However, a different picture comes to light in underdeveloped nations where people set more store in traditional therapies and there is a lack of information, implementation of such digital schemes, and lack of promotion of these platforms. Also, a general concern of 1/3 of patients using digital therapeutics fear that their information might be sold to third parties by tracking their behavior in invasive ways. This research was done by Savvy Cooperative in 2016. However, there is a scope for growth and investment in this sector in Asia-Pacific and LAMEA as more people adopt smartphones, become aware of the benefits of digital health, and the lucrative side of availing treatments online rather than a pricey hospital set up.

c)  DTx Market business models

Along with wearable devices, there need to be software to backup, store and analyze the data being received from patients. This software market holds 68.7% of digital therapeutics. These solutions include mobile and web applications, and other devices to track patient data. The companies in this software solutions market are: Proteus Digital Health, WellDoc, Noom and Twine Health. This software digital market is expected to reach a value of $9760 million by the year 2027.

There are two models of work in digital therapeutics: one is Business-to-business (B2B), and Business-to-Consumer (B2C). In B2B, we see manufacturers supplying their products to healthcare facilities, wellness centers, gyms etc. In B2C, products are sold directly to the consumer. The B2B model is projected to reach $5.61 billion by 2027, and B2C at $8.9 billion by the same year. In the digital therapeutics overall market, the strongest region coming into play is N. America. This is due to a steadily rising ageing population, an increased burden of chronic illnesses, and better awareness programs adopted by the government. Canada and USA together took up 91.9% of the digital health market space in 2019. Mexico is catching up with an expected CAGR of 19.5% during 2020-2027. Other key countries showing promising growth here are Asia-Pacific, with India estimated to grow at the fastest CAGR here at 26.1% from 2020-2027, in Europe, UK dominates with an expected CAGR of 18% for the same seven years, and in LAMEA, Saudi Arabia will grow fastest at a CAGR of 23.8% in this time period.

d)  Top Companies in the Digital Tx market by large have collaborated or partnered with Big Pharma to launch new products in the market

  • Voluntis

Coming to some of the top companies that are key players in the digital health and therapeutics market, the first one is Voluntis: it was founded in 2001, and focuses on patients with diabetes and oncology related issues. They manage chronic conditions and try to improve treatment outcomes, and have collaborated with Biocon Biologics to innovate on digital therapeutics for insulin. They also have a software called Oleena which remotely monitors cancer patients for related symptoms, and has successfully completed the FDA regulatory review for it. Oleena gives personalized recommendations to cancer patients based on the symptoms they enter into the app, and patient can self-manage their symptoms. However, when the severity of the condition becomes too much for the patient to handle by themselves, the app connects them to the medical assistance team, and the app continues monitoring the patient till the symptom has resolved. Apart from this, Voluntis have created other products such as Insulia, Diabeo, CoacguCheck, Theraxium Oncology etc.

  • Omada Health Inc.

It was founded in 2011 and creates online digital programs which oversee individuals at risk of chronic illness. It combines behavioral data and data science for type 2 diabetics.

  • ResMed Inc.

It is a big presence in the respiratory disease market. It uses cloud computing and medical devices to manage and treat sleep related breathing disorders such as sleep apnea. They have a wide variety of products and services, such as Propeller Health, which is a software program attached to inhalers that detects pattern of usage of inhaler, how often, compliance and breathing patterns of the patient through sensors placed here. It is used in the management of asthma and chronic obstructive pulmonary disease. Other products include ‘myAir’ which tracks sleep therapy progress, AirView, for Obstructive Sleep Apnea patients.

  • Pear Therapeutics, Inc.

