Australia to become a global destination for digital Health – but only with the right investment

Digital & Innovation: Australia must commit to sustained digital health investment to position itself as a global destination for digital health innovation and commercialisation, according to ANDHealth’s latest State of the Industry report, The Awakening Giant: The Rise of Australia’s Evidence-Based Digital Health Sector launched on 19 October 2022.

“Australia’s evidence-based digital health sector has evolved significantly since 2020, with both the number and maturity of companies in ANDHealth’s pipeline increasing substantially,” said ANDHealth CEO and Managing Director, Bronwyn Le Grice.

“By bringing together our world-class health and medical research capabilities, and our growing technology expertise, Australia has the opportunity to capitalise on the global digital health sector – predicted to reach US$660 million by 2025 – and build a high-growth industry that sees Australia’s health innovators and their innovations remain onshore.

“A thriving digital health sector will deliver jobs, exports and critical healthcare improvements for providers and patients, but The Awakening Giant report highlights that for evidence-based digital health technologies to make it to market, we need dedicated programs, larger investment pools, and clearer reimbursement pathways.”

Utilising the insights from 569 Australian digital health companies, The Awakening Giant reveals 85% of digital health companies plan to raise capital and grow their team in the next 12 months, with six companies planning to raise in excess of $10M.

The intention of the majority of Australian digital health companies to raise capital in the next 12 months is an indicator of the immense growth potential of the sector, which can also be seen in the achievements of participants of ANDHealth’s flagship ANDHealth+ and Masterclass programs, which have gone on to raise over $90 million, create 426 new jobs, initiate 67 new clinical studies, and impact more than 775,000 patients.

Companies in the evidence-based digital health sector are seeking to solve clinical challenges across a highly diverse suite of health conditions, with 15% of companies primarily focused on addressing mental health. Meanwhile, one of the advantages to digital interventions is that they can be applied to a number of different health conditions, and nearly one in four companies are looking to leverage this and deploy solutions with applications across multiple disease states.

Aligned with global trends of driving patient engagement and empowerment to deliver better health outcomes, 30% of companies are developing technologies that are patient-centric, including solutions focused on disease self-management, patient behaviour change, and medication management. Supporting our doctors and physicians is also a key area of focus with 18% of companies focusing on clinical decision support.

Elizabeth Koff, Managing Director of Telstra Health and former Secretary for NSW Health, said at the launch event “The government needs to create an ecosystem for the development of digital solutions. The other things that is critically important is that many of the digital solutions come from clinicians, but their skill set is quite different to developing something that requires commercialisation investment and IP registration, and nobody can do it alone. That’s where the value of ANDHealth has been demonstrated today.”

The Awakening Giant reveals median capital raised in the digital health sector remains low at just $278,500. However, resilience in the sector has increased with 41% of companies now having >12 months of operating runway, up from 21% in 2020.

Moving forward, regulation and reimbursement frameworks which incentivise new products; support programs proven to deliver meaningful clinical and commercial outcomes; and procurement processes which recognise, reward and stimulate Australian innovation; will be transformational for the sector. 79% of digital health companies agree that access to reimbursement will accelerate growth.

Le Grice said at the launch event “This remains the hardest thing to do – who is actually going to pay? Why are they going to pay? And, what external mechanisms such as reimbursement is used to justify what you’ve been paying or to allow them to pay.”

“Looking forward, we have all the critical components of a powerhouse digital health sector which can drive immense economic and health benefits for all Australians,” said Le Grice.

“As we look at how fast this sector is growing globally, it is clear that Australia needs to create investment capabilities and capacity with deep domain expertise and drive policy structures around reimbursement and procurement which recognise, reward and stimulate Australian innovation and commercialisation.”

ANDHealth is funded by the Australian Government Department of Health through the Medical Research Future Fund and is supported by its Core Partners: Murdoch Children’s Research Institute, Novartis Pharmaceuticals, Roche Australia, Planet Innovation, Telstra Health, RMIT University, Curve Tomorrow, Beamtree, HPM Executive and Health XL.