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"The Internet of Things (IoT) describes
the revolution already under way
that is seeing a growing number of
internet-enabled devices that can
network and communicate with
each other and with other web-enabled
gadgets.”1
Competition in the healthcare industry
has become more intense due to price
pressures in regulated markets and the
emergence of more competitors that are
capable of leaving a footprint on a global
scale. These developments have created
pressure on companies to innovate and
differentiate in order to survive in a
market that is still bearing scars from
payers’ cost-reducing mentality shaped
by the hardships of the most recent
recession.
Innovation in the pharmaceutical
industry has been suffering due to the
increasing consolidation of “Big Pharma”
multinational companies (MNCs) through
mergers and acquisitions, and due to
increasing competition from generic and
biosimilar players. There is more
emphasis on differentiation than on
innovation – or, at least, there was until
the emergence of the exciting prospect
of leveraging telecommunications and
internet technology in combination with
pharmaceutical treatments.
More and more, companies are changing
gears; they are listening to the latest
developments in IoT within healthcare,
especially with patients becoming
increasingly adept at using IoT
technologies and more willing to
incorporate them into their daily lives.
Why are patients adopting these
technologies for healthcare? Because
they are already doing so in other areas
of their lives. Patients use smartphones
or tablets to communicate with family
and friends, or with their appliances and
machines – TVs, boilers, heating units –
through apps or Bluetooth.
IoT is here and, given our growing
dependence on technology, its
convenience and the potential cost-
saving perks to the patient, the payer
and the healthcare professional, it is set
to shake up the healthcare industry and
its market space.2,3
It will also provide
crucial competitive advantages to
pharmaceutical companies with regards
to treatment differentiation, adherence
and, most importantly, data.4,5
With IoT,
there is a potential to gather huge
amounts of data.
The healthcare industry is slowly
adopting IoT, and well-known companies
in both the technology and
pharmaceutical industries have started
to move into this space. Why was the
pace of adoption not as rapid as was
predicted in 2013, 2014 or even 2015?
Data collection is essential to develop a
base of understanding for a particular
health related event, and it is already
utilised throughout other industries. So
why is the healthcare industry behind
the data-adoption curve? This is
something to be expanded on further in
following editions of Prescient’s
whitepaper on IoT in Healthcare.
Authors:
Ricardo Mousinho, BSc rmousinho@prescienthg.com
Philip Winkworth, MSci, PhD pwinkworth@prescienthg.com
Roland Galgoczy, BSc, PhD rgalgoczy@prescienthg.com
Benjamin Hope, BA bhope@prescienthg.com
1. What is IoT and why is it shaking up the healthcare industry?
“Shaping decisions for better future
medicines”
2
What we are seeing in healthcare at the
moment is partnerships between tech
giants such as Google, Apple, IBM and
Samsung with pharma giants such as
Novartis, J&J, Teva, Sanofi and Novo
Nordisk. Why? As healthcare requires
more real-world data, technology and
medtech companies (Prescient defines a
“medtech” as a company that uses
information technology to provide
services and solutions within the
healthcare industry (not including
companies that make large diagnostics
equipment, e.g., MRI, PET/CT)) allow
real-time gathering of information. What
is interesting is that the role of medical
device companies in affecting IoT
usability is expected to increase, as the
early movers among them will be
expected to create internal units and
divisions focused on integrating IoT with
the devices and services they offer to
the healthcare industry.
Currently, the majority of pharma-tech
joint ventures are focused on chronic
diseases such as diabetes, multiple
sclerosis and heart disease.6,7,8
These
are the diseases for which proactive
monitoring and data management are
used and they are well suited to the
advantage web-based monitoring
systems bring. This makes sense
because, in highly competitive markets,
patients will benefit greatly from more
convenient, real-time monitoring of their
conditions.9
Patients’ compliance with treatment can
be very poor, especially in asymptomatic
chronic diseases such as early-stage
diabetes and hypertension. Lack of
compliance may cost the healthcare
industry billions USD every year.10
Imagine a healthcare professional who
knows why a certain treatment has not
been effective and can act accordingly
by changing the course of treatment or
discussing lack of compliance with the
patient. Or, imagine a patient who
genuinely forgets to take his scheduled
dose but can be reminded by a
smartphone, smartwatch or wristband,
which then feeds compliance information
straight to the physician’s tablet. Or
smartpills that let a physician know
when a patient actually takes her
medication. These are just a few of the
many possibilities.
There are many reasons why IoT hasn’t
revolutionised healthcare just yet. These
reasons revolve around security,
regulatory uncertainty and privacy. As
tech companies sell personal data to
third parties, patients need to know that
their data will be kept confidential, or at
least will be sold in a non-identifiable
manner.
Another key issue is the word “smart”.
Currently, “smart” is taken to
mean “expensive”, even
though it could deliver cost-
savings through improved
compliance and reductions in
hospitalisation time. To health
authorities, it is very expensive for each
patient to obtain access to these smart
devices, and health authorities will not
be able to afford to introduce these
technologies unless they are proven to
be cost-effective and highly beneficial to
patients. Patients have to pay out of
pocket for these devices at the moment,
unless the treatment costs are covered
by private insurers or the technology is
cost-effective to payers.
The failure of IoT in healthcare to live up
to the hype is attributed not only to the
price or security issues but also to the
fact that most companies are not looking
2. How is IoT shaping the
healthcare landscape?
3. Is 2016 the year of IoT?
Why might it be different?
3
at the fundamental value offering for the
patient, which is that having a user-
friendly “remote” that is on or with the
patient at most times (i.e., a
smartphone or smartwatch) allows for
communication with healthcare
professionals in the simplest and most
efficacious way possible. It’s also likely
that very few patients would be willing
to wear multiple sensors on different
parts of their bodies, or to sacrifice
many nights out because they have to
be at home to log their daily readings
into a modem-like device which stores
and sends findings to physicians about
daily insulin fluctuations, for example.
