An analysis of recent digital health transactions uncovers practical ways for life sciences companies to achieve their digital transformation goals.
Nirvana for any life sciences company is the successful and sustainable commercialization of a new product or service. When biotechnology companies or pharmaceutical manufacturers attain that highest state of being, it creates new possibilities from superior patient outcomes to formulary benefit coverage by payers, to record revenue and profitability.
In the new healthcare economy, the path to enlightenment is “digital transformation,” according to the digital health, advanced analytics, and patient-engagement gurus. But what does digital transformation really mean, when overuse of the term has rendered it virtually meaningless?
Digital nirvana for healthcare organizations requires a holistic approach to digital transformation, where payers, providers, digital health, and life sciences organizations strategically align on a core goal to create more engaged patients. Because engaged patients are far more likely to be adherent – meaning taking their medications, for example – and we know that adherence is directly linked to improved outcomes and lower total cost of care.
Guidehouse researched the biggest digital health transactions in 2021 that involved life sciences companies, identifying three practical applications of digital transformation.
Before going into detail on each use case for digital transformation, let’s look at the common challenges that life sciences companies of all maturity levels and sizes face in today’s digital health ecosystem.
Digital transformation challenges for life sciences companies
Established pharma companies and biotech startups alike are experiencing the following digital transformation challenges.
Personalized customer journey.
Biotechnology companies and pharmaceutical manufacturers have extensive patient data and disease expertise. Yet, they lack the integrated patient and disease data capabilities to create personalized customer journeys that address individual needs. With the focus of the industry shifting more toward the patient, life sciences companies must rethink how to leverage their robust datasets to identify patient segments and design patient-centric processes to enable a more personalized consumer journey.
In-house digital health capabilities.
Growing digital capabilities organically is time-consuming for life sciences companies in a value-driven healthcare world that demands agility to thrive in its quickly changing and disruptive environment. For many, it’s faster and more economical to buy than it is to build.
Identification of optimal digital solutions.
Many life sciences companies are eager to partner and capitalize on a wide suite of digital health capabilities. But most do their homework on what type of digital health partnership (strategic collaboration, clinical co-development with research institutes, collaborating with regional affiliate organizations or patient advocacy groups, etc.), asset (AI, virtual reality, etc.) or disease focus they really need to optimize their market presence.
Flexible and scalable partnerships.
Digital health partnership models are not one-size-fits-all for life sciences companies. Partnership models should be dynamic to meet the evolving needs of individual companies. These partnership opportunities can range from optimizing positioning through asset co-commercialization, offering a specialized solution for adherence enhancement, integrating data-driven approaches to patient segmentation, or adding efficiencies in capturing real-world evidence. The partnerships also require a sharp focus to have a tangible effect on health equity by aligning existing services.
Efficient and focused collaboration.
To build complementary digital health solutions, life sciences companies must collaborate with a partner. Collaboration sparks tactical and strategic discussions on how to efficiently and effectively use both firms’ strengths to maximize clinical outcomes, stakeholder connection, and market performance.
Integrated technology infrastructure.
Digital transformation requires pulling vast amounts of data from many different sources. Investing in a connected infrastructure consisting of sensors and IoT devices, application program interfaces (APIs), and similar technologies is necessary for data collection. However, many companies are hesitant to invest in integrated technology capabilities and for some that do, efforts can be siloed, defeating the purpose to improve efficiencies.
Digital transformation is the key to solving these challenges, whether common to all life sciences companies or unique to individual companies based on size and market tenure.
Breaking down the why and the how of digital transformation
Guidehouse analyzed 103 digital health arrangements in 2021 that involved life sciences organizations. The transactions included strategic partnerships and mergers and acquisitions between life sciences and digital health companies. The deals fell into eight categories.
While this breakdown reveals why life sciences companies are partnering with digital health companies, there are three distinct commonalities around how these life sciences organizations that partnered with, merged with, or acquired a digital health company implement practical applications to go digital.
Taking the mystery out of digital transformation
Life sciences organizations of all types, sizes, and maturity levels must see digital transformation for what it is: a tool to improve their clinical, financial, and operational performance. Like selecting any new tool, companies need to know what they want to fix, the type of tool that will do the job, and where to get the tool they need.
Guidehouse is helping life science companies make these critical decisions and successfully and sustainably commercialize their new products and services.
Maya Weber, Junchi Lu, Bharath Ravichandran, Maya Desai
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