C. Pennetier

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Who will win the digital race in the pharma industry?

Roche has just acquired mySugr, now the latest digital acquisition in the pharma industry. In the same time, Apple has hired the lead doctor of Stanford University's digital health initiative, Sumbul Desai, to take on an unspecified role in one of its health projects. Who will win this race? Big Pharma or giant Tech firms?

The health industry is mutating from diseases and patients to prevention and users. This mutation means creating a new link with people way before they get sick. The shortest path goes with digital transformation. That is why all Big Pharma companies try either internally or via acquisitions to develop platforms and digital interactions with people. However, their core customers are more or less sick people. It is difficult for the industry to change their image closely link to what is painful. They need to reach more people --ideally from the beginning of their life-- to bring value not by curing but by preventing diseases.

The big issue for pharmaceutical firms in this digital revolution, is the digital aspect itself because their core skills are elsewhere and they cannot attract easily the best engineers in the market. That is why following Roche, acquiring e-health startups became the #1 strategy. As reported in a Techcrunch article, for an undisclose amount around $100 Mn, mySugr has become the heart of Roche Diabetes Care’s new patient-centered digital health services. Roche plans to maintain its acquisition as an open and independent platform for health insurance companies, medical technology companies, and pharmaceutical companies. Roche planified this strategy a while ago, being a CVC --via their Venture Fund-- for mySugr. "The mySugr app serves as diary for diabetics tracking their blood sugar, medications and activity levels and works in cooperation with insurers."

In the same time, giant Tech firms like Apple use wearables to enter the e-health field. They have clearly a huge advantage to hire the best talents in the digital industry. Close to what mySugr does, Apple "is planning major new health features for future versions of the Apple Watch (see report from BGR). The website MacRumors reveals the hiring strategy in terms of health specialists at Infinity Loop:
Apple has made several healthcare-related hires in recent years. In September it recruited Dr Mike Evans, a staff physician from St Michaels Hospital in Toronto and an associate professor of family and community medicine at the University of Toronto. Two months later the company also hired Dr Ricky Bloomfield, who was director of mobile technology and strategy at Duke University Health System. Apple has also hired Stanford doctor Rajiv Kumar, who has experience using HealthKit to help patients with diabetes, and Dr Stephen Friend, who helped build the data infrastructure for many ResearchKit apps.

CNBC confirms the global strategy of Apple. The iPhone should serve as a a comprehensive health repository for every iPhone user, keeping track of medical data like doctors visits, lab results, medications, and more.

However, the Tech giants do not know how to deal with the FDA. Regulatory issues at least slow down the innovation process, surely constraint it and may even jeopardize it. When commenting the introduction of an Apple Watch being able to measure glucose levels, Apple CEO Tim Cook has said that Apple does not want to put the Apple Watch through the FDA approval process, something that would likely be required for the introduction of a glucose monitoring feature.

Today, the e-health sector is a battle field opposing giants: pharmaceutical firms on one side and high-tech companies on the other side. It is still difficult to determine which side will establish itself as a reference in the sector. The regulatory hurdle is huge because it can completely shake up innovation cultures inside Tech giants. Observers would bet on Apple and Microsoft. We cannot underestimate Big Pharma.


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