The global pharmaceutical market was worth $946.1bn in 2016, growing with a compound annual growth rate (CAGR) of 6.1% between 2012 and 2016. Healthy market growth and big margins in the traditional pharma industry are attracting a new generation of startup companies, who are using big data, sensors and artificial intelligence to revolutionize the way healthcare is delivered and they are not afraid to compete with the incumbent Big Pharma companies.
Emerging digital technologies from the new generation start-ups are reshaping the traditional pharma landscape. By collecting enough data, directly from patients, and applying the right technology, they are looking to create a tool that will be able to figure out the right touch for getting people to manage and care for their chronic conditions, reducing the need for doctors and medication.
The pharmaceutical industry has been rather slow to adopt some of these digital technologies, compared to other industries. The reluctance may be due to a fear that some of these digital start-ups will get to ‘own’ the relationship with the physician and the patient and distance the pharmaceutical companies from that.
It is still early days for big pharma’s digital push and the future of the changing competitive landscape is uncertain. The imperative to develop a capability in this field is becoming stronger as health systems demand hard evidence that a drug is effective and will ease strain on the budget. Despite the fact that the technology behind new medical devices did not exist until recently, the new approach to monitoring and managing the patients digitally attracts attention from the corporate world and investors.
While some pharmaceutical industry players remain uncertain as to how to respond to the digital health revolution, the danger that new start-ups may steal the market by collecting valuable data on their patients spurs others to take action. Whether an app produced by a pharmaceutical company and related to a single branded medicine would generate the same degree of loyalty from patients and their doctors as those produced by an independent start-up, remains to be seen.