The company was started in 2008, which aims to provide clinically validated software solutions which are therapeutic for patients and help them improve their prognosis, allow more engagement and compliance from them, and also give room to clinicians to track the patients’ status. They have made products such as ‘reSET’: it is the first Prescription Drug Therapeutic (PDT), which has received FDA authorization to help enhance disease prognoses, and is a 90-day PDT for patients suffering from Substance Use Disorder. It is indicated for provision of Cognitive Behavioral Therapy (CBT), along with the usual contingency plans and drug regimens prescribed to manage the condition in an outpatient setting. The ‘reSET’ system has a portal where the patient can record the lessons completed, get rewards for compliance, keep a record of their cravings or triggers and the storage of simultaneous data such as in clinic drug test reports.

Along with such revolutionary products, Pear Therapeutics has also come up with solutions like Pear – 003 (for Insomnia and Depression), Pear – 006, for Multiple Sclerosis and ‘reSET-O’ for Opioid Use Disorder. It has collaborated with Novartis to launch ‘reSET’ and ‘reSET-O’.

  • Livongo Health, Inc.

It was founded in 2014, and is focused on diabetes management by providing patients with tools and coaching. The Livongo Diabetes Meter is a pretty nifty device that logs your blood glucose levels directly into the meter through pre-ready strips that come in the packaging. The device stores your glucose readings, and gets you in touch with a certified diabetes management expert should your reading go too low or high, or if you’re feeling under the weather. They provide tips and advice on how best to manage your blood sugar levels day to day, and spare the hassle of unnecessary doctor’s visits and wastage of time. The data is uploaded and synced on cloud. The company has been acquired by myStrength, Inc.

e)  Strategies adopted in the Digital Therapeutics market – Partnership emerging as the top strategy among all the stakeholders

There are many more such big names in the industry, and they partner up or collaborate on numerous products to access the chunk of market that the other company caters to. For example, ResMed has a wider distribution network and a bigger variety of products, more investment and greater geographical presence. The company Fitbit has access to more than 87 countries, with its wearable devices being popular for fitness. Livongo Health also dominates the market as a key player in terms of market penetration, R & D, and capital investment. It has a formidable presence in computer platform as well as smartphone applications. Some successful partnerships in recent years have been as follows: Noom and Eversana partnered up to better cater to patients with chronic conditions and rare diseases, to check patient adherence and engagement for long drawn out therapies. Another great joint initiative was done by Walmart and 2Morrow, and they came up with a digital therapeutics program to curb smoking and vaping via walmart’s website. There are many such companies which have created joint programs for digital therapeutics space. Voluntis and Bristol Myers Squibb partnered up in 2020 to create and investigate digital therapeutics solutions that could support cancer patients by leveraging Voluntis’ platform of Theraxium Oncology, which allows for the creation of a web portal for the patient’s healthcare teams to work seamlessly in one digital space, and also gives prescriptions via the same. Patients are supposed to update any new or severe symptoms of disease and they will immediately receive actionable information to manage it, or have instructions from their healthcare provider, tailored to that specific need.

Propeller and Orion also partnered up in 2019 to bring new digital therapies for patients with COPD and asthma. It connects Orion’s already existing Easyhaler line of inhalers with Propeller’s digital medicine platform via a small sensor. Happify health and Sanofi also teamed up in 2019 to explore digital therapies for people with depression and multiple sclerosis. The company Biofourmis moved to acquire Gaido Health, which places them in a strong position to venture into the Oncology space of DTx. Their joint ventures aim to monitor post-discharge cancer patients and manage their symptoms after leaving hospital. The company Virgin Pulse also acquired Blue Mesa, which is best known for its diabetes prevention program called Transform.

The Swiss pharmaceutical company Novartis acquired digital therapeutics firm of Amblyotech that provides their novel digital therapy for treatment of amblyopia. This acquisition moves Novartis further into the refractive disorder line in ophthalmology. The software utilizes video gaming with 3D glasses, which trains the patient with lazy eye to use both eyes simultaneously to view the images as a whole. The software uses something called ‘dichoptic display’ where an algorithm presents each eye with different images. Recently, CVS health also announced that they had added five new companies to their digital health platform for PBM clients, including Hinge Health, Livongo, Hello Heart, Torchlight and Whil.

