Growing Partnerships With Digital Health Companies Signal Shift in Strategy

Sanofi and Leaps by Bayer are just two pharmaceutical companies using digital technologies to reach stakeholders more effectively.

This spring ushered in a swell of partnerships between pharma and digital health companies that flag a growing trend in healthcare. This much needed move to digital has been spurred by the increasing number of health consumers who want an Amazon-like experience, combined with the forces of the COVID-19 pandemic that required pharma to rapidly adopt digital technology.

"The pandemic pushed both digital health and telehealth forward by 15 years in a matter of three weeks," says Rick Anderson, president and general manager of North America at DarioHealth.

According to a CBI Insights report of 2021 digital health investment activity, funding grew 79% year over year to reach a record of $57.2 billion. Experts claim these investments will only continue to grow. "There are more and more opportunities for collaboration, and I expect that will accelerate over the next three to five years," Anderson adds. "We're definitely going to see more and more of those kinds of partnerships as people try and leverage those different worlds."

Jurgen Eckhardt, MD, senior vice president and head of Leaps by Bayer, says the company deems digital user–centered products as a relevant and growing area for the organization that will help it be closer to patients and healthcare providers (HCP). "From our point of view, digital user–centered products can become an important link between Bayer's treatments and diagnostics efforts to the daily lives of patients' and HCPs," he says.

Examples of 2022 pharma investments in digital health include partnerships between Biogen Inc. and MedRhythms, who joined up in May to develop and commercialize an investigational prescription digital therapeutic for the potential treatment of gait deficits in multiple sclerosis. Novartis and Evermed also made waves in May with a new Netflix-style approach that entails tailored, education-based videos aimed specifically at rheumatologists. And in March, AstraZeneca sold its disease management platform to Huma Therapeutics and the two companies will collaborate on creating apps targeted at different therapeutic areas.

Partnerships at work

HealthLeaders spoke with leaders from Sanofi and DarioHealth about their recent partnership, as well as Leaps by Bayer and Woebot, and all agree that despite the challenges, the pharma industry is realizing the need to use digital health to bring added value to patients.

Just last month, Sanofi established a $30 million agreement with digital therapeutics company DarioHealth to develop solutions on Dario's platform and expand the commercial reach of its products in the health plan and employer markets.

According to Alex Condoleon, MD, head of digital healthcare for U.S. general medicines at Sanofi, the company made this decision because it thinks digital solutions can transform how it discovers, develops, and delivers therapies. "Collaborating with Dario brings us another step closer in accelerating our mission of reversing the course of chronic diseases through the integration of healthcare and technology to help empower people to improve their health," he says.

Anderson says that Sanofi's approach to digital health is not just a one-off, but rather a complete shift in its business mindset. "What was interesting to us about Sanofi was that many partnerships between digital health companies and pharmaceutical companies consist of using the digital health company's software as an adjunct or an add-on to an existing device or pharmaceutical product. There has not been much in terms of pharma companies looking at digital health and saying, 'Okay, here's where healthcare is going, and we want to be there.'

Sanofi is a visionary because it is seeing that digital therapeutics can be an opportunity to provide care to people as a separate category."

Condoleon says that is true.

"We believe the integration of healthcare and technology can help empower people to improve their health," he says. "That is why Sanofi is a leader in digital partnering to solve critical challenges and pioneer new business models in this rapidly evolving space. Through our collaboration with Dario, we're aiming to enhance the value of digital therapeutic solutions and further our commitment to help people with personalized whole health disease management solutions.

Challenges

The challenge for Sanofi and others, according to Anderson, is how to get from how they currently do business to a more consumer-centric model that adds value. "The only way you get to value-based is to have digital health as a component of it," he says. "This is going to become an integral part of business just like the other pieces."

However, the shift won't be an easy one. It will be daunting for the industry to steer away from using rebates and other structures to capture and hold on to customers. This model generates multiple millions of dollars of revenue on those products. Reversing the thought process to provide more value within a new revenue structure, rather than being rebate-based, will be a difficult transition for many, Anderson says.

"Many will struggle with how to transition to more consumer-focused solutions without cannibalizing existing business, but it's worth it," he says. "You get a one-to-one relationship with people through digital health. And you can collect a lot of data, you can understand how to provide value-based contracting. Theoretically, for every member on a medication or a drug, you can determine the savings related to those people. Another advantage is the ability to conduct real time, real-world evidence studies at a much faster pace and understand how to cycle through that in terms of providing care to people." 

This is definitely one of the goals of the partnership with Sanofi. "Working with Dario, we plan to generate evidence relating to the effectiveness of Dario's solutions and platform in improving diabetes management, patient engagement in their self-management of diabetes, and utilization of healthcare resources in a real-world setting," Condoleon says.

Better outcomes for all

Digital health solutions can lead to better relationships and better patient outcomes, says Condoleon, who expects the partnership with Dario to bring both of those elements to the table.

"Through this collaboration, we aim to expand access to Dario solutions for people living with chronic conditions, such as diabetes, hypertension, musculoskeletal pain, and behavior health, through payers and employers," he says. "Our hope is that, by offering patients a range of technology solutions including coaching, education, and digital sensors through this collaboration, we can empower them to manage their chronic conditions and help improve outcomes."

Similarly, Eckhardt, at Leaps by Bayer, says the impact investment arm of Bayer AG is investing in transformative digital technologies to improve its mental health initiatives. The $9.5 million investment in Woebot Health marks Leaps by Bayer's first investment in mental health.

"Regaining mental health is one of the main focus areas of Leaps by Bayer, and we believe that Woebot's technology represents a unique opportunity to support the development of digital behavioral health solutions," he says. "Investing in Woebot displays a unique opportunity for Leaps by Bayer to support brain and mind protection and to transform health with data."

Eckhardt expects to see better patient outcomes via digital health than from prior traditional methods.

"Woebot's approach in combining psychology and technology with AI and clinically proven therapeutic research has the potential to significantly improve patient's well-being by providing 24/7 access to digital behavioral health solutions to help with the unmet need," Eckhardt adds.

We design our digital applications to provide predictive, personalized, and actionable insights, to patients HCPs, and healthcare providers."

Eckhardt says that Bayer understands "that we cannot walk this road alone, that's why we have several avenues in place, such as Leaps by Bayer and the G4A Digital Health Partnerships Program, that help us identify areas of collaboration with high-potential companies to accelerate our digital capabilities and support us in our efforts to bring the right tools to our patients and HCPs."

According to Anderson, this is just the beginning of a growing wave of pharma and digital health partnerships. "Digital health and digital therapeutics will become part of the landscape much like pharmaceuticals and devices are today," he says. "We will continue to see more cross-industry partnering associated with digital health."