With the proliferation of mHealth apps, it was only a matter of time before healthcare providers would start prescribing apps as soon as apps proved to be as or more effective than prescription drugs. Happtique, a mobile health application store and app management solution startup will launch a trial of mRx™, the first program to enable physicians to prescribe mHealth apps to patients. You could call it an “app formulary” that complements (and competes) with a traditional drug formulary. Anecdotal evidence has circulated that some apps have been more effective at addressing some chronic conditions than drugs. As more hard data is available, this represents a major threat to lucrative drug franchises. Pharma Looking Like a Cross Between Railroads and Newspapers
As I outlined in IBM’s Reinvention Should Inspire Flat Pharma Businesses, pharma faces a grim future if they don’t take action. A program such as Happtique’s can be either a huge opportunity or a huge threat depending on how they handle it. Over the last several months, I have had many meetings with leaders of pharma companies that are eerily reminiscent of meetings I had in the latter half of the 90′s with newspaper executives.
Pharma execs will often share that when they gather as an industry, they all commiserate with their industry colleagues that their business is in their words “effed”. However, when they return to their office “innovation” is little more than incremental tweaks to existing business models. Like the newspaper execs I observed, the vast majority either seem to not fully believe the consensus about the future or they are simply unable to marshal the ability to drive change within their organizations. In either case, they are lulled into complacency as they remain hugely profitable and face the reality of dealing with the short-term thinking of Wall Street. I’m afraid most of them will have a final chapter of their career that reads the same as newspaper execs of that era. The chapter title will be “He/she couldn’t read the handwriting on the wall.” I have yet to see a pharma CEO like John Paton who is one of the few newspaper CEOs to fully take advantage of the changed media landscape.
In fairness, John Paton took over a bankrupt newspaper chain so it’s relatively easier to make drastic change when an organization is that close to extinction. It is instructive to know that IBM swung from their most profitable year to losing $16 billion in just three years. The lesson is that change looms out there for awhile and then hits like a freight train. The question is whether pharma will have to wait until they near death or if they can make bold changes before they are in a death spiral like the newspaper companies before them.
Smart Pharma Will Get Out of the Stands and Onto the Field
There have been a proliferation of “app challenges” that have been sponsored by pharma. While the challenges are a step in the right direction, they are doing the equivalent of providing polite applause from the stands and giving the gladiators (aka startups) some modest rewards for their efforts. When I am asked for my advice by pharma execs regarding how to drive change and innovation, my primary piece of advice is to get out of the stands and onto the playing field. They can put more skin in the game (both money and people), however it need not be at the same scale as their venture arms. In fact, they could probably get involved with ten companies for the cost of one of their venture investments in biotech.
Consider the learning they could get from the program Happtique is running. One of the benefits of participating in a program like this is pharma would get out of their industry bubble. For the program trial, Happtique is recruiting physician prescribers who treat heart disease, diabetes, and musculoskeletal conditions, as well as physical therapists and trainers to test the technology with health and fitness apps. After a training program, Happtique will track both prescribing processes and patient mRx™ downloads through early summer. “Mobile app prescribing will add an entirely new dimension to my ability to care for patients,” said Steven Magid, M.D. of New York-based Hospital for Special Surgery. “The use of Happtique’s mRx™ will ultimately improve patients’ health.”
Another Forbes contributor, Dr. David Shayvitz, comments in Pills Still Matter; So Does Biology — Managing Expectations About Digital Health about the combination of pills and apps likely being the most effective combination. I agree. Another sage industry commentator, John Moore of Chilmark Research, has interesting analysis in a piece mHealth: There When You Need It. He debunks the myth that lower income people won’t engage with mHealth apps, however two key attributes need to be present. First, physicians reimbursement needs to be aligned with outcomes (and thus the transition from fee-for-service to fee-for-value that is underway). Second, patients consistently engage if there is someone they are interacting with via the tool such as a nurse.
Lessons from Microsoft for Pharma
I’m the first to say I’m not an expert in pharma. However, I can see pattern recognition and have seen how one of the few organizations to spend as much on R&D as pharma (Microsoft) can be both a cautionary tale and a guiding light. Over the last 15 years, Microsoft has spent tens of billions on R&D. I would argue there are only two true stand-alone successes that have emerged out of that massive investment — Xbox and Expedia. In both cases, Microsoft physically and culturally separated them from the mothership. In Expedia’s case, it also made the most sense to separate them financially. It wasn’t that the Xbox and Expedia teams had people who were any smarter or hard-working than other teams at Microsoft. The key was they were unshackled and unfettered.