Akili launched a product in 2020, EndeavorTM, which is aimed for children with ADHD, and is an action based video game shown to improve concentration and attention. MedRhythms in 2020 announced that they were developing a Patent Advisory Board, which is the first of its kind in the industry. This will bring a patient’s perspective into decisions that motivate the company’s goals, vision and products, through the lens of living with the effects of Parkinson’s, MS and strokes. Pear Therapeutics also announced a limited distribution program for its product, Pear – 004, for management of people living with schizophrenia. Big Health launched a CBT based app called DaylightTM, which focuses on combating and reducing feelings of anxiety.

Partnership by far remains the best strategy for growth, closely followed by collaboration, product launch, product approval, acquisition, agreement, and business expansion.

f)  Regulation

Devices related to digital therapeutics are divided into three classes, namely Class 1: which are subjected to general controls like establishment registration and device listing , labelling, medical device reporting and prohibitions against adulteration and misbranding. Class 2 devices: Subjected to general controls, performance standards and other special controls. Requires prior 510(k) clearance before commercially marketing in US. And Class 3: Devices that pose the greatest risk (such as life sustaining, life-supporting, or implantable devices. Such devices require PMA permission supported by clinical trial data. To get FDA approval and clearance, there are two pathways as well: the 510k Clearance Pathway: any device which doesn’t require Premarket Approval Pathway or PMA, and if any modification is done to it prior to getting the 501k approval, which can be any change in its design, intended use, will need a new clearance. The same applies for PMA.

The FDA in 2017 announced a new policy which would provide better guidelines for digital health, and launched a software precertification pilot program for the same, called Pre-Cert. Some successful FDA approvals that have come this way are as follows: Pear is a digital therapeutics startup which received FDA approval for its app Somryst, to manage older patients with chronic insomnia.

When it comes to defining the digital therapeutics solutions, there is the example of Apple Inc, which is a multinational organisation that produce wearable devices among other things, and there are services and software apps available to improve patient costs. These apps and the sotware itself are used by a number of healthcare professionals. This is known as Full-scale Market Attributes. When it comes to Pure Play Attributes, these are done through pharmaceutical partners, which will augment current pharmaceutical solution through addition of a software component or becoming part of pharma-based platform. It will need a digital subscription and is reimbursable. A great example of this is Pear Therapeutics, which integrates clinically validated software apps with previously approved treatment modules.

Current Disease Trends & Investing in Them

Healthark internal analysis has identified two conditions as the top investment pockets: diabetes and obesity. With the rise of diabetes, it takes up a market share of 24% in 2020, and will be the highest revenue generator in digital therapeutics by 2027. Obesity too, will take up a market share of 24% by 2027, and will see a growth of 23.2% between 2019-2027. This data has shown us that diabetes is a chronic and highly costly disease to manage along with having such high prevalence rates. There is great opportunity here for manufacturers of R and D in digital therapeutic products. Some big names already in the diabetes management sector are Noom, WellDoc, Glooko, and Omada Health. They are providing customers with software apps and programs to handle and monitor their diabetes.

This trend is observed as in 2018, 10.5% of the American population was suffering from diabetes and was the 7th leading cause of death. Currently, there are 425 million diabetics around the world, and this number will reach 625 million by 2045. In 2016, 1.6 million people had lost their lives due to diabetes, according to data put forth by WHO. Along with all these, the cost of treating diabetes has also gone up by 26% since 2012.

Coming to obesity, its prevalence has increased to 42.4% from 2017 to 2018 and it is the second most prevalent chronic disease after diabetes. Also, in 2018 it was shown that among adults aged 20-39, obesity was 40%, and 44.4% in adults aged 40-59 years, and at a whopping 42.8% among adults aged 60 and older. This condition also provides opportunities for prevention by usage of digital therapeutics, by tracking and monitoring lifestyle, and daily exercise along with intake of healthy food. In a 2017 analysis by Noom, it was found that 78% of the users would download it for losing weight (Noom Weight Loss Coach).

