This year’s Frontiers Health event broke new boundaries with its hybrid format, an ideal platform to discuss the latest developments in digital health.
The conference combined streaming with physical events held at hubs across the globe, allowing socially distanced interactions at locations in Italy, Germany, Finland, Spain, Switzerland, Malta and the US.
It also provided an opportunity to reflect on what has been a turning point in digital health history.
Throughout 2020 health systems across the world rapidly switched to, or hugely increased their use of, digital technology as social distancing and lockdown measures were implemented in countries worldwide.
The challenges of COVID-19 forced a significant rethink of digital services and, opening proceedings, conference chairman and CEO of Healthware Roberto Ascione discussed this “new normal” and the sudden interest in digital health technology.
Maintaining momentum in digital health
Dr. Gottfried Ludewig, director-general of digitalization and innovation at the German Federal Ministry of Health, said in a keynote address that maintaining the digital momentum seen this year is a priority while the country hosts the EU presidency over the last six months of 2020.
In a landscape dominated by technology developed by US countries, Ludewig said that Germany’s goal was to encourage the development of digital health technology within the EU.
This could allow European payers more choice as they select technology such as telehealth consultations that have proven so vital over the last year.
“Digital health is the basis for a better healthcare system in the future,” Ludewig said.
“We are convinced that Europe should play an active role in fostering digital health. We want to create digital solutions here by ourselves.”
Data is the key to better medicines in the future and could help counter pandemics in the future, he added.
A new regulatory framework is due at the end of next year regarding the use of data in the GDPR, he noted.
In a break-out session later in the day, Dr. Michael Bitzer, vice president of consultancy firm Research2Guidance, said that despite a new reimbursement system for digital therapeutics (DTx) in Germany, there is still a reliance on old-fashioned and inefficient technology in hospitals.
Doctors still communicate with physical letters instead of emails and there is still a reliance on technology such as fax machines.
Reimbursement of digital health
Reimbursement of DTx in the US proved to be a major talking point on day two of the conference, after the former CEO of Proteus Digital Health discussed what he learned from one of the sector’s biggest failures: the ABILIFY MYCITE “smart pill.”
It was based on a pill with a tiny ingestible transmitter that communicated with a patch worn by the patient, which then sent readings to a smartphone app allowing doctors to check whether the medicine had been taken. ABILIFY MYCITE worked and was approved by the FDA for people with schizophrenia to monitor whether they had taken their meds.
But the technology never took off and Proteus, which had partnered on its development with Japanese pharma company Otsuka, filed for bankruptcy protection earlier this year.
Otsuka ended up buying Proteus’ technology soon after for around $20 million, a massive fall for a company that was once a digital health “unicorn” valued at around $1.5 billion.
According to Proteus’ former co-founder and chief executive Andrew Thompson, the product failed to take off because of the way drugs are funded in the US.
Thompson is now focusing on his role as managing director of Spring Ridge Ventures after leaving Proteus earlier this year but has had time to reflect on what went awry at Proteus.
He said the US reimbursement system rewards healthcare activity, but ABILIFY MYCITE did the opposite of that, reducing healthcare costs as well as healthcare activity and income for hospitals.
“In the United States, you get paid more for doing more. We do exactly the opposite of what a provider would do in the US, which is make more money,” Thompson said.
He called for reform to the funding system, arguing for credits to be paid to innovative companies that try and reduce costs for patients.
Thompson noted that this system is currently propping up Tesla’s research into more environmentally friendly cars: the big US car manufacturers cannot meet emissions targets so they have to pay credits to the California electric car firm to compensate.
Changing the way in which the system is funded would allow more patients to access innovative products, as well as broadening the range of products that receive investment.
He concluded: “What we proved is that digital solutions reduced ‘heads in beds’ and reduced minutes in clinics.”
A maturing sector
While there is a lot of innovation going on, he said the challenge for the industry is to scale up its products.
He predicted that this would be achieved through mergers and acquisitions in the coming years, driven by investors who are beginning to realize the sector’s potential.
Private equity is shaping investment and there is around $1.4 trillion, he estimates, waiting to be invested in the sector.
“CEOs of digital therapeutics firms [will] see a wave of consolidation in the near future,” said Sluijs.
He added: “There is an increasing interest in investing in healthcare technology.”