Why might 2016 be different? Well,
the space has been
undergoing a “priming”
process for the past few
years, which is now nearing
its maturing stages, signalled by
the high number of partnerships struck
up in 2015. These partnerships are
setting the stage for IoT in healthcare to
blossom. Importantly, new forms of data
transfer are being developed – in
particular, a new form of Wi-Fi, Wi-Fi
HaLow, from the Wi-Fi Alliance.11
Wi-Fi
HaLow is expected to support Smart
Home and Smart City initiatives, as it
operates on very low power and can
support IoT communication between
devices at greater distances.
While the technology is still about two
years away and will need to be
customised to achieve higher speeds,
this development could essentially
eliminate the dreaded ‘dead spots’ of
little or no Wi-Fi connectivity around the
home.
Although great in theory, there is a
downside: the connection will not be
sufficient for internet surfing, only for
the transfer of small packs of data, and
it would have to be customised to
achieve higher data transfer speeds.
4.1 GSK and Qualcomm12
GSK and Qualcomm are in talks to
create a joint venture that will enable
the pharma giant GSK to expand into
the medtech sector. GSK already has a
bioelectronics R&D unit in place to
explore a new class of medicines,
miniaturised implantable devices. The
unit, which was established in 2013,
may benefit from Qualcomm’s
technology if this deal materialises.
GSK has previously funded many
bioelectronics projects, and it has a
partnership with medtech Propeller
Health to develop a smart inhaler for the
drug Seretide. Qualcomm has a
partnership with Novartis to develop
smart inhalers for asthma and COPD,
but the deal with GSK is unlikely to
affect it.
4.2 Otsuka Pharma and Proteus
Digital Health: Schizophrenia and
bipolar disorder13
Otsuka combined its blockbuster drug
ABILIFY (aripiprazole; for serious mental
illnesses such as schizophrenia and
bipolar disorder) with Proteus’ ingestible
sensor technology, which records
ingestion and shares information with
healthcare professionals, provided the
patient consents to this aspect ofthe
treatment.
Proteus announced in July 2015 that the
FDA had expanded the Indications for
Use statement for the most recent
generation of its ingestible sensor
technology on the back of adherence
INTERNET OF THINGS
4. Eye-catching deals
4
claims. According to a press release
from the company, an estimated 50% of
patients with chronic diseases in
developed countries do not take
medicines as prescribed. Otsuka filed for
approval of a drug-device combination
for ABILIFY across multiple divisions of
the FDA in September 2015.14
This deal comes at a time when the
blockbuster drug, which is achieving
about $8 billion in worldwide sales
(March 2014), has lost its patent in both
the EU (2014) and the US (April 2015).
The FDA approved Alkermes’ long-acting
ARISTADA (an ABILIFY generic) as an
injection, as well as generics from Teva,
Alembic, Hetero and Torrent Pharma.15
This new partnership may be seen as a
defensive strategy from Otsuka, one that
offers greater convenience to patients on
ABILIFY and potentially brings
compliance to the level seen with
ARISTADA, which is administered by a
healthcare professional.
It remains to be seen how high the FDA
will set its bar of approval for these
types of devices. For all companies
looking to bring “invasive” sensor
technology to regulated markets, this
filing will be an important case study.
4.3 Sanofi and Verily: Diabetes16
The partnership between Sanofi and
Verily (formerly Google Life Sciences),
announced in August 2015, brings
together two giants from the pharma
and tech industries, respectively, to
develop technologies to improve the
management of diabetes. The venture
combines Sanofi’s expertise in diabetes
and Google’s expertise in data analysis
and miniaturised low-energy electronic
chips. The goal is to provide continuous
real-time monitoring of a patient’s health
status.
In the diabetes space, Sanofi is not the
only pharma company forming
partnerships with tech giants: Novo
Nordisk has partnered with IBM to seek
new diabetes treatments supported by
IBM’s Watson cloud technology.17
4.4 And what about government
agencies and institutes?
An increasing number of health
authorities and institutes are adopting
IoT to facilitate the management and
transfer of patient data. They say time is
money, so if you save time through
streamlined data processes…
The risk, however, is that patients may
feel they have not been taken care of
properly, especially if their condition
progresses.
In the Netherlands, the University
Medical Centre Groningen (UMCG) has
partnered with Huawei to help manage
the spread of infectious diseases in
hospitals by using IoT to track hospital
facilities and patient traffic. This system
can help to improve early detection of
hospital-acquired infectious diseases,
which will cut down on future medical
costs and save lives.
The Chinese government now has 15
memoranda of understanding (MOUs)
with South Korean companies to
introduce telemedicine into Chinese
healthcare. These deals will allow South
Korea to export drugs and biotech
products to China, as well as expand the
development of medical tourism
packages between the two countries.25
The Welsh NHS is encouraging patients
to consult with their GPs via
smartphones. Conditions will be
monitored via mobile apps and patients
will be able to access their health
records and book appointments online.
The Welsh Assembly is committed to
putting digital technology at the heart of
healthcare. NHS staff will also be able to
use mobile devices when working with
medical data.18
5
5.1 Catalysts, milestones and
hurdles on the way to revolution
Despite the obvious attractiveness of
this developing area, there are many
potential hurdles that will need to be
overcome. The three catalysts that
Prescient will briefly discuss below
centre on an event that provides insight
into changing government mindsets, a
landmark approval and a possibly
groundbreaking new partnership.
In 2016, the FDA seems to have become
more circumspect compared to its
previous position of allowing digital
technology into the human arena, after
its announcement that more real-world
evidence will be required for approvals.19
A government standpoint that demands
more practical evidence that technology
will truly benefit patients is no bad
thing; for the industry, however, the
FDA’s new perspective could create
several stumbling blocks. In particular,
the added cost burden may mean that
the paradigm shift we foresee will not
surface this year.
In Europe, similar regulatory
developments are afoot. At the start of
February, the European Commission
(EC) announced that it is developing
guidelines for mobile health apps.20
Seemingly not as strict in its stance as
the FDA, the EC is looking to apps to
provide higher-quality health data, using
current best practice to ensure that the
information collected is also protected.
Of particular note, the EC announcement
highlighted the paramount importance of
ensuring that high quality data must be
used if they are incorporated into clinical
decision making. In our opinion, the EC
making such a statement strengthens
the position of IoT by showing that a
major global healthcare regulatory body
wants to utilise its capabilities.
