It’s easy to see why there’s a lot of doom and gloom about partnerships between digital health companies and pharmaceutical companies: Proteus Digital Health’s floundering business and failed investment round; Sanofi’s change of direction that led to parting ways with Onduo; and the premature conclusion of a partnership between Pear Therapeutics and Sandoz have made news in the last quarter.
However, these setbacks are not coming as a major shock to people who are working in the digital health field.
According to Bill Evans, managing director of Rock Health, these breakups are not causing a ripple effect across the market. A key reason for this is that the factors that drove the breakups don’t suggest a failure of the digital health products themselves.
“The Sanofi one is a great case in point where the corporation as a whole is moving away from the therapeutic area that is the focus of this Verily partnership, so it would be unwise for them to continue in that partnership simply because of what they need to do as a business,” Evans told Mobi Health News.
“I don’t see paradigm-level problems,” Evans added. “I see an industry that needs to take away individual, and individually valuable, lessons from each of the three so that we move forward in a productive way that unlocks the value and potential for these kinds of partnerships in the future.”
Rock Health’s Evans says one of the chief takeaways from these cases is the danger of overcommitting to a single product or program. “Go big or go home” is a high-risk maneuver in any industry, let alone an industry where the two sides of a new partnership haven’t yet come to an ideal structure for that partnership.
Further complicating digital health-pharma deals are misaligned expectations. Evans said it was probably the fact that communications were out of sync, and so were expectations, that led to the breakup between Pear and Sandoz.
But for all the news of big-name breakups, Evans of Rock Health says, there are other, quieter programs working well in the background. He says he’s heard digital health partnership success stories from about half of the 10 biggest pharmaceutical companies, and that other such partnerships are still in the works.
“In broader context, you’re starting to see digital health companies, digital therapeutics companies partner with large health care companies that have been in the health care industry for a long time—pharma is one…you have this Express Scripts announcement where this large PBM is now getting very involved in the payment and distribution of digital therapeutics,” said Propeller Health Chief Commercial Officer Chris Hogg. “You’re starting to see the slow integration of digital health into the existing digital health ecosystem. Pharma’s a big part of that, and they will continue to be.”
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