North America will dominate the DTx for the next decade

It contributes to 49% share of the digital therapeutics market as of 2020, and will be growing at a CAGR of 19.2% during 2019-2027. Even through Asia-Pacific is expected to grow at the highest rate, North America will still hold the majority of market share in the forecasted period. By 2027, North American markets will take up 6.28 billion USD in digital therapeutics. Europe and Asia will take up 3.27 and 2.96 billion USD respectively. These trends are observed because the US led FDA has put in place strong guidelines to oversee the digital therapeutics market, establishing standards for the product quality before it hits the market. This increases the product reliability and efficacy. There has also been a rise in chronic diseases burden in North America, with 6 in 10 adults having 2 or more chronic disease in the USA. It is estimated that by 2023, 49% of the American population will be having some form of chronic illness.

There is also a need to bring down healthcare costs as 84% of the management money is directed towards treatment of chronic diseases, making up 19.9% of the country’s GDP. This price will only rise in the future with increasing burdens of chronic disease. There is also a positive shift towards reimbursement for digital therapies, showing that 25% of organisations already cover digital Tx, and 45% more are interested in covering for this in the future. The two major PBMs which are CVS Caremark and Express Scripts, together make up 53% of the reimbursement market, and have made adaptations to include DTx in their plans.

Strategic steps for building a digital therapeutics solution

In order to better allow the digital therapeutics to flourish, awareness of this service must be made clear to both the patient and the provider, through social media, word of mouth, research and more. Development of a business model is necessary which can be tailor made for the specific client, along with investments needed in specific areas: in order to expedite your product launch, it is important to get into partnerships and joint ventures, acquisition. Also, a company may need to license and integrate multiple digital therapeutics products to complement an existing treatment by developing its own platform.

Partnerships are useful in fulfilling unmet patient needs that have already been identified along with pairing of technical capabilities and digital skillset of a technology company with regulatory expertise. A great example of this is seen with HARMAN, which is a subsidiary of Samsung electronics, and it entered into a long-term partnership with Roche, in order to develop a digital therapy solution for people with autism.

Another strategy that can lead the way forward is acquisition: identification of a specific company to leverage its therapeutics area, then investing in scaling the digital capability. An example for this is Apple acquiring asthma monitoring company called Tueo Health, to collect relevant data, alert users of changes in condition and set up a live consultation should the need arise, via the Tueo Health asthma educator.

A third tip for growth in DTx is licensing: a company can easily license and integrate multiple digital therapeutics products to complement existing treatment, by developing its own platform. It can also create an app store to integrate multiple digital offerings. A thriving example of this is the integration of Amazon’s Alexa services with Livongo’s blood glucose monitoring services. Users may use the voice service feature of Alexa to ask on their blood glucose status and health tips.

Tackling the entry barriers for your DTx solution

They present many challenges as well which can be addressed to make use of their full potential. It’s an opportunity for software based technology companies where they can leverage their technical knowledge and venture into the healthcare market, and capitalise on the growth potential in digital therapeutics. A key challenge here is creating awareness that DTx can provide patients: this can be tackled by using social media and holding seminars and conferences, where patient success stories can be narrated, and using messaging that promotes knowledge about digital health on social media. Getting approval from regulatory bodies such as the FDA is also a challenge, which can be overcome by collaboration of software and pharmaceutical companies, to leverage their understanding of the regulatory bodies in healthcare industry.

Launching new products can be a herculean task as well, whereby companies will need to work across multiple industries to ensure they mark unchartered territories with expertise. This can be achieved by developing a reimbursement model that provides significantly more benefits than existing models.