There are also further catalysts this year
that are likely to accelerate the
development of the industry. One
potential impetus that could represent a
turning point for IoT in healthcare will be
the FDA’s decision regarding Otsuka’s
and Proteus’ combination of an
adherence monitor with ABILIFY
medication. The companies submitted
the application on 10 September 2015
following the landmark approval of
Proteus’ ingestible monitoring device on
2 July 2015.1314
Approval of this
combination of monitoring and medicine,
which appears highly likely to occur, will
pave the way for more in vivo
monitoring devices that are likely to
increase patient adherence, or at least
enable physicians to identify non-
compliant patients. The technology may
also allow doctors to subtly vary the
dose of medication to optimise the
treatment for their patients, leading to
potential cost savings.
The final catalyst comes from the UK
and could change the face of healthcare
in Europe. The NHS in England will be
partnering with tech companies,
including giants such as Verily, IBM and
Philips, to carry out seven trials aimed at
improving healthcare by using IoT.21
Whilst it is arguable that this is more of
a regional, rather than global, catalyst, it
could also be argued that a national
health provider from the EU5 wanting to
embrace IoT in such a broad way could
be ground-breaking. Positive results
from such a wide-reaching partnership
could potentially pave the way for other
EU countries to incorporate IoT into their
own healthcare systems.
5. Discussion
6
What is intriguing about the NHS
partnership are the areas being studied:
diabetes monitoring, identification of at-
risk older patients, and severe mental
illness feature heavily. These trial IOT
implementations in patient care,
including attempts at identifying how
best to keep elderly patients safely out
of hospitals, provide a test case for the
developed world, where the average age
of the population is increasing.22
Proof
that IoT can reduce costs whilst helping
to improve patients’ quality of life could
be game-changing for all potential
providers and innovators. Such an
achievement could allow innovators
greater access to global markets and
larger commercial and medical
opportunities, especially when coupled
with the other potential catalysts we
have discussed. Furthermore, we have
noticed that the full integration of IoT
into hospitals is underway elsewhere
globally, including Humber River Hospital
in Canada as well as others in North
America and Asia.23, 24, 25
5.2 IoT deal trends and applications
in healthcare
Therapeutic areas
Figure 1. Percentage split of key IoT deals in
healthcare, by therapeutic area
Partnerships in the field of healthcare
IoT still largely revolve around either
developing existing IoT infrastructure or
implementing new technologies. IoT has
not yet reached the level of maturity
where it can be applied to specific
therapeutic areas using an established
infrastructure.
IoT in healthcare started with
monitoring. Its immediate commercial
applications were in lifestyle and
wellness, with wearable heart rate
monitors as a prime example. Currently,
most IoT applications involve wearable
technologies and are still mainly
concerned with monitoring. This trend is
not surprising, as chronic diseases are
the most cumbersome for healthcare
systems and monitoring offers several
advantages, including patient safety and
compliance, which in turn provide more
efficient treatment. As a result,
monitoring of patients with chronic
diseases such as diabetes is slowly
becoming a standard area of application
for IoT in healthcare.
Recently, big tech companies have
developed clearer ideas of what their
plans are for the healthcare sector and
of the immense potential for IoT in the
field, through an understanding of key
stakeholder needs and requirements.
Consequently, the utility of IoT has
constantly been diversifying and includes
applications in acute healthcare
problems, infectious diseases, lab
testing, neurology, ophthalmology,
respiratory disease, surgery and many
others. Diversity in healthcare IoT
applications will ensure that smaller tech
companies will be able to compete with
larger players while driving innovation.
28%
3%
11%
26%
3%
3%
11%
6%
3% 3% 3%
Not therapeutic-area specific Acute health problems
Diabetes Health and Wellness
Infectious diseases Lab testing
Multiple chronic diseases Neurology
Ophthalmology Respiratory
Surgery
7
Geography
Figure 2. Percentage split of key IoT deals in
healthcare, by geography
IoT in healthcare is a global movement,
and large tech and pharma companies
are starting to expand into it. There is
some local partnering activity as well,
mostly in local-scale hospital pilot
studies; examples include Princess
Margaret Hospital in Canada becoming
the first fully IoT-integrated hospital in
North America and the NHS partnering
with Verily, Philips and IBM to address
issues associated with running clinical
trials. In the future, local partnering will
probably gain some ground, considering
that smaller tech companies will advance
and diversify their IoT offerings while
pharma companies will focus on
establishing their local presence in
hospitals and clinical trial sites.
Deal type
Figure 3. Percentage split of company types
targeting IoT in healthcare (not including public
institutions)
Many important deals in the field of IoT
still revolve around tech companies
partnering with each other to develop
new products. These deals will drive the
future of healthcare IoT once the
participants find more applications for
their technologies. To some degree, this
trend is highlighting the slow, but
nevertheless growing, uptake of
information technology capabilities by
the healthcare industry. However, other
types of deals are increasing in number,
where large pharmaceutical companies
are partnering with tech giants to
innovate and differentiate their product
offerings and services. This trend could
see an increase over the next few years,
as the advantages of IoT in healthcare
have already been established and as
security improves. Moreover, healthcare
authorities are increasingly aware of the
numerous benefits of IoT, both to
patients’ quality of life and to the
sustainability of healthcare systems.
Finally, as IoT benefits from
technological advancements and as
healthcare professionals become more
aware of the importance of improved
data management, the relationship
between IoT and healthcare will improve
significantly.
Implications:
How do we expect the market to react to
all this activity in 2016? We are
expecting more Big Pharma players to
look for medtech partners, and vice
versa. We also expect H1 2016 to be
particularly active. Some of the deals
struck in H2 2015 are expected to
mature as the joint ventures carry out
stakeholder research to understand the
dynamics of a market for which the
wheels have already been set in motion.
It will be interesting to keep an eye on
the Otsuka-Proteus deal and the ABILIFY
smartpill in the US. In our view, this
would be the first major IoT-in-
healthcare product to be approved by
the FDA. We are monitoring this very
important collaboration as a potential
standard-bearer or trend-setter in this
space once the expected FDA approval is
granted.
