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The post-pandemic health industry: Tech is poised to play a much bigger role
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The post-pandemic health industry: Tech is poised to play a much bigger role

na Healthcare
post-pandemic health industry overview
post-pandemic health industry overview
  • A new wave of consolidations in the healthcare industry to come.
  • Technological solutions are already changing the ways patients are treated, and how new drugs are developed.
  • The adoption of digital technologies in the health and life sciences sector is not going to be rapid.

As the Covid-19 vaccines are starting to roll out across several countries, the global health industry is still trying to overcome the disruptions caused by the coronavirus. Though this market’s technological segment has been slowly growing in the past, the pandemic-caused limitations have pushed the innovations to the fore. Digital tools, like AI or secure video conferencing, have become critical to tackle the challenges of the ‘new normal.’

Pharmaceutical and life sciences companies have found out that several of their activities can be done remotely, thus cutting costs. 38% of industry executives expect that more than a quarter of their clinical trials will be virtual by 2025, PwC’s Health Research Institute survey shows.

During the M&A Community webinar, we discussed how the next normal could present itself with emerging opportunities, challenges, and new use cases in the US, and globally.

Tech advancements to change patient treatment

2021 is going to be a fantastic year for the health industry, believes Dr. Gary Epler, Associate Professor of Medicine at the Harvard Medical School, and Managing Director at Gracewater Capital. He explains that Covid has caused two significant changes in the health sphere.Some companies are flourishing, showing better results than ever before. Thus, these businesses will be looking for acquisition opportunities. Others, facing disruptions in supply chains or customer base, will be looking to be acquired.

  1. Healthcare development: New molecular diagnostic tools, enhancements of MRI imagery, etc. With genome-based biotech, Dr. Epler stresses that the number of treatment options is larger than ever.
  2. In terms of M&A, our panelist lists some of the most lucrative industries to look at.
  3. MedTech. ‘This is the place for big players, namely GE Healthcare, Medtronic, and several others. They are looking to increase the size of their R&D departments to develop new products and services,’ Dr. Epler explains.
  4. Digital Health. Simply put, this industry deals with the digitalization of any process in healthcare. It started with electronic medical records–and this challenge still doesn’t have an efficient solution, the professor says. There is a lot to do in terms of improving processes around patient care and organizing hospitals’ work, he believes.
  5. Artificial Intelligence (AI) / Internet of Things (IoT) for medical devices and wearables. For instance, monitoring patients’ health to detect serious illnesses (like deep vein thrombosis) that can be treated if diagnosed in a timely manner. ‘AI can monitor hundreds of health parameters, 24/7, it doesn’t need a coffee break. It is efficient, and inexpensive, and can save lives as it is able to detect symptoms before doctors and nurses notice them.’
  6. BioTech. Here, Dr. Epler says, humanity can create drugs that are on a more of a molecular level to tackle the most complex diseases, like cancer. Nevertheless, he adds, these advancements require several years and billions of dollars of investments, not to mention specialized equipment and powerful R&D teams.

Digitalization to transform operations

Covid-19 and drug price uncertainty has helped transform drug development lifecycles, says Michael Buchanio, Senior Principal, Healthcare M&A, at West Monroe Partners. ‘Due to the pandemic disruptions across the spectrum, especially around limited patient encounters, the routine and non-urgent care visits have dramatically decreased.’

According to Buchanio, the following factors are crucial to drive digital transformation and innovations in the US healthcare industry.

  • Limited clinical resources

Lack of care and management personnel in outpatient settings, and a ‘general reluctance for travel’ has caused many ongoing research projects to be delayed. Some cases were even stopped due to patient recruitment issues.

  • Increased price scrutiny

US drug prices are nearly 4 times higher than in similarly situated countries. In Japan, our panelist says, the average drug price is more than 6 times less than US prices. Both parties support drug pricing policies, ignited by cases of rapid price surges to generics and brands, like the infamous 5300% rise by Martin Shkreli’s pharmaceutical company.

  • Drug development costs rise, timelines stagnate

Buchanio says, the average cost to bring a drug to market is estimated at $2.6B high, with $1–1.3B being the mean investment. Timelines, meanwhile, remain flat, as a new drug or a vaccine takes 7-8 years to get FDA approval (Phases I to III).

Solutions to these issues can be found via the end-to-end adoption of digital technologies. They are already improving the patient experience and compliance while reducing costs and shortening time to market. For instance, Buchanio says, secure video conferencing and e-signatures tackle the issue of informed consent as well as prescreening and remote monitoring. Clinical trials are thus becoming decentralized.

‘Do I think that such technologies will be fully adopted in the near future? Probably not. But we see all the technology players making huge investments in this space. And we’re seeing a lot of pharmaceutical companies doing their trials with this decentralized approach,’ adds Buchanio.

Healthcare NA