Executive summary
With advancements in mobile technology and AI, the benefits that can be delivered to patients via next generation digital patient companion apps have changed, opening up opportunities for pharma to deliver and capture value.
There are multiple mechanisms through which pharma can generate increased revenue and cost savings across the entire product life cycle of pharmaceutical products, including:
- Increased number of patients initiating treatment (driven by faster referral of existing patients or identification of new patients eligible for treatment)
- Reduced cost of finding and recruiting patients for clinical trials (cost saving)
- Increased time on treatment (driven by improved medication adherence and/or better efficacy and safety outcomes for patients)
- Defend the pharmaceutical price and market share from competition (IP protection/extension and value differentiation via real-world data)
Digital companions must solve patient's unmet needs and/or provide value to healthcare professionals while also delivering a return to the business in order for pharma to invest.
Background
Disease management apps are increasingly popular, with the global disease management app market size estimated to be USD 7.6 billion in 2022 and projected to hit around USD 20.28 billion by 2032 (a CAGR of 10.32%) (Precedence Research, 2022). The growth is being driven by increasing prevalence of chronic diseases in aging populations, greater interest from patients in engaging with their own health using digital tools, and increased penetration of mobile phones globally. A recent study found that the average number of mobile apps a person uses per day is 9, with up to 30 different apps often used each month (Tech Report, 2023).
Given the proliferation of mobile app usage, and the opportunities for integrated, personalised health care at scale, pharmaceutical companies are beginning to explore new ways to engage patients throughout the patient journey. There's a growing recognition that companion apps can be one way to augment traditional treatments and meet patient and provider unmet needs, beyond the pill. To justify an investment in digital companions, however, pharmaceutical companies need to be able to clearly articulate the business case, with new models beginning to emerge.
What is a digital companion?
A digital companion is a digital health solution, often a mobile application, used to provide either interventions or healthcare tools and resources to support patients with their treatment journey and management of disease.
A digital companion can be drug-exclusive, in that it is designed specifically for use with pharmacological treatment and is only available to patients who are prescribed that treatment or it can be drug-agnostic, in that it can provide patients with specific disease support, regardless of what treatment they are using to manage their condition.
How digital patient companions can support pharma’s core business
Digital companions allow pharma companies to differentiate their products by providing better support to patients throughout the treatment journey, while data gathered can help with pricing, market access, and reimbursement.
When it comes to determining the return on investment of a digital companion app, there are direct and indirect ways to calculate value. Direct revenue sources include direct payment for the app, which can come either via the end-user (the patient) or via a payer (e.g. an employer, insurer), as well as indirect revenue sources, where the companion app leads to increased revenue from the sale of pharmaceuticals, or cost savings.
Currently, there are few cases where pharma is directly monetizing companion apps via a pay-for-use model, and often companion apps are either distributed for free via patient or physician networks (in the case of disease companions) or coupled and packaged directly with specific drugs (in the case of drug-exclusive companions).
As such, there is an increased focus on the ways in which digital companions can increase revenue of pharmaceuticals themselves, or save money elsewhere in the business, to justify the return on investment.
There are four mechanisms through which digital companions can drive value for pharma indirectly:
- Increased number of patients initiating treatment (driven by faster referral of existing patients or identification of new patients eligible for treatment)
- Reduced cost of finding and recruiting patients for clinical trials (cost saving)
- Increased time on treatment (driven by improved medication adherence and/or better efficacy and safety outcomes for patients)
- Defend the pharmaceutical price and market share from competition (IP protection/extension and value differentiation via real-world data)
Treatment initiation
When and how patients initiate treatment depends on a number of factors, including the nature of the disease, the healthcare system, insurance coverage, and personal factors, like education and attitudes towards the medical interventions. A digital patient companion can be a unique way for a pharmaceutical company to get in touch with a relevant patient group, and also to generate discussion for a new therapy amongst the scientific community to drive increased share of voice amongst healthcare practitioners.