Digital therapeutics does present challenges that need to be overcome, by creating awareness of the products on offer, launching the product by wise collaborations, and getting timely approvals from regulatory bodies. It presents growth potential that can be capitalised with the right investment and research.

Sources

  1. Difference between digital health, digital medicine, and DTx products – Journal of family medicine and primary care
  2. Digital Health, Digital Medicine, Digital Therapeutics (DTx): What’s the difference? – Healthxl
  3. Digital Health Whitepaper – Capgemini
  4. Digital Transformation in Healthcare in 2021 – Digital Authority Partners
  5. Digital Health – Allied market research
  6. Digital therapeutics Funding – FCA Ventures
  7. Top DTx moments 2020, 2019 – DTx East
  8. The Digital Therapeutics Revolution – Pitchbook
  9. Digital Health Software Precertification – FDA
  10. Startups in Digital Therapeutics – Tracxn
  11. Digital therapeutics still have a long road ahead of them – MobiHealthnews

The potential for artificial intelligence in healthcare

Artificial intelligence has come a long way since it was first established as a field in 1956. Over 60 years ago at Dartmouth College, a group of scholars organized by computer scientist John McCarthy coined the term. The Dartmouth group wanted to explore the possibilities of having machines solve problems that humans typically solved using their natural intelligence. Today, AI has evolved past that early research and development stage.

In recent years, there has been an amplified focus on the use of artificial intelligence (AI) in business and society to resolve complex issues. Likewise, the adoption of artificial intelligence (AI) in healthcare is growing while radically changing the face of healthcare delivery. AI is being employed in a myriad of settings including hospitals, clinical laboratories, and research facilities. AI approaches employing machines to sense and comprehend data like humans has opened up previously unavailable or unrecognised opportunities for clinical practitioners and health service organisations. Some examples include utilising AI approaches to analyse unstructured data such as photos, videos, physician notes to enable clinical decision making; use of intelligence interfaces to enhance patient engagement and compliance with treatment; and predictive modelling to manage patient flow and hospital capacity/resource allocation. These technologies have the potential to transform many aspects of patient care, as well as administrative processes within provider, payer and pharmaceutical organizations.

The complexity and rise of data in healthcare means that artificial intelligence (AI) will increasingly be applied within the field. Several types of AI are already being employed by payers and providers of care, and life sciences companies. The key categories of applications involve diagnosis and treatment recommendations, patient engagement and adherence, and administrative activities.

There are already a number of research studies suggesting that AI can perform as well as or better than humans at key healthcare tasks, such as diagnosing disease. Today, algorithms are already outperforming radiologists at spotting malignant tumours, and guiding researchers in how to construct cohorts for costly clinical trials. However, for a variety of reasons, we believe that it will be many years before AI replaces humans for broad medical process domains.

Rather than robotics, AI in health care mainly refers to doctors and hospitals accessing vast data sets of potentially life-saving information. This includes treatment methods and their outcomes, survival rates, and speed of care gathered across millions of patients, geographical locations, and innumerable and sometimes interconnected health conditions. New computing power can detect and analyze large and small trends from the data and even make predictions through machine learning that’s designed to identify potential health outcomes.

Machine learning uses statistical techniques to give computer systems the ability to “learn” with incoming data and to identify patterns and make decisions with minimal human direction. Armed with such targeted analytics, doctors may be better able to assess risk, make correct diagnoses, and offer patients more effective treatments.

Healthcare delivery has over years become complex and challenging. A large part of the complexity in delivering healthcare is because of the voluminous data that is generated in the process of healthcare, which has to be interpreted in an intelligent fashion. AI systems with their problem solving approach can address this need. Their intelligent architecture, which incorporates learning and reasoning and ability to act autonomously without requiring constant human attention, is alluring. Thus the medical domain has provided a fertile ground for AI researchers to test their techniques and in many instances; AI applications have successfully solved problems with outcomes comparable to that of human clinicians. As healthcare delivery becomes more expensive, stakeholders will increasingly look to solutions that can replace the expensive elements in patient care and AI solutions will be sought after in these situations. However, cold technology cannot totally replace the human elements in patient care and a model that incorporates both technological innovations and human care has to be investigated.

