The traditional business model of manufacturing drugs and medical devices and then selling these to healthcare providers via distributors is no longer feasible.
By Subhro Mallik
Despite being involved in cutting-edge research, life sciences and medical device companies have been slow to embrace digital transformation. Although the caution is understandable given the risks involved in their business, becoming digital-first is now critical due to several factors, despite the heavily regulated nature of these sectors.
Top challenges in pharma: The traditional business model of manufacturing drugs and medical devices and then selling these to healthcare providers via distributors is no longer feasible.
Rising healthcare costs: Governments around the world are grappling with growing healthcare costs and desperately seeking to slash expenditure. Such trends are driving down the prices of medical devices as governments demand to see the value of these products reflected in improved patient outcomes. However, direct correlation of outcomes to devices is sometimes difficult to establish.
Burden of chronic diseases: A large part of chronic disease management is performed outside the clinic and consists of lifestyle choices made by patients.
Poor treatment adherence: Given that the potential to improve profitability is directly linked to positive patient outcomes, pharmaceutical companies struggle with managing patient behaviour. Pharmaceutical companies must find ways to integrate services with their products to create greater value. Some ways of doing this are by strengthening existing B2B relationships and cultivating direct connections with patients.
The Potential of the Internet of Things (IoT)
New technologies such as IoT hold great potential to improve patient engagement, increase adherence to treatment plans, and promote positive lifestyle changes. Connected devices include external medical devices (such as insulin pumps) as well as implantable medical devices (such as pacemakers). Consumer wearables such as smartwatches and smartphones also fall under this category. Each of these devices generate data, which can be aggregated and analysed using AI and machine learning to detect key trends and predict future events. The outcomes are early detection of adverse events, lower emergency admissions, and reduced length of hospital stays.
IoT can thus help the life sciences industry create new value streams in the following ways:
Support remote monitoring for timely healthcare: Patient-generated data can be transmitted to doctors for remote monitoring, enabling them to make more effective treatment plans.
Help patients take ownership of their health: Patients feel reassured when a doctor observes their health status regardless of their location. Digital technologies empower patients by giving them greater control over their health.
Enable life sciences companies to adopt new business models: Analysts predict that by 2030, leading medical device companies may become distinguished as players that actively create value by forging closer connections with patients. While incorporating these digital technologies will require pharmaceutical and medical device companies to go beyond their traditional manufacturing roles, the new business model will enable corporations to forge closer connections with their end-users and better understand the patient experience.
Positive Outcomes with IoT
The economic impact of IoT in the health sector is expected to reach $1.6 trillion by 2025. Pharmaceutical and medical devices companies must integrate digital solutions and products leveraging IoT to create patient-centric, value-based, and outcome-driven business models. Shifting from blunt instruments to holistic and connected therapy will position it as an enabler of healthy living that caters to unique patient needs.
The writer is SVP and Global Head Life Sciences, Infosys
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