64%
18%
6%
6% 3% 3%
Global US
China UK
South Korea Israel
53%
47% Healthcare/Tech
Tech/Tech
6. Implications
8
We will see a rise in major hospitals
adopting IoT services to manage staff
more efficiently, reducing overtime and
achieving cost savings of hundreds of
thousands of dollars. IoT cloud services
will allow hospitals to monitor patient
admissions in real time.
Given the potential of using Big Data
management and analytics to obtain
information in real time, CROs and
pharma companies will be increasingly
interested in adopting cloud services to
help in the management and analysis of
clinical trials.
Based on current trends, we at Prescient
expect major partnerships between
healthcare authorities and tech
companies, not only at a local level, but
also at regional levels (i.e., Nordic
healthcare systems to be connected to
one another, or systems in China, South
Korea and Japan to be connected to one
another through IoT). In Asia,
healthcare tourism is increasing, and
such partnerships are expected to
materialise towards the end of the year
and throughout 2017. This type of
partnership may mature sufficiently to
reach its potential in the next five years.
For 2016, we also expect a rise in the
number of deals between healthcare
authorities and technology companies at
a local level in order to improve macro-
level management of hospitals through
the efficient use of captured data.
IoT in healthcare is an exciting area
expected to have a huge impact on both
the pharmaceutical and technology
industries, making these even more
attractive spaces for investment. This
will be a seminal year for healthcare IoT;
as such, Prescient will be closely tracking
any success stories. Throughout 2016,
we will be providing valuable insights to
help shape decisions in healthcare-
related ventures.
Table 1. Key partnerships/developments in January 2016
Entities
Therapeutic
area
Geography Entity type
Novartis/Qualcomm Respiratory Global Pharmaceutical and medtecha
J&J/Plug and Play Multiple Global Pharmaceutical and medtech
BlackBerry/Sharecare Multiple US Technologyb
and technology
Theranos Multiple US Medtech
IBM/Medtronic Diabetes Global Technology and medtech
Proteus Digital Health/
Barton Health
Cardiovascular US Medtech and health institute
Medtronic/Medibio Multiple Global Medtech and medtech
Babylon Multiple UK Medtech
RxNT Multiple US Technology
Verily/American Heart
Association/AstraZeneca
Cardiovascular US
Medtech, association and
pharmaceutical
Celltrion/Medidata Multiple Global Pharmaceutical and medtech
ENISA Unknown EU Technology
GSK/Qualcomm Multiple Global Pharmaceutical and medtech
NHS England/
Verily/IBM/Philips/etc.
Multiple UK
Health authority, medtech and
technology
NHS England/Aseptika Unknown UK
Health authority and
technology
a
Prescient defines a “medtech” as a company that uses information technology to provide services and
solutions within the healthcare industry (not including companies that make large diagnostics equipment, e.g.,
MRI, PET/CT).
b
Prescient defines a “technology” company as a company that combines information technology and electronics
to provide equipment and services.
9
About:
Prescient is an evidence-based decision support partner to the pharmaceutical and
biotech industries whose mission is to optimally shape new product, brand and mature
brand planning strategies.
Contact:
For more information about Prescient Healthcare Group or this whitepaper, please
contact:
Ricardo Mousinho rmousinho@prescienthg.com
Dr. Philip Winkworth pwinkworth@prescienthg.com
Dr. Roland Galgoczy rgalgoczy@prescienthg.com
Ben Hope bhope@prescienthg.com
Website: www.prescienthg.com
Conflicts of interest: The authors declare that the views and opinions expressed in this
article are the authors’ own and that they have not received any monetary compensation
for writing this article. The authors certify that they have NO affiliations with or
involvement in any organization or entity with any financial interest (such as honoraria;
educational grants; participation in speakers’ bureaus; membership, employment,
consultancies, stock ownership, or other equity interest; and expert testimony or patent-
licensing arrangements), or non-financial interest (such as personal or professional
relationships, affiliations, knowledge or beliefs) in the subject matter or materials
discussed in this manuscript.
Acknowledgements/Special thanks to:
Raymond Donninger
John Earl
Alex Tait
Joanne Taylor
10
1
http://whatis.techtarget.com/definition/Internet-of-Things
2
http://healthitanalytics.com/news/can-the-healthcare-internet-of-things-cut-costs-by-25-percent
3
http://www.bsminfo.com/doc/the-internet-things-its-quest-cut-healthcare-costs-0001
4
http://www.imedicalapps.com/2016/01/hospital-set-to-prescribe-blood-pressure-medications-with-ingestible-
sensors-to-track-adherence/
5
http://www.timesofmalta.com/articles/view/20151018/business-news/Digital-data-in-healthcare-is-
increasing-by-48-annually.588676
6
http://www.fiercemedicaldevices.com/story/ibm-novo-nordisk-team-seek-new-solutions-treat-diabetes-
through-cloud/2015-12-11?utm_medium=nl&utm_source=internal
7
http://www.latribune.fr/technos-medias/lutte-contre-le-diabete-sanofi-s-associe-a-google-501678.html
8
http://www.fiercemedicaldevices.com/story/googles-verily-aha-astrazeneca-team-heart-disease-rd-
75m/2016-01-19
9
http://mobihealthnews.com/40031/google-biogen-will-use-wearable-sensors-to-study-multiple-sclerosis
10
http://www.techrepublic.com/article/IoT-packaging-can-help-healthcare-industry-save-10-billion-annually/
11
http://fortune.com/2016/01/04/wifi-halow/
12
http://www.fiercemedicaldevices.com/story/gsk-qualcomm-rumored-form-med-tech-joint-venture/2016-01-
20?utm_medium=rss&utm_source=rss&utm_campaign=rss
13
http://www.proteus.com/press-releases/first-medical-device-cleared-by-fda-with-adherence-claim/
14
http://www.proteus.com/press-releases/u-s-fda-accepts-first-digital-medicine-new-drug-application-for-
otsuka-and-proteus-digital-health/
15
http://www.wsj.com/articles/fda-approves-alkermes-schizophrenia-treatment-aristada-1444091809
16
http://www.latribune.fr/technos-medias/lutte-contre-le-diabete-sanofi-s-associe-a-google-501678.html
17
https://www-03.ibm.com/press/us/en/pressrelease/48316.wss
18
http://www.southwales-eveningpost.co.uk/Patients-Wales-use-smartphones-health-care/story-28346289-
detail/story.html
19
http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDRH/CDRHVis
ionandMission/UCM481588.pdf
20
https://ec.europa.eu/digital-agenda/en/news/new-eu-working-group-aims-draft-guidelines-improve-
mhealth-apps-data-quality
21
https://www.england.nhs.uk/2016/01/embracing-innovation/
22
http://www.who.int/ageing/publications/global_health.pdf
23
http://www.techtimes.com/articles/97255/20151020/first-fully-digital-hospital-in-north-america-opens-in-
