The business case for Patient Companion Solutions

In recent years, the proliferation of digital health solutions has been nothing short of remarkable. This surge can be attributed to the advancement of accessible digital technology and, conversely, the mounting pressure on healthcare systems driven by an aging population and the increasing incidence of chronic ailments. In 2022, the global digital health market reached an estimated valuation of USD 211 billion, with an anticipated annual growth rate poised to reach 19% from 2023 through 2030¹. While recent months witnessed a decline in funding for digital health, reflective of overarching investment sentiments, the landscape exhibited a promising resurgence as digital health mergers and acquisitions (M&A) transactions doubled in the first quarter of 2023, signalling renewed interest in digital health products from the venture capital firms². Pharmaceutical industry in turn sees a slowdown of digital health investments or even closure of digital health units, without losing their interest in it, as they reimage digital strategy and search for new ways to integrate digital medicine and health technologies into the core business³.

An example of digital health is Patient Companion Solutions, tools that help patients manage chronic diseases. These solutions benefit various healthcare stakeholders, including providers, payers, and pharmaceutical companies. The global market for disease management apps was worth USD 8.7 billion in 2022 and is projected to grow at a rate of 12.3% annually from 2023 to 2030. This growth is driven by an increasing prevalence of chronic diseases in aging populations and greater awareness of a healthy lifestyle. The largest segments in this market are obesity and mental health, each representing over 26%, followed by cardiovascular issues and diabetes⁴. Additionally, there's a growing demand for digital health services that aim to improve the efficiency of traditional treatments and control healthcare costs⁵.

However, pharmaceutical companies often struggle to define a profitable strategy for their patient companion solutions and lack a clear vision of how to get the most out of their investments in digital health assets. It's crucial to define the main ways to create value and generate revenue, as well as understand the key factors for success and challenges in digital health solutions when building a strong case for patient companion solutions.

Companion solutions can be customized to fit different use cases and benefit wide range of stakeholders

Patient Companion Solutions (PCS) represent platforms, patient portals, or applications designed to provide personalized support throughout a patient's treatment journey. They serve as a conduit for seamless communication between patients and healthcare providers (HCPs) while assisting individuals in integrating therapy seamlessly into their daily lives. This comprehensive approach spans the spectrum of the patient journey, encompassing critical stages like awareness and diagnosis, engagement with HCPs, hospitalizations and transfers, as well as the actual treatment process. The overarching aim is to empower patients with a lucid understanding of their options throughout this journey, easing interactions with healthcare professionals, often fraught with complex medical terminology, and simplifying their overall experience.

Patient Companion Solutions yield valuable data during usage, offering insights into the patient population, health outcomes, and the patient experience. Moreover, this data can be instrumental in identifying rare medication side effects or delayed-onset occurrences, bolstering the evidential foundation concerning long-term medication safety and efficacy. Both corporate entities and regulatory bodies can harness this trove of patient-reported data to enhance medication safety protocols and optimize healthcare interventions.

To differentiate themselves, existing solutions strive to augment their appeal by integrating unique feature combinations, thereby fostering user adoption, reducing attrition through enhanced user experiences, and expanding their market footprint to encompass a wider user demographic. The functional repertoire of Patient Companion Solutions extends to various use cases, including:

1. Virtual care options, facilitating seamless patient-HCP communication.
2. Prescription refill reminders, enabling patients to effectively manage their medications, including remote orders, order tracking, and real-time notifications of delivery times.
3. Patient and caregiver education materials, tailored to enhance comprehension of the disease and therapy options, specifically customized to the patient's disease state. This encompasses essential training, such as injection administration techniques, as well as assistance in identifying suitable specialists.

Figure 1: Illustrative use cases of digital companion solutions across the patient journey

Pharmaceutical companies can create value from patient companion solutions in two ways

Pharma companies can create value in two ways, firstly from revenue derived directly from the utilization of the asset. Secondly from incremental revenues generated by the assets integrated into existing workflows and processes, bolstered by the digital asset's complementary support.

Revenue through the direct use of asset

Pharmaceutical companies have shifted their focus toward digital health solutions in pursuit of enhanced revenue streams, especially under the pressure of diminishing returns from pharmaceutical R&D efforts⁶. Majority of the global pharmaceutical companies are actively engaged in forging partnerships within the digital health realm. Notable examples include Sanofi's collaboration with Health2Sync⁷, Pfizer's alliance with Cue Health⁸, and Novartis's partnership with Kaiku Health⁹. Over the past 18 months, Pfizer, for instance, has ventured into two crucial partnerships. The first, with Ada Health, led to the development of a COVID-19 Care Journey app designed to support individuals at heightened risk of contracting Covid¹⁰. The second, in conjunction with Alex Therapeutics, has spawned a digital smoking cessation program in Germany¹¹.

