Shifts in Pharma’s digital health landscape – Deep dive with Dr Ramin Rafiei

In this Health Industry Hub interview, Dr Ramin Rafiei takes us on a deep dive into the current digital health landscape for the Pharma industry, culture and capability changes required to accelerate digital health adoption, challenges in the commercialisation of digital health solutions and the magic formula for patient-centric and personalised medicine.

Health Industry Hub: What is the current digital health landscape in the Pharma industry in Australia and how does it differ from the US?

Dr Ramin Rafiei: At a macro level, the underlying dynamics driving innovations in digital health by pharma is remarkably similar between Australia and the US. These organisations are ultimately accounting for shifts towards home-based treatments, a focus on patient preferences, rapid rise in biologic and biosimilar adoption, and increasing emphasis on value-based agreements.

Having pioneered integrated digital medicine solutions, I’ll use an example that’s close to my heart – the rising adoption of biologics and biosimilars. Biologics account for only 2-3% of all prescriptions written in the US, while being responsible for nearly 50% of net drug spending. This is a big deal and it’s not too dissimilar a trend here in Australia.

Payors are placing pressure on pharmaceutical companies. So now the real-world performance of the drug needs to either match its clinical efficacy or meet a minimum adherence threshold before pharma gets paid. Digital medicines provide a standardised way of measuring value, for the care, the drug, the service.

To succeed, the Pharma industry needs to design a strategic and methodological pathway to embed digital health as a key corporate cultural aspect.

Health Industry Hub: What culture and capability changes are required to accelerate digital health adoption throughout Pharma organisations?

Dr Ramin Rafiei: My recently published paper Digital Health Integration Assessment and Maturity of Biopharmaceutical Industry maps the digital health transition in the Pharma industry. Navigating this transition requires overcoming biases, internal culture and values, training and education, investments, and partnerships.

While at a macro level, Pharma organisations are among the least digitally mature sectors, in this paper I’ve shown large variability in digital maturity on the micro level. The adage “culture eats strategy for breakfast” holds true here, and what I’ve demonstrated is that Pharma’s internal cultural dynamics largely influence their digital maturity.

For example, as Pharma’s digital maturity increased, leaders had more diversified (non-healthcare) backgrounds, and companies relied less on promotion from within for digital leadership. After all, you can have the most sophisticated digital health strategy, but if it’s not supported by senior leadership it never quite takes off.

There is also another cultural aspect which I want to emphasise here, and that’s innovation management. Pharma’s core innovations around the molecule and delivery mechanisms are well established, but in digital it’s the Wild West today. It is as if we’ve forgotten the innovation management it demands to achieve scalable and robust digital health solutions. Now don’t mistake innovation for creativity. Because to do innovation well you need rigour. 

Formal education and training in digital health offers one pathway to overcome the cultural limitations encumbering Pharma organisations. Digital health literacy is critical to seeing our industry reach digital maturity and it impacts not just us, but also providers and patient populations. It needs to be inclusive.

Health Industry Hub: How do you see digital therapies being built into product portfolios and how would they add value beyond traditional therapies?

Dr Ramin Rafiei: There is no doubt that digital health is now at the forefront of innovation in the Pharma industry. Digital health is adding value across all aspects of the drug value chain, including clinical research & drug discovery, lifecycle management, product commercialisation and beyond-the-molecule initiatives.

Given that Pharma’s core business is clinical research and drug discovery, it should come as no surprise that today their primary focus in digital health rests in this segment. Clinical trials are becoming increasingly complex and biologics are vastly more expensive to discover. In response, Pharma is using artificial intelligence (AI) to reduce attrition rates and R&D expenditure, parse through vast data to accelerate understanding of disease pathology and identify new drug targets and candidates.

Pharma is turning toward digital health not only to improve the data collected from enrolled participants, but also to increase patient recruitment and retention – the largest cost driver of clinical trials and exacerbated now by the pandemic. As trials move toward a hybrid physical-virtual model, digital biomarkers will generate novel data endpoints outside of traditional clinical environments and expand insights directly from the patient’s home.