Clinical Applications of AI Today and in the Future

There are numerous applications of AI on the market today or awaiting approval that can improve patient care and potentially save lives.

Those applications involve pattern recognition, robotics and natural language processing, which includes speech recognition and translation. Machine learning, a “technique that trains software algorithms to learn from and act upon new data to continuously improve performance,” is also increasingly used today,

Here are a few examples of the latest tools that leverage AI and its subsets to augment various areas of medicine and healthcare, such as:

  • Virtual assistants: This AI-driven technology can help people with Alzheimer’s disease with their daily activities. For example, 59-year-old Brian Leblanc, who was diagnosed with early onset Alzheimer’s disease in 2014, started using Alexa on his Amazon Echo Dot for reminders to eat, bathe and take medication. What it enables him to do is to have more control over his life.
  • MelaFind: This technology uses infrared light to evaluate pigmented lesions. Using algorithms, dermatologists can analyze irregular moles and diagnose serious skin cancers such as melanoma. Although this technology should not replace a biopsy, it helps with giving an early identification.
  • Robotic assisted therapy: Bionik Laboratories in Toronto and Watertown, Mass., use robotics and AI to assist patients in their stroke recovery. A robotic arm and hand use digital algorithms to detect motions that patients can’t execute during therapy and guides them through it. It can help patients perform more recorded movements per hour than they would have if working with a physical therapist alone.
  • Caption Guidance: The Food and Drug Administration just approved this AI-powered software, which can help medical professionals capture, without any specialized training, echocardiographic images of a patient’s heart that are of acceptable diagnostic quality. Machine learning trains the software to spot high-quality 2D ultrasound images of the heart and even record video clips of it, changing the way heart disease is diagnosed.

Is your solution truly patient-centric?

We live in a world of consumerism and companies are ever-increasingly focused on doing more to satisfy their customers. However, healthcare is different as a customer is not a typical value or experience seeker, but a patient in need of care. Healthcare in most countries is a fundamental right of an individual, and one of the core tenets of evolution and progress. And hence, every year all the stakeholders including the government, academic and research institutes, pharma and medical device companies, hospitals and the public pour crores into research and identification of solutions for better care.

As all these stakeholders focus on innovation and the next-best thing in healthcare, one must ask if the problem of improving patient care and health outcomes is truly being solved. Every year India sees innovative solutions either driven indigenously or imported from other countries and contextualized for the local healthcare system. However, most of these solutions providers given the siloed nature of the industry take a very microscopic view of the disease, trying to solve for one pain point through their product or service. We have identified a couple of simple yet commonly observed case-studies to highlight the problem and share a patient-perspective as they interact with these innovative solutions, developed to help improve their condition and quality of life.

Case-study I:  An elderly patient on regular dialysis

Let’s take a case of an elderly patient having diabetes and related kidney failure and requiring dialysis on a regular basis. The doctor will do everything he or she can by prescribing the right care, regular procedures and follow-ups. However, there are other facets to the disease management and things that a patient can do himself or herself as well such learning more about the disease, precautions, side-effects, adhering to a regular medicine schedule, regularly measure hemoglobin levels as they tend to deteriorate over time, work with a dietitian on an adequate meal plan and so on.

As we look at these challenges, there are multiple solutions that are presented to the patient including reminder apps for improving compliance, lifestyle management application for diabetes management, diary to maintain a regular log of hemoglobin control, or a home-based hemoglobin measurement device (like the home-based glucometer). As we look at these many great solutions from a patient perspective, a few natural questions that emerge are: (a) how many applications and devices can a single patient manage? (b) how does all the data come together from these multiple solutions, and (c) what if the patient has other disease which hasn’t been covered as part of these disease management solutions?

