Embracing digital transformation: The new era of pharma and MedTech
Digital health is one of the fastest growing areas in the healthcare industry and holds the potential to significantly reshape today’s care. Healthcare companies across the globe have created (and sometimes already closed again) programs and partnerships in this field to support and extend their existing value proposition with digital solutions.
Despite numerous benefits to their clients - HCPs and indirectly patients - bold moves by pharma and MedTech companies in this area are still limited. The reasons behind this are diverse, however important factors include:
- Lack of direct touchpoints with consumers and patients
- Increasing regulatory requirements
- Execution challenges (e.g. strategy integration, organisational set up and pilot scaling)
- Uncertainty about business value, models, and ROI
The latter factor – uncertainty about business value, business models and return on investment – is one of the most frequently mentioned reasons limiting digital health activities. For many pharma and MedTech companies, digital health solutions are still perceived as ‘nice-to-have’ add-ons, rather than essential components of their digital revenue models. Sometimes, they are even seen as ‘margin killers’ rather than powerful drivers for business. Evidently, the value of digital health solutions is not always clear for pharma and MedTech. The complexity of business models in healthcare, especially in the era of digital transformation, lies in their often-indirect nature, where users are usually not customers, and the involvement of multiple stakeholders, where the same solution needs to generate value for patients, HCPs, and payers simultaneously. That’s why we want to shed some light on this at times confusing topic by sharing some of our key learnings from the last few years of consulting our healthcare clients.