canada.htm
24
http://www.healthcaredive.com/news/how-one-la-hospital-spent-70m-on-a-cutting-edge-it-
infrastructure/412861/
25
http://www.businesskorea.co.kr/article/11943/medical-mou-korean-medical-companies-sign-15-mous-
chinese-counterparts

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Perspectives on IoT in healthcare in 2016

  • 1. 1 "The Internet of Things (IoT) describes the revolution already under way that is seeing a growing number of internet-enabled devices that can network and communicate with each other and with other web-enabled gadgets.”1 Competition in the healthcare industry has become more intense due to price pressures in regulated markets and the emergence of more competitors that are capable of leaving a footprint on a global scale. These developments have created pressure on companies to innovate and differentiate in order to survive in a market that is still bearing scars from payers’ cost-reducing mentality shaped by the hardships of the most recent recession. Innovation in the pharmaceutical industry has been suffering due to the increasing consolidation of “Big Pharma” multinational companies (MNCs) through mergers and acquisitions, and due to increasing competition from generic and biosimilar players. There is more emphasis on differentiation than on innovation – or, at least, there was until the emergence of the exciting prospect of leveraging telecommunications and internet technology in combination with pharmaceutical treatments. More and more, companies are changing gears; they are listening to the latest developments in IoT within healthcare, especially with patients becoming increasingly adept at using IoT technologies and more willing to incorporate them into their daily lives. Why are patients adopting these technologies for healthcare? Because they are already doing so in other areas of their lives. Patients use smartphones or tablets to communicate with family and friends, or with their appliances and machines – TVs, boilers, heating units – through apps or Bluetooth. IoT is here and, given our growing dependence on technology, its convenience and the potential cost- saving perks to the patient, the payer and the healthcare professional, it is set to shake up the healthcare industry and its market space.2,3 It will also provide crucial competitive advantages to pharmaceutical companies with regards to treatment differentiation, adherence and, most importantly, data.4,5 With IoT, there is a potential to gather huge amounts of data. The healthcare industry is slowly adopting IoT, and well-known companies in both the technology and pharmaceutical industries have started to move into this space. Why was the pace of adoption not as rapid as was predicted in 2013, 2014 or even 2015? Data collection is essential to develop a base of understanding for a particular health related event, and it is already utilised throughout other industries. So why is the healthcare industry behind the data-adoption curve? This is something to be expanded on further in following editions of Prescient’s whitepaper on IoT in Healthcare. Authors: Ricardo Mousinho, BSc rmousinho@prescienthg.com Philip Winkworth, MSci, PhD pwinkworth@prescienthg.com Roland Galgoczy, BSc, PhD rgalgoczy@prescienthg.com Benjamin Hope, BA bhope@prescienthg.com 1. What is IoT and why is it shaking up the healthcare industry? “Shaping decisions for better future medicines”
  • 2. 2 What we are seeing in healthcare at the moment is partnerships between tech giants such as Google, Apple, IBM and Samsung with pharma giants such as Novartis, J&J, Teva, Sanofi and Novo Nordisk. Why? As healthcare requires more real-world data, technology and medtech companies (Prescient defines a “medtech” as a company that uses information technology to provide services and solutions within the healthcare industry (not including companies that make large diagnostics equipment, e.g., MRI, PET/CT)) allow real-time gathering of information. What is interesting is that the role of medical device companies in affecting IoT usability is expected to increase, as the early movers among them will be expected to create internal units and divisions focused on integrating IoT with the devices and services they offer to the healthcare industry. Currently, the majority of pharma-tech joint ventures are focused on chronic diseases such as diabetes, multiple sclerosis and heart disease.6,7,8 These are the diseases for which proactive monitoring and data management are used and they are well suited to the advantage web-based monitoring systems bring. This makes sense because, in highly competitive markets, patients will benefit greatly from more convenient, real-time monitoring of their conditions.9 Patients’ compliance with treatment can be very poor, especially in asymptomatic chronic diseases such as early-stage diabetes and hypertension. Lack of compliance may cost the healthcare industry billions USD every year.10 Imagine a healthcare professional who knows why a certain treatment has not been effective and can act accordingly by changing the course of treatment or discussing lack of compliance with the patient. Or, imagine a patient who genuinely forgets to take his scheduled dose but can be reminded by a smartphone, smartwatch or wristband, which then feeds compliance information straight to the physician’s tablet. Or smartpills that let a physician know when a patient actually takes her medication. These are just a few of the many possibilities. There are many reasons why IoT hasn’t revolutionised healthcare just yet. These reasons revolve around security, regulatory uncertainty and privacy. As tech companies sell personal data to third parties, patients need to know that their data will be kept confidential, or at least will be sold in a non-identifiable manner. Another key issue is the word “smart”. Currently, “smart” is taken to mean “expensive”, even though it could deliver cost- savings through improved compliance and reductions in hospitalisation time. To health authorities, it is very expensive for each patient to obtain access to these smart devices, and health authorities will not be able to afford to introduce these technologies unless they are proven to be cost-effective and highly beneficial to patients. Patients have to pay out of pocket for these devices at the moment, unless the treatment costs are covered by private insurers or the technology is cost-effective to payers. The failure of IoT in healthcare to live up to the hype is attributed not only to the price or security issues but also to the fact that most companies are not looking 2. How is IoT shaping the healthcare landscape? 3. Is 2016 the year of IoT? Why might it be different?