Pharmaceutical companies primarily employ the following models to generate direct revenue from the patient companion solutions:

• Direct-to-Consumer: Subscribers are billed directly for fees and in-app purchases.
• Reimbursement Schemes: Insurance companies bear the expenses as part of healthcare plans, relieving consumers of direct costs.

Although concrete evidence regarding the direct revenue potential of companion solutions remains somewhat scarce, pharmaceutical firms have made noteworthy acquisitions of mHealth solutions. For instance, Pfizer's acquisition of ResApp Health, valued at $75 million, utilizes AI technology for diagnosing and managing respiratory diseases. While Pfizer reported a net loss of approximately $7 million in both 2021 and 2022, revenues surged by a staggering 3503% in 2022¹². Notably, the Pfizer-ResApp deal encompasses an R&D license agreement, fostering collaboration in Covid-19 product development, where ResApp's solution plays a pivotal role in collecting patient data to support drug development.

The potential for direct revenue generation remains constrained by mounting competition and low market entry barriers for mHealth applications. The perception of these solutions as integral to treatment, demanding reimbursement by insurance providers, dampens consumer willingness to incur out-of-pocket expenses for subscriptions¹³. Conversely, reimbursement schemes and fee waivers can bolster the competitive edge of an mHealth solution, augmenting market share and supporting an indirect revenue generation model.

In summation, pharmaceutical companies anticipate that digital companions will primarily augment the revenue of their core assets indirectly, rather than serving as standalone revenue sources. Consequently, these companions are frequently bundled without additional charges or are seamlessly integrated into the pricing structure of the pharmaceutical products they are designed to complement¹⁴.

Incremental revenues for inline brand supported by digital asset
In business models focused on indirect value generation, the emphasis shifts from subscription fees to the core revenue source, notably amplified sales of medication or extended treatment durations. These outcomes are driven by three pivotal effects facilitated by companion solutions: early and expedited diagnosis, the identification of a greater number of patients, and improved adherence to medication regimens. The ensuing upsurge in medication sales volume carries an estimated potential ranging from 3% to 20%, contingent upon the specific therapeutic domain, as illustrated in (Figure 2)¹⁴.

Figure 2: Overview of the two business models most commonly used for patient companion solutions

Additional advantages encompass transformative effects on the pharmaceutical value chain, facilitated notably through the generation of real-world evidence. These benefits encompass:

1. Enhanced comprehension of real-world treatment pathways.
2. A fortified value proposition, underscored by compelling evidence pinpointing patient groups deriving the most substantial benefits from chosen treatment alternatives.
3. Heightened scrutiny of drug safety (pharmacovigilance) during the post-market phase.

CASE STUDY - MySugr integration with Roche Diabetes¹⁶ and Novo Nordisk¹⁷ smart pen

MySugr, in collaboration with Roche Diabetes and Novo Nordisk, has harnessed digital technology to create a patient-centric solution. This innovative tool enables patients to track their insulin dosages and administration timing by connecting their mobile phones to compatible medical devices for blood sugar monitoring and insulin cartridges. Moreover, the solution empowers patients to compile and securely share their diabetes-related data, encompassing factors like blood sugar levels, deviations, carbohydrate intake, activity levels, as well as hyper and hypo episodes, with their healthcare providers through a secure platform such as the Roche Diabetes Care Platform. This connectivity enables the optimisation of the patients diabetes therapy.

The MySugr solution offers an electronic Logbook for self-monitoring and facilitates the tracking of critical biomarker data, including HbA1c levels, to discern disease trends. Consequently, MySugr serves the dual purpose of:

1. Enhancing disease management through daily monitoring of vital parameters, thereby aiding informed therapy decisions through medical data sharing
2. Improving therapy adherence through motivational cues, real-time therapy status feedback, and incentives for compliance.

 Retrospective studies have illustrated improvements in health outcomes and a reduced risk of severe diabetic events as a result of this innovative approach¹⁸.

Currently, the freemium solution boasts over 4 million registered users across more than 80 countries. Complying with EU regulations, the MySugr Logbook holds the classification of a Class IIa medical device, while the MySugr Bolus Calculator is designated as a Class IIb medical device¹⁹. Notably, following its acquisition by Roche in 2017, MySugr has assumed a pivotal role as the primary interface for patients within Roche Diabetes Care's expansive ecosystem of patient-focused digital health services. Importantly, it maintains compatibility with a diverse array of medical devices while operating as a distinct legal entity²⁰.

