Nokia is selling its Withings digital health business back to the original founder. Withings famous for its connected health devices such as WiFi enabled body scales, fitness trackers and baby monitors has only been part of Nokia for 2 years. According to the Verge, Withings products weren’t making enough money for Nokia in its short time under their watch. Just last year, the company announced a write-down of $164 million on the assets.
It is not clear the fate of Withings going forward especially in a very competitive and low margin B2C/hardware business. One indicator to watch for this sector is share price. Fitbit, a market leader is trading at about $6 a share and Jawbone just went out of business.
In a continued trend, pharmaceutical companies are offloading their low margin consumer health divisions to focus on high risk, high reward prescription drug discovery business. German based Merck found a partner in Cincinnati headquartered P&G to sell it’s consumer health business, which features OTC products such as Neurobion, Femibion, Nasivin, Bion3, Seven Sea for muscle, joint, back pain and mobility. Products we don’t hear much about, because they are primarily sold in Europe, South America and APAC.
The acquisition will strengthen P&G’s consumer health business, where health currently makes up 1 out of every 8 products in sales, complementing brands such as Vicks, Pepto-Bismol, Crest and Oral-B.
It was less than 10 years ago since P&G divested it’s prescription drug discovery business. With this acquisition, it aims to dominate in retail consumer health by expanding scale, portfolio and category.
The World Medical Innovation Forum in Boston just wrapped after three days of insights on artificial intelligence in health care. While it didn’t disappoint in respect to buzzwords as is expected in AI conferences, it was the quality of the participants and their views on AI in health care workflows that made it notable. Here are twelve quotes directly from healthcare leaders.
On AI as a capability and adding immediate value
We realized having great medical devices is not enough, we need to connect them and make them interoperable. We operate on Adaptive Intelligence rather than Artificial Intelligence. Frans Van Houten. CEO, Philips
You will need to have capability to process structured (EHR) and unstructured (genomics) data, we can say we are more advanced in AI due to our work in oncology – aiding in virtual recruiting in clinical trials. Amy Abernethy, MD, PhD. CMO/CSO, Flatiron Health
Knowing about the range of products being developed now, in 5 to 10 years time, there will not be a single decision made in healthcare and medicine not influenced by AI. John Kelly, PhD. SVP Cognitive Solutions and Research, IBM
30-45% of each provider’s day is wasted in non-care related activities, AI can improve healthcare and reduce burnout. Peter Durlach. SVP Health Care Division, Nuance
On data generation and interoperability
We need to remove any remaining friction between insurers and providers when it comes to sharing data, we need free flow of information. Patrick Conway, MD. CEO, BCBSNC
Some doctors don’t want to be paid electronically. They are still sending paper faxes. Roy Beveridge, MD. CMO, Humana
Pharmaceutical companies are sitting on mountains of data on clinical trials. This data is still underutilized. Jackie Hunter, PhD. CEO, Benevolent AI
On data security, privacy and consent
When thinking of AI innovation, two considerations – medical requirements on devices as well as consumer privacy and security. Jigar Kadakia. CISO, Partners HealthCare
Facebook says we got consent from you. But then you don’t really know you signed consent. Consent needs to be clear – in healthcare. Noga Leviner. CEO, Picnic Health
On quality and trust of all these AI algorithms
How are we going to address quality. How is that algorithm performing and how does that impact health outcomes? Seth Hain. Director, Analytics and Machine Learning, Epic
There’s a difference between Big data and AI. Big data has informed and enabled’. What has AI done in drug development? Dr Thomas Lynch. EVP, R&D Bristol Myers Squibb
Garbage in, Garbage out. We have to de-toxify the data. Carl Kraenzel. CISO, IBM Watson Health
While about 40 health systems are now primed to sharing their medical records with patients through the iPhone Health Records app is impressive, what’s particularly interesting is Apple’s bet that consumers will be empowered to share this data with an ecosystem of digital health apps (developers) on their phones and providers and drive their own insights.
This is particularly a new approach with EHR portability which is usually system led rather than consumer led.
To make this all possible, the industry had to agree to one standard – Fast Healthcare Interoperability Resources (FHIR). This then serves as a connector to read and port data to/from from an EHR. Apple’s partners include top tier systems such as NYU langone Health, Stanford Medicine, The University of Chicago Medicine and John Hopkins hospital.
While Apple is pursing a B2C play, Google continues it’s domination in B2B via acquisitions.