  • 3. 3 at the fundamental value offering for the patient, which is that having a user- friendly “remote” that is on or with the patient at most times (i.e., a smartphone or smartwatch) allows for communication with healthcare professionals in the simplest and most efficacious way possible. It’s also likely that very few patients would be willing to wear multiple sensors on different parts of their bodies, or to sacrifice many nights out because they have to be at home to log their daily readings into a modem-like device which stores and sends findings to physicians about daily insulin fluctuations, for example. Why might 2016 be different? Well, the space has been undergoing a “priming” process for the past few years, which is now nearing its maturing stages, signalled by the high number of partnerships struck up in 2015. These partnerships are setting the stage for IoT in healthcare to blossom. Importantly, new forms of data transfer are being developed – in particular, a new form of Wi-Fi, Wi-Fi HaLow, from the Wi-Fi Alliance.11 Wi-Fi HaLow is expected to support Smart Home and Smart City initiatives, as it operates on very low power and can support IoT communication between devices at greater distances. While the technology is still about two years away and will need to be customised to achieve higher speeds, this development could essentially eliminate the dreaded ‘dead spots’ of little or no Wi-Fi connectivity around the home. Although great in theory, there is a downside: the connection will not be sufficient for internet surfing, only for the transfer of small packs of data, and it would have to be customised to achieve higher data transfer speeds. 4.1 GSK and Qualcomm12 GSK and Qualcomm are in talks to create a joint venture that will enable the pharma giant GSK to expand into the medtech sector. GSK already has a bioelectronics R&D unit in place to explore a new class of medicines, miniaturised implantable devices. The unit, which was established in 2013, may benefit from Qualcomm’s technology if this deal materialises. GSK has previously funded many bioelectronics projects, and it has a partnership with medtech Propeller Health to develop a smart inhaler for the drug Seretide. Qualcomm has a partnership with Novartis to develop smart inhalers for asthma and COPD, but the deal with GSK is unlikely to affect it. 4.2 Otsuka Pharma and Proteus Digital Health: Schizophrenia and bipolar disorder13 Otsuka combined its blockbuster drug ABILIFY (aripiprazole; for serious mental illnesses such as schizophrenia and bipolar disorder) with Proteus’ ingestible sensor technology, which records ingestion and shares information with healthcare professionals, provided the patient consents to this aspect ofthe treatment. Proteus announced in July 2015 that the FDA had expanded the Indications for Use statement for the most recent generation of its ingestible sensor technology on the back of adherence INTERNET OF THINGS 4. Eye-catching deals
  • 4. 4 claims. According to a press release from the company, an estimated 50% of patients with chronic diseases in developed countries do not take medicines as prescribed. Otsuka filed for approval of a drug-device combination for ABILIFY across multiple divisions of the FDA in September 2015.14 This deal comes at a time when the blockbuster drug, which is achieving about $8 billion in worldwide sales (March 2014), has lost its patent in both the EU (2014) and the US (April 2015). The FDA approved Alkermes’ long-acting ARISTADA (an ABILIFY generic) as an injection, as well as generics from Teva, Alembic, Hetero and Torrent Pharma.15 This new partnership may be seen as a defensive strategy from Otsuka, one that offers greater convenience to patients on ABILIFY and potentially brings compliance to the level seen with ARISTADA, which is administered by a healthcare professional. It remains to be seen how high the FDA will set its bar of approval for these types of devices. For all companies looking to bring “invasive” sensor technology to regulated markets, this filing will be an important case study. 4.3 Sanofi and Verily: Diabetes16 The partnership between Sanofi and Verily (formerly Google Life Sciences), announced in August 2015, brings together two giants from the pharma and tech industries, respectively, to develop technologies to improve the management of diabetes. The venture combines Sanofi’s expertise in diabetes and Google’s expertise in data analysis and miniaturised low-energy electronic chips. The goal is to provide continuous real-time monitoring of a patient’s health status. In the diabetes space, Sanofi is not the only pharma company forming partnerships with tech giants: Novo Nordisk has partnered with IBM to seek new diabetes treatments supported by IBM’s Watson cloud technology.17 4.4 And what about government agencies and institutes? An increasing number of health authorities and institutes are adopting IoT to facilitate the management and transfer of patient data. They say time is money, so if you save time through streamlined data processes… The risk, however, is that patients may feel they have not been taken care of properly, especially if their condition progresses. In the Netherlands, the University Medical Centre Groningen (UMCG) has partnered with Huawei to help manage the spread of infectious diseases in hospitals by using IoT to track hospital facilities and patient traffic. This system can help to improve early detection of hospital-acquired infectious diseases, which will cut down on future medical costs and save lives. The Chinese government now has 15 memoranda of understanding (MOUs) with South Korean companies to introduce telemedicine into Chinese healthcare. These deals will allow South Korea to export drugs and biotech products to China, as well as expand the development of medical tourism packages between the two countries.25 The Welsh NHS is encouraging patients to consult with their GPs via smartphones. Conditions will be monitored via mobile apps and patients will be able to access their health records and book appointments online. The Welsh Assembly is committed to putting digital technology at the heart of healthcare. NHS staff will also be able to use mobile devices when working with medical data.18