This can be particularly relevant in small patient populations with rare diseases. A digital companion that allows patients to identify if they are both eligible for treatment and how that treatment might be funded (i.e., whether they have coverage via insurance in the case of the US) is one way that is being explored to reduce barriers to treatment initiation. If patients find their way into treatment earlier, this has a direct impact on sales revenue. Similarly, driving an increased share of voice among healthcare professionals is likely to lead to increased treatment initiations vs. alternative therapies.
Recruiting patients for clinical trials
Patient enrollment in clinical trials is time-intensive and costly. It has been estimated that patient recruitment accounts for 32% of clinical trial costs, making it the largest cost driver of clinical trials. In 2015-2016, the average cost to recruit one patient to a clinical study was $6,500+, and the average cost to recruit a new patient to replace a lost one was $19,000+ (Moore 2018). The figure today is likely even higher.
Digital companions (disease-specific) make it possible to reach a large number of patients globally, all on one platform. Therefore it can be a great tool to help identify relevant patients for clinical trial recruitment, thus saving pharma companies time and money.
Treatment continuation
Digital companions can also support treatment continuation through enhanced medication compliance and persistence (adherence), superior clinical and safety outcomes, and the provision of relevant clinical support tools and data to healthcare professionals.
Medication adherence is a multi-faceted issue, but with six of the eight most common predictors of medication nonadherence related to patient psychology and education, digital companions provide a meaningful option in which to address barriers, in addition to practical digital support, via notifications and reminders. One study found that increased adherence could lead to increased sales volume ranging from 3% to 20%, contingent upon the specific therapeutic area (Deloitte 2021).
It’s not just improved adherence that can drive treatment continuation, however, with digital companions allowing patients to track goals and health data over time, as well as supporting them with disease and treatment management. With a combination of digital tools and medical treatment, there is the potential to improve health outcomes, which can lead to treatment continuation. For example, weight-loss medications could benefit from a digital companion that promotes physical activity and healthy eating, providing a coordinated benefit. Furthermore, data collected via an app provides healthcare professionals with greater insight into their patient's treatment journey and, in certain circumstances, can act as decision support leading to treatment continuation.
Defend price and market share from competition
Pairing a digital companion app with a specific branded drug can also be a tactic to protect and extend intellectual property. If a companion app is bundled with a prescription drug, it can potentially be classified as a combination product. New draft guidance was published by the FDA recently on Prescription Drug-Use Related Software that describes the potential label changes for medicinal products that would follow from introduction of a software combination. Based on a label change and requirement for the digital companion to be paired with a drug, pharma companies may be able to better defend against competition (for which there is not a digital companion).
Digital companion apps can also be used to generate real-world data on treatment use and health outcomes. The benefits of collecting real-world data include an improved understanding of patient real-world treatment pathways, the ability to collect data that can be used in health economic evaluations and form part of price discussions with payers, and pinpointing patient sub-groups that derive the most benefit from different treatment alternatives. Real-world data can also be used to inform pharma marketing activities.
Conclusion
There is a great opportunity for pharma to lead the way when it comes to building the next generation of digital companions that provide value to patients and healthcare professionals. However, there needs to be recognition that building these products requires a business case for pharma to invest.
Sources
Precedence Research (2022) https://www.precedenceresearch.com/disease-management-apps-market
Tech Report (2023) Mobile App Statistics Everyone Should Know in 2023: https://techreport.com/statistics/app-statistics/#:~:text=Mobile App Usage,-Just because you&text=The amount of time spent,apps%2C and 30 each month.)
Moore, Zhang, Anderson, Alexander. (2018). Estimated Costs of Pivotal Trials for Novel Therapeutic Agents Approved by the US Food and Drug Administration, 2015-2016. JAMA. Retrieved from https://pubmed.ncbi.nlm.nih.gov/30264133/
Davis B, Ahmed A, et al. Deloitte 2021. https://www2.deloitte.com/us/en/insights/industry/life-sciences/importance-of-personalized-therapies.html