Case-study II: A child suffering from Juvenile Idiopathic Arthritis

Juvenile or childhood arthritis is a condition where a child undergoes bouts of painful swelling inflammation of joints. While the course of treatment is relatively well-established including physical therapy, pain-killers, corticosteroids, DMARD’s and surgery in some rare cases, given the young age of the patient there are multiple open questions that remain to be answered: (a) how do you motivate the child to get regular physical therapy, (b) how do you alleviate the pain during treatment and, (c) also how do you support the education of the patient during this journey?

With today’s technology evolution such as introduction of gamification in healthcare, digital patient education platforms, and virtual reality to help combat pain, the future of this treatment looks promising. Stakeholders will have to however work on building a holistic ecosystem and not siloed solutions using the foresaid technologies, ensure that the experience for the child remains personalized and more importantly humanized, and continuously ensure that all this eventually leads to improvement of clinical outcomes.

During past few years of my experience in studying the patient journey for various diseases, evolution and deployment of various innovative solutions and the unmet needs, I have realized that there are four key elements that define any patient-centric solution:

  1. Information / Engagement: Quality of information shared, and the degree of engagement achieved with the patient
  2. Channels: Select the most appropriate and effective channel for each activity
  3. Patient Journey: Ability to engage at each stage of patient journey and bring the right value proposition
  4. Personalization: Personalization or customization of the services to the extent possible and in the right context

Below map indicates a reference framework for identifying different pain-points and areas of considerations as we design a solution for any disease area.

Stakeholders need to consider the following factors and answer related questions such as:

  1. Information / Engagement: Are we enabling the patient with all the information and engagement aspects across the spectrum? A pharma company might be more inclined to share prescription guidance and a dietitian might be more inclined to share only a meal plan, but then such an approach would mean that the patient must shop around the ecosystem to for information
  2. Channels: What are the right channels for disseminating the information amongst the available options? Each provider might not have all the channels, but there are ample opportunities to collaborate and ensure the right channel partner is involved
  3. Patient Journey: What stage of the disease journey is the patient going through, and based on that are we addressing the right needs of the patient and the care-giver?
  4. Personalization: Does the solution require personalization, humanization and contextualization based on the various outlined parameters?

During introduction of the recent healthcare reforms in US, one of the most emphasized roles was that of a ‘care coordinator’, someone who can stitch a holistic experience for the patient. We seeing some interesting solutions being introduced in India as well for 360-degree management of diabetes and a few other chronic diseases, which include delivering the medication to the patient on time, timely reminders, education on using the insulin pen correctly, diet advice, answering any other queries the patient has, lifestyle guidance and counseling. While most stakeholders do not have all the capabilities internally, the most encouraging sign is that they are collaborating with each-other with one common goal of helping the patient. Are you working towards the same?

Opportunities & Challenges in Healthcare in India

Very recently I had this great opportunity to give a talk regarding “Opportunities & Challenges in Healthcare Sector in India” during one of the Start-up Saturday sessions organized by Headstart Network, at Ahmedabad Management Association. Let me say this upfront that I am not expert on the healthcare sector in India, still trying to find my feet on the ground in past 15 months working on my own preventive health assessment start-up Remedy Social. However, here are a few experiences and observations based on my efforts in the past few months that I had shared during the presentation & wanted to share with a broader audience so that more people can benefit from the same.

t is not secret that healthcare is one of the largest spend drivers in developed countries, responsible for anywhere between 12% to 18% of GDP for various Western countries. However, despite all the major developments and economic progress, India still remains one of the countries with a lower spend on healthcare with the number being somewhere around 5-6% of the overall GDP being spent on healthcare. Pure macro-economic interpretation of these numbers suggest that Indian economy will be growing at 6-10% per annum and on top of it our healthcare budgets will catch-up with Western nations taking the industry CAGR to somewhere around 18-20%, which is highly impressive.