  • 5. 5 5.1 Catalysts, milestones and hurdles on the way to revolution Despite the obvious attractiveness of this developing area, there are many potential hurdles that will need to be overcome. The three catalysts that Prescient will briefly discuss below centre on an event that provides insight into changing government mindsets, a landmark approval and a possibly groundbreaking new partnership. In 2016, the FDA seems to have become more circumspect compared to its previous position of allowing digital technology into the human arena, after its announcement that more real-world evidence will be required for approvals.19 A government standpoint that demands more practical evidence that technology will truly benefit patients is no bad thing; for the industry, however, the FDA’s new perspective could create several stumbling blocks. In particular, the added cost burden may mean that the paradigm shift we foresee will not surface this year. In Europe, similar regulatory developments are afoot. At the start of February, the European Commission (EC) announced that it is developing guidelines for mobile health apps.20 Seemingly not as strict in its stance as the FDA, the EC is looking to apps to provide higher-quality health data, using current best practice to ensure that the information collected is also protected. Of particular note, the EC announcement highlighted the paramount importance of ensuring that high quality data must be used if they are incorporated into clinical decision making. In our opinion, the EC making such a statement strengthens the position of IoT by showing that a major global healthcare regulatory body wants to utilise its capabilities. There are also further catalysts this year that are likely to accelerate the development of the industry. One potential impetus that could represent a turning point for IoT in healthcare will be the FDA’s decision regarding Otsuka’s and Proteus’ combination of an adherence monitor with ABILIFY medication. The companies submitted the application on 10 September 2015 following the landmark approval of Proteus’ ingestible monitoring device on 2 July 2015.1314 Approval of this combination of monitoring and medicine, which appears highly likely to occur, will pave the way for more in vivo monitoring devices that are likely to increase patient adherence, or at least enable physicians to identify non- compliant patients. The technology may also allow doctors to subtly vary the dose of medication to optimise the treatment for their patients, leading to potential cost savings. The final catalyst comes from the UK and could change the face of healthcare in Europe. The NHS in England will be partnering with tech companies, including giants such as Verily, IBM and Philips, to carry out seven trials aimed at improving healthcare by using IoT.21 Whilst it is arguable that this is more of a regional, rather than global, catalyst, it could also be argued that a national health provider from the EU5 wanting to embrace IoT in such a broad way could be ground-breaking. Positive results from such a wide-reaching partnership could potentially pave the way for other EU countries to incorporate IoT into their own healthcare systems. 5. Discussion
  • 6. 6 What is intriguing about the NHS partnership are the areas being studied: diabetes monitoring, identification of at- risk older patients, and severe mental illness feature heavily. These trial IOT implementations in patient care, including attempts at identifying how best to keep elderly patients safely out of hospitals, provide a test case for the developed world, where the average age of the population is increasing.22 Proof that IoT can reduce costs whilst helping to improve patients’ quality of life could be game-changing for all potential providers and innovators. Such an achievement could allow innovators greater access to global markets and larger commercial and medical opportunities, especially when coupled with the other potential catalysts we have discussed. Furthermore, we have noticed that the full integration of IoT into hospitals is underway elsewhere globally, including Humber River Hospital in Canada as well as others in North America and Asia.23, 24, 25 5.2 IoT deal trends and applications in healthcare Therapeutic areas Figure 1. Percentage split of key IoT deals in healthcare, by therapeutic area Partnerships in the field of healthcare IoT still largely revolve around either developing existing IoT infrastructure or implementing new technologies. IoT has not yet reached the level of maturity where it can be applied to specific therapeutic areas using an established infrastructure. IoT in healthcare started with monitoring. Its immediate commercial applications were in lifestyle and wellness, with wearable heart rate monitors as a prime example. Currently, most IoT applications involve wearable technologies and are still mainly concerned with monitoring. This trend is not surprising, as chronic diseases are the most cumbersome for healthcare systems and monitoring offers several advantages, including patient safety and compliance, which in turn provide more efficient treatment. As a result, monitoring of patients with chronic diseases such as diabetes is slowly becoming a standard area of application for IoT in healthcare. Recently, big tech companies have developed clearer ideas of what their plans are for the healthcare sector and of the immense potential for IoT in the field, through an understanding of key stakeholder needs and requirements. Consequently, the utility of IoT has constantly been diversifying and includes applications in acute healthcare problems, infectious diseases, lab testing, neurology, ophthalmology, respiratory disease, surgery and many others. Diversity in healthcare IoT applications will ensure that smaller tech companies will be able to compete with larger players while driving innovation. 28% 3% 11% 26% 3% 3% 11% 6% 3% 3% 3% Not therapeutic-area specific Acute health problems Diabetes Health and Wellness Infectious diseases Lab testing Multiple chronic diseases Neurology Ophthalmology Respiratory Surgery
  • 7. 7 Geography Figure 2. Percentage split of key IoT deals in healthcare, by geography IoT in healthcare is a global movement, and large tech and pharma companies are starting to expand into it. There is some local partnering activity as well, mostly in local-scale hospital pilot studies; examples include Princess Margaret Hospital in Canada becoming the first fully IoT-integrated hospital in North America and the NHS partnering with Verily, Philips and IBM to address issues associated with running clinical trials. In the future, local partnering will probably gain some ground, considering that smaller tech companies will advance and diversify their IoT offerings while pharma companies will focus on establishing their local presence in hospitals and clinical trial sites. Deal type Figure 3. Percentage split of company types targeting IoT in healthcare (not including public institutions) Many important deals in the field of IoT still revolve around tech companies partnering with each other to develop new products. These deals will drive the future of healthcare IoT once the participants find more applications for their technologies. To some degree, this trend is highlighting the slow, but nevertheless growing, uptake of information technology capabilities by the healthcare industry. However, other types of deals are increasing in number, where large pharmaceutical companies are partnering with tech giants to innovate and differentiate their product offerings and services. This trend could see an increase over the next few years, as the advantages of IoT in healthcare have already been established and as security improves. Moreover, healthcare authorities are increasingly aware of the numerous benefits of IoT, both to patients’ quality of life and to the sustainability of healthcare systems. Finally, as IoT benefits from technological advancements and as healthcare professionals become more aware of the importance of improved data management, the relationship between IoT and healthcare will improve significantly. Implications: How do we expect the market to react to all this activity in 2016? We are expecting more Big Pharma players to look for medtech partners, and vice versa. We also expect H1 2016 to be particularly active. Some of the deals struck in H2 2015 are expected to mature as the joint ventures carry out stakeholder research to understand the dynamics of a market for which the wheels have already been set in motion. It will be interesting to keep an eye on the Otsuka-Proteus deal and the ABILIFY smartpill in the US. In our view, this would be the first major IoT-in- healthcare product to be approved by the FDA. We are monitoring this very important collaboration as a potential standard-bearer or trend-setter in this space once the expected FDA approval is granted. 64% 18% 6% 6% 3% 3% Global US China UK South Korea Israel 53% 47% Healthcare/Tech Tech/Tech 6. Implications