The second area of priority for Pharma is lifecycle management. Digital health products in this category aim to provide support for Pharma’s drugs and often fall in line with their therapeutic portfolios. They generate real-world evidence and aid in gathering novel data sets to differentiate and extend the longevity of their molecules.

Few Pharma companies are proactively designing drug products with integrated digital capabilities. Efforts here include integrated sensors and apps enabling drugs to aid in chronic disease management which can collect a variety of data from general adherence to pharmacokinetic and pharmacodynamic data. These kinds of data can better inform patients and their providers about usage behaviours to optimise drug adherence and treatment. Unsurprisingly, these efforts are largely led by the most digitally mature Pharma companies.

It is interesting to note that beyond-the-molecule initiatives are least explored by Pharma, which shows a general reservation towards the adoption of digital therapeutics (DTx). While some partnerships have been announced the results have been mediocre. The DTx space is an area that will blossom, however, the push to embrace a beyond-the-molecule business model is in its infancy today.

My general recommendation for DTx companies is to think hard on how they can add value to the drug across the other segments mentioned earlier. This might be a provocative statement, but Pharma is simply not ready for pure play DTx. That said DTx is a popular investment play today and everyone appears to be rebranding to a DTx company. It’s getting noisy out there.

The final point I want to make is that we as an industry need to be more proactive in identifying what pain points can we address 3-4 years before a drug hits the market. Today’s often reactive approach is limiting the value that can be realised from augmenting digital with product portfolios.

Health Industry Hub: What are the key challenges in the commercialisation of digital health solutions?

Dr Ramin Rafiei: In understanding the challenges in commercialisation, we need to be reminded that Pharma ultimately is in the business of manufacturing molecules. As such, on the path to commercialisation, Pharma is heavily vested in forming partnerships in digital health. Frankly, partnerships are the desired format for achieving digital health maturity. This reminds me of the relationship between Biotech and Pharma. Similar dynamics are at play here.

Exemplifying this partnership model is Janssen Pharmaceutical Companies of Johnson & Johnson, who have done a lot of work in the cardiac space of late, within a competitive market. With DOACs (anticoagulants) and SGLT2 inhibitors as some of their biggest blockbusters, they need to stand out from the competitors. Their research is looking to leverage real world evidence to expand implications towards their pipeline and possibly find novel uses for drugs outside of traditional randomised clinical trial design.

Their partnership with Apple aims to use the apple watch for early identification of patients who may benefit from anticoagulation due to atrial fibrillation (AFib). While AFib goes generally unnoticed until it’s too late, the Apple Watch can help get patients to therapy faster. This remote monitoring of patients can also lead to possible site-less trial design which Janssen is saying they want to do with an upcoming study in heart failure using the apple watch. Site-less trials rely on digital health technology but have not been done on such a large scale, so Janssen is arguably taking a big risk albeit with significant upside and a trigger for wider adoption in the pharmaceutical industry.

As partnerships continue to pave the way towards pharma digital maturity, entirely new divisions have emerged in these organisations dedicated to the identification and integration of market-ready digital solutions. The Novartis Biome best demonstrates this model of market engagement, and digital health portfolio management. Establishment of these dedicated vehicles evidence the significant noise level that exists in the digital health industry, filled with solutions that cannot scale beyond a single geographic region, lack a robust business model, or have not been proven effective. This mismatch between Pharma’s needs and available solutions has forced the adoption of piecemeal commercial solutions to date which are not sustainable in the long run. We need to move towards more interconnectedness if the digital health dream is to be realised.

Health Industry Hub: How do regulators and Pharma need to evolve in cooperation for the benefit of patients?

Dr Ramin Rafiei: Federal regulators are redefining their models for evaluation of digital technologies to facilitate adoption. The slow pace of digital health adoption by Pharma organisations has often been attributed to regulatory barriers.

Today, this could not be further from truth. The FDA’s progress regulating digital health is nothing short of inspiring. Take a look at the FDA Software Precertification Program, currently in pilot mode, which effectively certifies the organisation developing the digital health product rather than the product itself. This approach stems from the nature of software itself, which undergoes rapid, continuous, and iterative improvements. Doing so, they enable a more streamlined and efficient regulatory oversight.