Google’s Apigee (acquired in 2016) has apparently been working with several healthcare companies, including Walgreens, Kaiser Permanente to build links between data streams connecting existing data sets in disparate systems and finding new ways to ingest data from other sources. It’s strategy is to build an ecosystem of developers that are native to Apigee’s API.
There isn’t much data yet on adoption except in the single payer UK NHS where Deepmind (another acquisition) and Google’s AI arm has rolled out a number of limited hospital rollouts of it’s Streams app.
With use of the Apigee API, come storage requirements. Apigee sits under Google’s relatively new Cloud division so naturally it’s aim is to sell cloud services to these organizations to catchup up to Amazon’s Web Services and Microsoft Azure.
Lastly, the government has taken a stand to accelerate interoperability. Championed by White House advisor Jared Kushner, CMS debuted blue button 2.0 in March. The premise is patients should have access to their medical data wherever they go throughout their lifetime. As such it is requiring health plans to share data on Medicare participants. CMS requirements include requiring providers to update their systems to ensure data sharing, allowing patient’s data to follow them after they are discharged from a hospital and streamlined documentation and billing for providers.
As data becomes a commodity, non differentiated EHR incumbent providers such as Epic, Allscripts, Cerner will have to revisit their business models due to competitive new entrants and reduced revenue.
Considering the launch of a Bayer campaign back in 2016 reported by Fierce Pharma, Facebook has been building teams that sell pharma ads to the health care sector. While still in the early stages, it is no secret that Google built those teams years ago to sell account management and ad targeting for big pharma and life sciences firms.
Google got clever however. It long invested in Google (Cloud), one of the fastest growing business segment in enterprise. With Amazon (Web Services) and Apple (Electronic health records rollout on its devices), Facebook is far behind the GAFA set in the health care industry. The recent Cambridge Analytics data privacy breach is a set back for the company in rollout of any new enterprise platforms (Workplace by Facebook) and patient data analytics experimentation, especially considering HIPAA privacy regulations. Workplace by Facebook reportedly has signed up over 10,000 organizations in a very short time and is possibly the medium to enter the industry. By working with healthcare providers on collaboration and predictive analytics tools, it may be the route to compete in the already crowded telemedicine market.
Time will only tell if the company can build products that expand beyond other people’s data and the advertising model.
Walmart has been busy. Pillpack is getting acquired or so is the news today.
According to the NIH, Medication nonadherence rates range from 25% to 50%. Nearly half of all adults have at least one chronic disease and the percentage of Americans taking at least one prescription drug increased from 38% in the period 1988–1994 to 49% in the period 2007–2010; during the same time the number of adults taking three or more prescription drugs doubled.
It is reported that Walmart may pay up to $1B for the pharmacy mail order logistics startup making it easier for patients to receive the right dosage at the right time in the comfort of their home. As industry consolidation continue, other companies in the medication management space to watch out for are Alto and Capsule.
According to a WSJ article, the two companies are in talks on a merger.
What a lot of people don’t realize is that both companies already have a relationship.
According to the NY Times, since 2010, they have sold a co-branded prescription drug benefit (PDP) for Medicare recipients, which offers savings on certain drugs bought at Walmart’s pharmacies. The two companies are now discussing how to expand that partnership in ways that would help drive more traffic to Walmart’s 4,700 United States stores, while increasing Humana’s enrollment.
And this strategy makes sense. Consider that Walmart’s demographic skews towards baby boomers and seniors. According to the graphic below, almost 50% of a shopper survey done by Kantar Retail Shopper Scape fit either in the Baby Boomer segment or Senior segment. ALDI in the graph happens to be a Walmart brand as well!
That aligns strongly with Humana’s cash cow – Medicare Advantage – as the ranks of baby boomers swell.
To drive enrolment, Humana needs that traffic and continuous enrolment in Medicare Advantage.
According to Modern Healthcare, Humana divested Concentra Clinics – a nationwide urgent care clinic that it previously acquired. At the time of the divesture in 2015, the CEO was quoted “Though Concentra’s operations did not ultimately align with Humana’s strategy as well as we had originally anticipated, we believe Humana and Concentra have gained valuable insights into consumer behavior over the past several years that will serve us both well moving forward,”
Due to demographics, a Walmart partnership may be better than running scores of urgent care clinics AND driving traffic (Medicare Advantage or PDP plan) to them. Evidence may indicate that urgent care clinics skew towards an urban younger population which runs counter to Medicare/PDP Plans and Walmart’s segment population.