Pharmaceutical sector faces major shake up

Apps, not drugs

When was the last time you bought a CD? For most of us, it’s probably a few years hence – testimony to the way the music industry has been totally transformed by digitalisation. People are still listening to music, but there are fewer and fewer manufacturers of CDs. Of course, music is much easier to digitalise then drugs. That’s certainly one reason why the pharmaceutical sector could take is rather slowly, as discussed in this June 2015 study. Over the least few years, however, a number of inventive start-ups have been beavering away to undermine existing business models in the sector.

Today, how the pharmaceutical sector will be disrupted by digitalisation is becoming increasingly clear. In this series of posts, we discuss how this will happen – what we are already seeing today and how this is likely to develop in future. In the first post, we look at mobile apps. 

Further blog posts of the series are Wearable pharmaceuticals and Digital implants: Healing from the Inside.

Medical apps for pharmaceutical clients

In themselves, apps in the pharmaceutical sector are nothing new. Indeed apps aimed primarily at providing customers with information and improving treatments have been around for a few years. Nowadays, almost every potential customer owns a smartphone and can therefore benefit from such products. What’s new, however, is that mobile apps have become so sophisticated that in some cases they can actually replace conventional drugs.

But why do patients use medical apps? Currently, the main benefit is simply being better informed. Pharmaceutical companies can send out updates, allowing them to react rapidly to any new medical discoveries. Well informed users in turn are able to recognise disease earlier, so that they become new users of a drug. Apps can also complement package inserts, providing patients with better information on their treatment and reducing anxiety. Another important function is to remind patients of taking their drugs at the right time, for example. Improved patient compliance results in better treatment results, leading to increased prescribing of the drug involved.

Medical apps as user interfaces for medical devices

Drug delivery and companion diagnostic medical devices are increasingly being operated by the patient themselves. This allows them to be used at the optimum time, which can improve efficacy. By being patient-operated, such devices also reduce the cost of care provision by health care professionals. So that patients can carry them with them at all times, these advanced systems need to be as compact as possible. In addition, patients need to be able to operate them independently without too much prior training.

Mobile apps can be made very intuitive, and allow medical devices to be made smaller, since they no longer need anything more than a very rudimentary user interface. This makes a smartphone with an appropriate app the ideal user interface at the point of care. Diabetes care apps are already well established. Over the next few years, we expect to see ever more apps enabling patients to operate medical devices, including drug delivery devices, themselves.

Mobile apps that replace drugs

There is also a new idea on the horizon, an idea far more spectacular than information apps or apps for controlling medical devices: digital medicine. This involves apps which remove the need to take chemical ingredients altogether. The best known is an iPad app from Akili used to treat ADHD. Akili benefits from the fact that, because many of its target consumers have access to an iPad, production and distribution costs are negligible.

Akili Interactive describes itself as “a prescription digital medicine company combining scientific and clinical rigor with the ingenuity of the tech industry to reinvent medicine.” Akili is developing digital therapeutics. Treatment will no longer take the form of pills, but will instead consist of a high quality video game.

The game uses the same storytelling and reward mechanisms as standard videogames. But beneath the surface, it features mechanisms to act on neural systems and algorithms that dial the level of stimulus up or down to meet the needs of the patient. Akili now plans to file for approval with the FDA under the 510(k) medical device pathway.

If Akili can get AKL-T01 past the FDA, attention will then turn to the willingness of payers to cover a novel approach to treating ADHD and the number of patients who want the therapy, either because amphetamines and methylphenidate are ineffective or their parents are unwilling to use pharmacological interventions.

Data mining and new business models

From better, more up-to-date information, to more effective treatments, to a better insight into their treatment or even treating diseases directly, the benefits to patients are clear. But what about providers?

They get their hands on valuable data, giving them a clear edge over their competitors. They learn from user ratings and are able to cultivate a close relationship with users, using tools such as chatbots, for example. Apps also make it possible to develop novel sales and payment models. Here, the pharmaceutical sector has the advantage of being able to learn from other industries which are further along the road to digitalisation.

Summary: Providers of mobile apps can gain an important edge over their competitors. Whilst this is unlikely to turn the sector on its head, it’s certainly going to lead to some lasting changes. If you want to know how pharmaceutical companies can meet this challenge and adapt their business models for digitalisation, you might like to attend my talk at the Health Meets Future Summit in Frankfurt on June 18, 2018

Further blog posts of the series:

Wearable pharmaceuticals
Digital implants: Healing from the Inside

Comments (2)

Veljko Z.

8 June 2018 at 23:39

Great post! Just to add another important view: what’s currently so critically missing is the feedback on the drug effectiveness and the observed side effects. The pharmaceutical company basically derives its findings from the drug trials (very expensive, and a limited number of users), they rarely get the feedback from the end users about it’s usage afterwards. Digitalisation would bring this valuable information back to the drug designers for more refinement, giving the company a lot of valuable data for perfecting the medicine… This advantage would be delivered practically for free and directly by the end users – it could be the very difference of success in the future.

    Jens von der Brelie

    Jens von der Brelie

    25 June 2018 at 08:43

    Thank you Veljko. This is a very good point.

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