Another example is the FDA’s evolving stance on artificial intelligence (AI). We have seen in recent years a number of so-called “locked algorithms”, approved by the FDA and used in the measurement of stroke risk or detection of diabetic retinopathy. Now the FDA is getting ready to streamline approvals for software that is probabilistic or adaptive in nature. Overall digital health is so new, that regulators have to figure this all out which gives Pharma companies the chance to partner with them.

Proteus, once a golden unicorn in digital health, had collaborated closely with the FDA to obtain clearance in 2012 for its novel bio ingestible digital pill, paving the way for future innovations in this product category. Apple, with its first direct to consumer FDA cleared ECG monitor, is another example of how collaboration with regulatory agencies can result in new business models.  

The Therapeutic Goods Administration (TGA) in Australia has a track record of following the FDA, and I’m pleased to be witnessing improvements in the levels of regulatory innovation now.

Health Industry Hub: Is Science + Data + Technology + Evidence the magic formula for patient-centric and personalised medicine?

Dr Ramin Rafiei: ‘Sequence a whole human genome for sub $1000 and the dream of personalised medicine will be reached’. We know this dream wasn’t realised because it was lacking the rich longitudinal data sets on patient behaviours and health outcomes. Today digital health enables this phenotyping at high resolution and scale, which is the missing piece for achieving true personalised medicines. 

How do you achieve the unbiased phenotyping required to realise personalised medicines? Often, the problem in digital health is that you create a product and then go look for a problem to solve. I think that just doesn’t work in healthcare, and to achieve the biggest benefit you need to understand the patient and the multivariate stakeholders in healthcare.

Access to diverse patient populations enabled through digital health also alleviate the long-standing problem of data bias. Data sets become much more representative of true patient populations. Scalability and access go hand in hand with digital health. 

One should also not underestimate the time it takes to shape the market towards the adoption of digital health solutions. This can take years to accomplish. The reality is that changing healthcare will rely on crushing old pathways of thought for care delivery, patient engagement and costs, so it is likely the market needs to be shaped on multiple fronts.

Companies in seemingly disparate sectors also hold valuable lessons on how the healthcare industry can reach its holy grail of personalisation and precision. Take the video gaming industry for instance. As a leader in interactive entertainment, they provide a low cost platform for self-directed learning, self-expression, problems solving and social interactions. This same model of entertainment is being applied for the development of digital therapeutics in pain management and treatment of ADHD, anxiety, and depression. We have only scratched the surface here on what is possible. There simply is much more to healthcare than what treatments and disease management offer. I encourage gaming companies to think how they can adapt their solutions towards education, sustained engagement, care navigation and empowerment in healthcare.

Dr Ramin Rafiei

Dr Ramin Rafiei is a senior healthcare executive and entrepreneur in digital transformation and innovation. As a pioneer in integrated digital medicines for biologic/biosimilar therapeutics, Ramin works with biopharma and biotech companies globally to drive digital health innovations across their drug pipelines. His latest venture Valeo leverages a therapy-specific portfolio model to reduce risks associated with adoption of digital health solutions across the biopharmaceutical value chain.

Ph.D. trained in nuclear physics at The Australian National University, Ramin was fast-tracked for appointment to associate professor (photonics) at The University of Western Australia.

Ramin now applies his rigorous scientific training cross-discipline to healthcare in big data, artificial intelligence, machine learning, measurement science and novel sensing. A prolific writer, and inspirational speaker, Ramin covers issues in digital transformation, digital healthcare, digital medicines, autonomous mobility, photonics, nuclear science, nuclear physics, novel sensing, and measurement.

Ramin serves as a chairperson and board member for US-based Health and Technology companies specialising in medical devices, health services, healthcare analytics, education, and high-tech manufacturing.

As a faculty member and program advisor for UC San Diego Extension’s Department of Healthcare Research and Policy, Ramin guides the design, development, and delivery of its Digital Health Specialised Certificate. His “Digital Health Business and Commercialisation Strategies” course was recognised among the best of UCSD Extension for 2020.