By: Mathini Ilancheran -- Principal Analyst
31 March, 2019
Pharma companies have three targeted user bases: physicians, pharmacists, and patients. Various digital platforms are being used to create a satisfactory customer experience for educating these end users. The core focus of these platforms is on patient care, education, and adherence. Figure 1 below provides a snapshot of the key digital platforms widely applied to patient education, engagement, recruitment, and physician training.
Medical Animation: Pharma companies use animated videos to obtain patients’ consent for participation in clinical trials. These provide clarity on the effects and consequences of drugs undergoing trials and thus improve patients’ adherence in trials. The adoption of medical animation technology by pharma companies to explain the mechanisms of drugs’ action and real medical procedures is driving the growth in this market. As of 2017, the estimated value of this market was $117.3 million, growing at a CAGR of 20.8 percent, projected to reach over $300 million by 2021. North America has the largest share at over 40 percent, driven by the presence of major pharma companies, increased healthcare spending, and so on.
Among therapeutic aspects, oncology accounts for the largest share, attributed to patients’ increasing awareness about various diseases, side effects, and defects. There is a need of computer-aided diagnostics for the geriatric population, and medical animation is currently used to highlight the details of diseases and investigational drugs in trials.
mHealth Apps: The mHealth market comprises medical devices and healthcare apps, with the devices dominating, generating 80 percent of the market revenue. The potential of mHealth apps to enhance patient adherence and engagement in clinical trials is being increasingly recognized by sponsors, CROs, academic institutions, etc. As a patient-centric solution, CROs conduct home-based trials to improve patient adherence. Such virtual trials ensure no travel burden on patients and allow them to participate in trials from the comfort of their home. This model is driving the demand for apps for cardiac monitoring, diabetes management, multi-parameter tracker, sleep apnea, and more.
As of 2017, the app market value was estimated at $10 billion, growing at a CAGR of 15 percent, projected to reach over $30 billion by 2021. A pharma-branded app with customization and behavior modification tools is a valuable resource to all healthcare stakeholders and can enhance the profile of the sponsoring pharma company, adding patient engagement value.
Virtual Reality (VR) and Augmented Reality (AR): Since 2012, head-mounted display product development (Oculus Rift, HTC Vive, Gear VR, and Google Cardboard) has been showing consistent growth. This has penetrated the healthcare industry in recent years with focus on educating patients about treatment methods. Trials involving cognitive behavioral studies, pain management, dental treatment, body rehabilitation, and cancer pain using VR are in nascent stages, according to data from clinicaltrials.gov.
Patient-centric healthcare focusing on retention and engagement programs is the main driver of this market. As of 2017, the estimated market value was $750 million, growing at a CAGR of 28.6 percent, projected to reach over $2.59 billion by 2021. North America continues to lead the combined healthcare VR hardware and software market with a share of over 45 percent in 2017.
Figure 2 shows the market size and growth of all the digital technologies described above
Medical Animations: The supplier market consists mainly of specialists catering exclusively to the life sciences industry. The presence of multiple players gives pharma companies greater choice and hence more buying power. Suppliers also consider pharma an attractive area since it offers the benefits of large purchase orders, better payment terms, and greater brand visibility.
mHealth Apps: The supplier market is highly fragmented, with the technology players catering to multiple sectors and specialists. Again, the pharma industry offers greater choice and more buying power. Suppliers consider pharma attractive in terms of brand visibility. However, other industries are often preferred for their lack of regulatory stringency.
VR and AR: The supplier market consists of multiple supplier types, including specialists and generalists. Pharma companies can always choose to switch between suppliers, and this given them medium to high buying power. Suppliers consider the pharma industry attractive, although its value in revenue generation is relatively low owing to its highly regulated environment.
Figure 3 provides a perspective of the current supply market, with future trends for all the aforementioned technologies.
From the current state of the supply market for these technologies, the suppliers’ mindset is focused on beating competition. Hence, they focus on leveraging the market price through innovative technologies and specialization considering the presence of several service providers. The market is highly fragmented with numerous technology providers, but the players with experience in the pharma industry are limited to 50+. However, pharma companies prefer to engage with certain key players who focus on life sciences and have experience with programs involving patient and physician engagement, such as Random42 Scientific Communication, Blausen Medical Communications, and Cast Pharma. In the future, suppliers are expected to expand their scope from simple pharma marketing to assisting with patient engagement programs.
Medical animation has a relatively low strategic impact and supply risk, whereas AR, VR, and mobile apps have medium supply risk with high impact on patient retention. The adoption rate of AR, VR, and mHealth applications for patient retention is currently low, with little strategic impact on pharma. The use of these technologies for patient retention and engagement can increase with the need for patient adherence, and hence have a high strategic impact on the pharma industry. This would result in improved patient retention and shorter timelines for trial completion. The supply market would see changes, with a greater number of technology providers expanding their scope to life sciences as well, resulting in this service becoming strategic, with innovation playing a crucial role along with cost competition.
The attractiveness of pharma as a buyer among technology providers is still in the development stage in terms of relative business value due to its highly regulated environment. Providers are attracted by perceptions of future business potential. Therefore, they are ready to invest time and effort in developing a long-term relationship with a buyer that is driven by the goal of increasing sales over time. Once suppliers gain experience in working with pharma companies, they can expand their scope of business to the life sciences industry, including biotechnology, medical devices, CROs, and others. This will increase their relative business value in terms of revenue generation and render pharma buyers more attractive among suppliers.
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