There is a temptation to dismiss the massive surge in interest towards healthtech startups as just the latest craze sweeping through the life sciences industry. Is it something that will blow over when people get bored of it? This couldn’t be further from the truth.
Every year, $6.5 trillion is spent on healthcare worldwide. It is estimated that 30 to 50 percent of this spend is "wasted" due to the misalignment of incentives, interests, strategies and behaviours of parties engaged in healthcare delivery.
There is a growing realisation that existing structures and modes of operation aren’t working. That better human experiences lead to better health. Life sciences companies are trying to close the gap with investments that enable all stakeholders across the health ecosystem to be able to provide patients with better overall health outcomes. And an essential aspect to this transformation are healthtech startups.
$26B has been invested in digital health companies since 2014, growing at 22 percent per year. The focus is on efficiency, virtual care & coordination, wearable devices, personalised medicine, enhanced diagnostics and big data
But smart organisations are moving beyond making investments. Those organisations that understand startups may just hold the key to their future growth while quietly building serious capabilities to unlock massive potential. They’ve advanced beyond the "look and see" startup safari mode into a new operational model where they are strategically building new products and services with health technology at the heart.
Some of these programmes are more public facing like Bayer’s Grants4Apps, Pfizer’s HealthHubs programme or J&J’s JLabs. Others are taking a quieter, less public approach. But for those that hesitate to begin unlocking the massive potential of healthtech startups, you are missing the boat as your competitors are accelerating.
As we move into an era where value-based outcome deals will become the new normal, life science companies understand that a new approach to partnerships is needed. Different ways of working and critically, different speeds of working. Real time analytics and live customer support demands require that agility is the survival trait needed. As Bayer’s Global Head, Digital Health Incubation & Innovation, Eugene Borukhovich says, “Corporations and startups work on different timelines and that sense of urgency is much needed in large organizations.”
The Accenture HealthTech Innovation Challenge is the largest event of its kind in the world. In terms of senior stakeholders from a wide range of health-related organisations, its unrivalled. Real decision makers, in charge of hundreds of millions, if not billions of dollars, interacting, sampling, questioning and experiencing the best healthtech startups on the planet. But what is it they hope to achieve? What is the allure of spending a day with a group of startups whose collective annual revenue is less than the marketing budget of just one of their big brands?
James Musick, VP/Head of Neurology Patient Technology at UCB says, “Startups, particularly in a dynamic area like digital health, are able to explore, attempt, discard and pivot through many innovative ideas at a pace which large corporations are not well-suited to do. By working with startups we not only get to see and be part of this interesting, and sometimes out-of-the-box thinking, but we can at times partner or guide the development of a startup such that a partially viable idea can become fully viable through the big/small company partnership model.”
But can startups actually impact a business? As James says, “looking back over the last five year time horizon there are examples of virtually all the major biopharma companies deploying startup technology into both pre- and post-market settings.”
Eugene sees it similarly. “Corporations exist to execute flawlessly on an existing business model. Startups are paving the way for re-defining business models or driving completely new ones. The hypothesis that has been proven over and over again, is that startups and entrepreneurs see white spaces and focus their energy and brainpower to make an impact. While for a large corporation, a piece of the value chain is just a piece of the value chain for startups it’s their livelihood.”
I’m excited to be joining Eugene, James and all the other judges and startups at the Accenture HealthTech Innovation Challenge. We’ve received more startup applications than previous years and we’ve expanded to include four regional rounds in Dublin, Boston, Tokyo and Sydney.
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