Will advances in digital health be driven by a combination of Silicon Valley know-how and clinical trial expertise?
At the JP Morgan Healthcare investor conference in January, there was a general pessimism during what has since become the longest government shutdown in history – one that delayed IPOs, new drug application filings, creating challenges across the industry.
Still, optimism was voiced by US Food and Drug Administration (FDA) Commissioner Scott Gottlieb who, calling in remotely, reaffirmed the agency’s commitment to modernizing the drug review process.
“We were very excited to see that kind of announcement and continued trend as we move toward patient-centric solutions,” said David Kiger, chief commercial officer, Datacubed Health, who was among the conference attendees.
The company’s president and CEO Paul Glimcher, PhD, noted the importance of the FDA’s commitment to “smoothing the road to mobile health and digital health in the coming year,” in spite of the government shutdown. However, the absence of Gottlieb at the conference also highlighted the challenges posed by a general “government uncertainty,” which is cause for worry.
“The shutdown slowed the industry enormously,” added Glimcher. Political unrest has also strained the US’ relationships with other countries, particularly in Asia. “These are potential markets for us that we have to be cautious about because we really don’t know what’s going to happen in the next year,” Glimcher explained. “These are real concerns for us.”
The question of accepting foreign investments, specifically Chinese venture capital, was also the topic of conversations at the conference. “We’ve already had a general impression of how different countries work together, it just seems a little more acute this year where certain people were actually declining meetings based on maybe fear in general,” said Kiger.
This was a new topic of discussion this year, in addition to the government shutdown, all of which is uncharted territory, he noted.
“Uncertainty is a big word right now,” added Glimcher, “From the point of view of government and inter-government relations.”
Market growth vs maturation
Despite the macro challenges, however, both Kiger and Glimcher agree the potential for digital technology to transform the industry is there – but it’s not necessarily translating into studies currently.
“We don’t want to confuse an explosive rate of growth with maturity,” said Kiger. “It’s clear that in the last year the use of digital technology in pharma has been growing explosively, but it’s still a minority of the companies that have really taken on a significant digital program.”
It is likely the industry is still a couple years away from seeing the maturation of digital. Though this year it will see pharma wanting to incorporate new technologies into their clinical studies.
“The first evolution of patient technology was about equivalence, and how does pharma make a paper form equivalent to how it would look on say an internet browser,” explained Kiger. “Pharma is now getting past that and realizing they need to see better compliance rates, it’s not acceptable to just make an equivalent form on an app or web browser.”
Standing out amongst the noise – and up to Silicon Valley
What pharma is looking for in a provider is what Glimcher said it has always been looking for: Improvement in cost, compliance, and data.
“The leaders in the next five year are going to be the companies that can achieve low cost, high rates of compliance, a broad ability to incorporate new real-world evidence, built into a SaaS-like platform to achieve the economies of scale that pharma is looking for,” Glimcher added.
Outside the top one or two players, Kiger said there is a lot of room for a number of startups to be very successful, with the rising tide lifting all boats. This, mirroring the CRO industry, which through consolidation has opened up a number of mid-tier players.
“With the overall market continuing to increase, I think that benefits numerous startups,” added Kiger. “In spite of the headwinds, I see a positive message in both of the industries.”
During the first round of M&A in the digital health space, several startups were folded into large corporate environments, where innovation is often limited.
“The result is that while a lot of large players do have in-house digital,” said Glimcher, “those companies are a step behind what the innovative startups are doing, maybe even two steps behind.”
Yet, there are several startups in Silicon Valley led by people with limited experience with what pharma is trying to do, which Glimcher said “is not a good thing.” Why? Because though innovative, they lack a true understanding of what their clients need.
“We’re always struck by this idea that you can come in from Silicon Valley with no real knowledge of our industry and just tell all of us how to do business,” added Glimcher, who doesn’t believe innovation is going to come out of Silicon Valley, per se.
“It’s going to come from marriages between people who’ve been in and out of clinical trials their whole lives and people who have been in and out of Silicon Valley their whole lives,” he explained. “Any company that comes to you and says that they don’t need both is a company that doesn’t’ get it.”
What Kiger said has always driven innovation is the market, which big pharma’s innovation hubs aren’t subject to. “The market is a great discipliner,” added Glimcher.
Excitement, anxiety, and ‘a general human resistance’
Keeping Kiger up at night is both a general excitement of the comfort level of people using apps, and anxiety that adoption is not happening fast enough.
“What’s the reluctance when most of the technology and the concerns have been proven out, that we’ve addressed things such as security and privacy compliance?” he asked rhetorically.
“There is this general human resistance that our industry just takes a while to adopt technologies, whereas in other industries technology is more willingly and readily adopted.”
For Glimcher, he is struck at how difficult it is to convince large pharma that there may be better ways to collect data. “We see a lot of hesitancy,” he said. “What I wake up at night frustrated about, is it’s often possible to replace patient-reported outcomes with ground truth.”
“It would be great for the primary endpoint not to be a report of a patient about the primary endpoint but an actual measurement of the primary endpoint,” Glimcher added. “I’m frustrated with how hard it is to convince people to give us a chance to show them that.”