  • 8. 8 We will see a rise in major hospitals adopting IoT services to manage staff more efficiently, reducing overtime and achieving cost savings of hundreds of thousands of dollars. IoT cloud services will allow hospitals to monitor patient admissions in real time. Given the potential of using Big Data management and analytics to obtain information in real time, CROs and pharma companies will be increasingly interested in adopting cloud services to help in the management and analysis of clinical trials. Based on current trends, we at Prescient expect major partnerships between healthcare authorities and tech companies, not only at a local level, but also at regional levels (i.e., Nordic healthcare systems to be connected to one another, or systems in China, South Korea and Japan to be connected to one another through IoT). In Asia, healthcare tourism is increasing, and such partnerships are expected to materialise towards the end of the year and throughout 2017. This type of partnership may mature sufficiently to reach its potential in the next five years. For 2016, we also expect a rise in the number of deals between healthcare authorities and technology companies at a local level in order to improve macro- level management of hospitals through the efficient use of captured data. IoT in healthcare is an exciting area expected to have a huge impact on both the pharmaceutical and technology industries, making these even more attractive spaces for investment. This will be a seminal year for healthcare IoT; as such, Prescient will be closely tracking any success stories. Throughout 2016, we will be providing valuable insights to help shape decisions in healthcare- related ventures. Table 1. Key partnerships/developments in January 2016 Entities Therapeutic area Geography Entity type Novartis/Qualcomm Respiratory Global Pharmaceutical and medtecha J&J/Plug and Play Multiple Global Pharmaceutical and medtech BlackBerry/Sharecare Multiple US Technologyb and technology Theranos Multiple US Medtech IBM/Medtronic Diabetes Global Technology and medtech Proteus Digital Health/ Barton Health Cardiovascular US Medtech and health institute Medtronic/Medibio Multiple Global Medtech and medtech Babylon Multiple UK Medtech RxNT Multiple US Technology Verily/American Heart Association/AstraZeneca Cardiovascular US Medtech, association and pharmaceutical Celltrion/Medidata Multiple Global Pharmaceutical and medtech ENISA Unknown EU Technology GSK/Qualcomm Multiple Global Pharmaceutical and medtech NHS England/ Verily/IBM/Philips/etc. Multiple UK Health authority, medtech and technology NHS England/Aseptika Unknown UK Health authority and technology a Prescient defines a “medtech” as a company that uses information technology to provide services and solutions within the healthcare industry (not including companies that make large diagnostics equipment, e.g., MRI, PET/CT). b Prescient defines a “technology” company as a company that combines information technology and electronics to provide equipment and services.
  • 9. 9 About: Prescient is an evidence-based decision support partner to the pharmaceutical and biotech industries whose mission is to optimally shape new product, brand and mature brand planning strategies. Contact: For more information about Prescient Healthcare Group or this whitepaper, please contact: Ricardo Mousinho rmousinho@prescienthg.com Dr. Philip Winkworth pwinkworth@prescienthg.com Dr. Roland Galgoczy rgalgoczy@prescienthg.com Ben Hope bhope@prescienthg.com Website: www.prescienthg.com Conflicts of interest: The authors declare that the views and opinions expressed in this article are the authors’ own and that they have not received any monetary compensation for writing this article. The authors certify that they have NO affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers’ bureaus; membership, employment, consultancies, stock ownership, or other equity interest; and expert testimony or patent- licensing arrangements), or non-financial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in this manuscript. Acknowledgements/Special thanks to: Raymond Donninger John Earl Alex Tait Joanne Taylor
  • 10. 10 1 http://whatis.techtarget.com/definition/Internet-of-Things 2 http://healthitanalytics.com/news/can-the-healthcare-internet-of-things-cut-costs-by-25-percent 3 http://www.bsminfo.com/doc/the-internet-things-its-quest-cut-healthcare-costs-0001 4 http://www.imedicalapps.com/2016/01/hospital-set-to-prescribe-blood-pressure-medications-with-ingestible- sensors-to-track-adherence/ 5 http://www.timesofmalta.com/articles/view/20151018/business-news/Digital-data-in-healthcare-is- increasing-by-48-annually.588676 6 http://www.fiercemedicaldevices.com/story/ibm-novo-nordisk-team-seek-new-solutions-treat-diabetes- through-cloud/2015-12-11?utm_medium=nl&utm_source=internal 7 http://www.latribune.fr/technos-medias/lutte-contre-le-diabete-sanofi-s-associe-a-google-501678.html 8 http://www.fiercemedicaldevices.com/story/googles-verily-aha-astrazeneca-team-heart-disease-rd- 75m/2016-01-19 9 http://mobihealthnews.com/40031/google-biogen-will-use-wearable-sensors-to-study-multiple-sclerosis 10 http://www.techrepublic.com/article/IoT-packaging-can-help-healthcare-industry-save-10-billion-annually/ 11 http://fortune.com/2016/01/04/wifi-halow/ 12 http://www.fiercemedicaldevices.com/story/gsk-qualcomm-rumored-form-med-tech-joint-venture/2016-01- 20?utm_medium=rss&utm_source=rss&utm_campaign=rss 13 http://www.proteus.com/press-releases/first-medical-device-cleared-by-fda-with-adherence-claim/ 14 http://www.proteus.com/press-releases/u-s-fda-accepts-first-digital-medicine-new-drug-application-for- otsuka-and-proteus-digital-health/ 15 http://www.wsj.com/articles/fda-approves-alkermes-schizophrenia-treatment-aristada-1444091809 16 http://www.latribune.fr/technos-medias/lutte-contre-le-diabete-sanofi-s-associe-a-google-501678.html 17 https://www-03.ibm.com/press/us/en/pressrelease/48316.wss 18 http://www.southwales-eveningpost.co.uk/Patients-Wales-use-smartphones-health-care/story-28346289- detail/story.html 19 http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDRH/CDRHVis ionandMission/UCM481588.pdf 20 https://ec.europa.eu/digital-agenda/en/news/new-eu-working-group-aims-draft-guidelines-improve- mhealth-apps-data-quality 21 https://www.england.nhs.uk/2016/01/embracing-innovation/ 22 http://www.who.int/ageing/publications/global_health.pdf 23 http://www.techtimes.com/articles/97255/20151020/first-fully-digital-hospital-in-north-america-opens-in- canada.htm 24 http://www.healthcaredive.com/news/how-one-la-hospital-spent-70m-on-a-cutting-edge-it- infrastructure/412861/ 25 http://www.businesskorea.co.kr/article/11943/medical-mou-korean-medical-companies-sign-15-mous- chinese-counterparts