Commercial success of Patient Companion Solutions relies on leveraging SaaS success factors and building on synergies with the pharma core business

According to our latest innovation analysis, the pharmaceutical industry has experienced increasing development costs and declining peak sales forecast²¹. This unfavourable environment has spurred pharmaceutical companies to seek innovative avenues for augmenting revenue streams, both from current assets and those on the horizon. A viable solution comes in the form of digital health technology.

By venturing into the realm of patient companion solutions, pharmaceutical firms can broaden their reach to previously underserved patient demographics while concurrently enhancing the experience of those already within their treatment purview. This shift necessitates pharmaceutical companies to venture into novel territories within the digital health arena, domains previously dominated by software engineering firms.

The design of a patient companion solution necessitates meticulous consideration of various facets, including:

1. Commercial and Portfolio Strategy: Evaluating the potential impact of the solution on the uptake of current and future assets and discerning prioritization strategies.
2. Go-to-Market (GTM) and Regulatory Strategy: Striking a balance between the benefits of expeditious GTM for Class I solutions and the prospective intensification of competitive pressures due to low market entry barriers. The question arises whether medical software can swiftly garner trust among physicians and thereby warrant an accelerated GTM approach.
3. Commercialization Strategy: Understanding disparities in local regulatory requisites across target markets and gauging the maturity level of reimbursement frameworks for digital health solutions and services.
4.  Value-Based Partnerships: Pondering ways to drive the adoption of the patient companion solution among patients and healthcare providers while concurrently nurturing high retention and trust levels.

The viability of a patient companion solution hinges on a pharmaceutical company's aptitude for aligning the solution's intended purpose with the appropriate asset and tailoring it to cater to the treatment journeys of specific patient cohorts, concentrating on unmet medical needs. Early involvement of other key healthcare ecosystem stakeholders, such as healthcare providers and payors, proves pivotal in ensuring widespread solution adoption among the target patient groups.

In essence, our experience underscores the criticality of defining a clear business case, thereby securing buy-in from leadership and enlisting the active engagement of both internal and external stakeholders during the solution's developmental phase. Such factors are paramount in the creation of a commercially successful digital health product, delivered promptly and with requisite resources. The alignment of key solution characteristics, including security, scalability, and design, along with the target operating model, is essential to harmonize with the commercialization strategy for the digital health product across its entire lifecycle, from conception to fruition.

Contacts

Prateek Natani

Director

pnatani@deloitte.ch

+41 58 279 9009

Prateek is a leader in the Monitor Deloitte Life Sciences practice, with a primary focus on Commercial and Digital Health Strategy. Prateek has over 16 years of experience in management consulting. He... More

Dr. Philipp Mayrl

Partner

pmayrl@deloitte.ch

+41 58 279 7370

Philipp is a Partner in our Zurich office, specialising in the Life Science industry. He helps his clients develop corporate and business-unit strategies and serves leading organisations to architect ... More

Endnotes

1 Digital Health Market Size, Share & Trends Report, 2030 (grandviewresearch.com)
2 https://www.cbinsights.com/research/report/digital-health-trends-q1-2023/
3 https://www.mobihealthnews.com/news/biogen-confirms-closure-biogen-digital-health-retreat-apple-study
4 Disease Management Apps Market Size, Share [2023 Report] (grandviewresearch.com)
5 https://statics.teams.cdn.office.net/evergreen-assets/safelinks/1/atp-safelinks.html
6 https://www2.deloitte.com/ch/en/pages/press-releases/articles/deloitte-pharma-study-drop-off-in-returns-on-r-and-d-investments-sharp-decline-in-peak-sales-per-asset.html
7 Sanofi Enters into a Partnering Agreement with Health2Sync (prnewswire.com)
8 Cue Health Collaborates with Pfizer to Provide People who Test Positive for COVID-19 with Actionable Health Information to Better Inform their Treatment Journey
9 Novartis and Kaiku Health to Jointly Create a Patient Monitoring... (healthcaretechoutlook.com)
10 Ada Health and Pfizer launch new Covid-19 Care Journey app - European Pharmaceutical Manufacturer
11 Pfizer signs up to promote Alex Therapeutics' smoking cessation app in Germany | Fierce Biotech
12 https://www.resapphealth.com.au/wp-content/uploads/2022/08/2428078.pdf
13 Why Apps for Managing Chronic Disease Haven’t Been Widely Used, and How to Fix It (hbr.org)
14 https://www2.deloitte.com/us/en/insights/industry/life-sciences/importance-of-personalized-therapies.html
15 Deloitte analytics
16 https://www.mysugr.com/en/ipdm/
17 https://www.mysugr.com/en/novo-nordisk-integration/
18 https://www.mysugr.com/en/science-and-research/
19 https://www.mysugr.com/en-us/about-us/
20 Roche | Better together: A shared purpose to help people with diabetes
21 Measuring the return from pharmaceutical innovation | Deloitte UK