2017 has been…quite the year, healthcare and otherwise. With so much happening let’s recap on some of this year’s major trends across the health space.
Healthcare focused on the consumer relationship in 2017
Carriers realized that they had to own the consumer’s first touchpoint with the health system to control cost, making sure people didn’t see doctors unnecessarily or get other tests and services they didn’t need.
CVS realized its valuable retail footprint was the healthcare touchpoint for many consumers and bought Aetna to take advantage of that. UnitedHealth bought Davita Medical Group to build out its direct care services (among other things). And our analysis on Oscar showed that it’s trying to encourage its members to use the telemedicine option first when they’re sick (seen in some of its earliest patents).
Simultaneously we saw companies go the consumer/wellness route to establish their brand and relationship with consumers before moving into healthcare. Fitbit went from fitness tracking to monitoring sleep apnea, while 23andme pioneered the direct-to-consumer kit model, going from ancestry to clinical uses like hereditary disease risk. These companies have a relationship with consumers and make money from their wellness side business, a valuable place to be.
We’ll be talking about more trends in the consumerization of healthcare in our research briefing on January 4th, join us.
Big Tech inches to healthcare
You know who has great direct-to-consumer relationships? Tech giants. We saw many of the major tech companies start circling the waters closer and closer to healthcare.
Apple has made the most concrete steps, as we outlined in our Apple in healthcare teardown. Among its many advantages, Apple and other tech companies have a significant amount of scale. This is a necessity when sitting at the healthcare table.
Amazon has been eyeing the pharmaceutical and medical distribution space but hasn’t made any concrete moves, while Google intends to bring its expertise in AI to diagnostics, population health, and drug discovery. And if they’re not building it themselves, almost every tech giant is investing or acquiring companies in healthcare.
Pharma adds services and outcomes-based pricing model
The combination of genetics flooding the market and generally lower ROI on R&D for drugs has pushed pharma companies to change things up a bit.
Kymriah was a breakthrough for CAR-T cell therapies, but also indicated one of the first times a pharma giant has pushed for an outcomes-based pricing model together with CMS based on the drug’s efficacy. In parallel, we saw more pharma companies take an interest in digital therapeutics, which has always been an outcomes-based business. Roche, for example, acquired diabetes management company mySugr earlier this year.
Digital therapeutics also represents a services approach to treatment, a departure from pharma’s typical goods/product core competency. Another area we saw this is with Otsuka and Proteus Digital Health, where we discussed Otsuka adding a services element to help differentiate its now off-patent drug Abilify to compete with the flood of generics.
The cutting edge of biology and tech
Finally, we saw some awesome breakthroughs in healthcare. AI, one of the hottest tech trends as a whole, saw the most activity in healthcare (as seen on our AI deals tracker). Everything from patient risk, to chatbots, to drug discovery saw an AI application. However, we’re still waiting for big success stories here.
On the biology side we saw our first approved CAR-T cell therapy and more experiments using CRISPR/Cas 9, including the first embryo gene edit in the US. At our A-Ha! conference we spoke to Othman Laraki of Color Genomics, who told us how its using CRISPR today.