Also, there are a plethora of opportunities in this field as one has an opportunity to play across multiple sub-sectors as covered in various verticals in the below diagram, and an opportunity to develop a niche across various horizontals based on expertise in specific skill-sets that you bring to the table. While I show this framework, I am of course cognizant of the fact that describing the entire sector is less of an article and more of a book writing exercise, and also acknowledge the fact that one can never be 100% comprehensive in covering the breadth and depth of the sector.

Not going through the pain-staking task of describing all the boxes above, I would like to mention a few that excite me the most as we look forward to the progress of this sector:

  1. Marketplaces: One of the key challenges in healthcare has been access to right information. More than anything else, marketplaces start addressing information asymmetry allowing people to access the best information, products and services without having to pay an additional premium for the same
  2. Digitization: We have been a few years behind the other sectors when it comes to IT sophistication, but digitization creates avenues for a lot of user-friendliness, data creation and analytics, improved efficiency, service quality, etc.
  3. Home Care: Most importantly, home care brings healthcare to the patients home, providing care within an environment which is more preferable for the patient and less expensive as well. It generates convenience, improve care, reduced cost and higher satisfaction. This sector had always existed but in a fragmented and unorganized manner. Now it is being organized and structured, creating new avenues in improving care and patient experience.

Moreover, there is a high level of perceived or actual unmet need amongst both consumers and the care providers that I have experienced. Consumers or patients are looking for more: (a) awareness & transparency in the system, (b) improved accessibility to services, (c) cheaper solutions that make care more affordable, (d) improvement in quality of service, and (e) above all an improve experience while getting care.

At the same time, healthcare providers are struggling with: (a) people issues as workforce availability, recruitment and retention continues to be one of the biggest challenges, (b) process issues in terms of ensuring operational efficiency and managing EBITDA’s, (c) performance pressure for ensuring quality and consistency, both in terms of clinical quality and customer service, and (d) publicity as they need to constantly identify appropriate avenues to improve awareness and attract more patients

Despite of all these gaps and growth opportunities in the industry, if only it were that easy to establish and grow a healthcare enterprise … what more could one wish for. This a very nuanced industry, requires a lot of context around the science, the process and the inherent age-old culture that drives this industry. Here are the top six challenges that one should be aware of and build a mitigation strategy around as you venture into this sector:

  1. Business of Trust: Health is always a sensitive area and people don’t trust you very easily with serving them, it takes time to gain trust of doctors & patients in this industry
  2. Set Stakeholder Interactions: Healthcare ecosystem stakeholders have strong connections, set incentive and revenue sharing models, which you need to understand and carefully position your service within that construct
  3. Very Nuanced: Healthcare is not straight-forward like any other industry where one can go ahead and build aggregators, marketplaces, etc. and leave it open to vendors for listing and servicing individuals. Regulations, workflows, service quality levels, etc. are more complex and nuanced.
  4. Talent is Expensive: As a result of the nuanced nature of industry, talent is expensive in this field. It ain’t easy to get people who are knowledgeable, talented and experienced in this industry
  5. People Don’t Spend: Despite of high cost involved in developing capabilities and servicing individuals, people still don’t spend that easily on healthcare. Health is not always a top priority for many individuals unless it becomes an emergency
  6. Competition from Large Incumbents: Above all these is aggressive competition from large incumbents with deep pockets, that are heavily expanding their service portfolio to provide a 360 degree coverage. Whatever service or product innovation you might develop, usually it is very easy for these large players to emulate and provide it across a wide geography

Now all this being said, this list wasn’t meant to scare anyone or discourage from entering this market. However, the idea is to help others like myself be better prepared as you venture into this promising space. It always been my core philosophy that there is no point pondering … the only way to do a start-up is to “get started” … & find a way to just survive long enough, till you succeed …