By: Michael Esquivel
Recently, the Pew Internet & American Life Project (the
“Pew
Internet Report”) reported that nearly 70% of Americans are monitoring one
or more health metrics for themselves or a loved one, but only 21% of those are
using a technology tool to help them keep track.
Furthermore, of those who are using technology to track health metrics, only 7% are using apps or other tools on a mobile device. In contrast, half of the respondents indicated that they track health metrics “in their head,” and another 34% said they track health data on paper.
I recently had a conversation with Pam Dolan at American Medical News about the Pew Internet Report. She covered the findings in a story titled, “Has mobile health monitoring hit a wall?” Despite the title’s implication, what I conveyed to her is my strong sense of optimism in looking at these numbers. When you realize that 70% of people in the U.S. are currently tracking data related to their health and that only a small percentage of that group are using technology to help, the potential for growth is both tremendous and clear. What’s surprising is that most commentaries on the report have characterized the findings as proof that the digital health market has plateaued.
People are buying and using digital health devices and apps in record numbers. The concern is that once the novelty wears off users lose interest and, consequently, engagement wanes. This concern in turn has led to a huge focus on providing actionable and meaningful data that actually improves your health.
As Jack Young of Qualcomm Life Fund has commented, the perfect mobile health device is a bathroom scale that records your weight and transmits the information to your computer where it is tracked over time. It’s passive, usable, actionable, and doesn’t require the user to change their routine.
The take away of the Pew Internet Report is not that Americans’ interest in using digital and mobile tools to track health metrics has plateaued, but rather that we are only beginning to learn how to develop the right technologies that will empower us to more actively engage with our health.
By: Michael Esquivel
The New York Times’ health and science blog, Well,
recently published a post discussing the results of an informal quest to find
the price of a hip transplant. The
post received widespread attention and commentary because of its
unfortunate results: it was nearly impossible to get a price quote, and the
price quotes that were obtained varied by a factor of 10 and bore no
relationship to either the reputational quality of the healthcare provider or
the quality of the surgical services to be provided. Some of the most well-regarded
hospitals quoted some of the most reasonable prices, while some less highly
regarded hospitals quoted very high prices. The bottom line: there is currently
little price transparency or rationality in the healthcare system. As a result,
there is no 'market' in healthcare, yet.
Fortunately there are startups that are seeking to address this lack of transparency. Castlight Health, a Fenwick & West client, is a leader in this emerging space. Some insurers, moreover, are also trying to cut through the pricing opacity. The Arizona Republic recently reported that some insurers, as well as the federal government, are beginning to provide pricing information through web-based tools.
Irrespective of how we get there, price transparency—leading to price rationality—has the potential to jumpstart the transformation of healthcare. Price transparency, in addition to potentially lowering cost, also has the potential to spur behavioral change. Once individual consumers understand the true cost of healthcare, and that they are—one way or another—paying for it, they may become more active in their pursuit of wellness.
And it is becoming easier to pursue active wellness today than ever before. Hundreds of new devices and apps allow individuals to monitor various aspects of their health condition, which has in turn powered the quantified self movement. For now, quantified self is mostly about understanding one's activity level (or lack thereof) and basic biosigns such as heart rate, blood pressure, blood glucose and so forth. But eventually it has the potential to lead to individual empowerment on a molecular level. Spotting a dangerous biomarker before physical symptoms manifest could potentially lead to early detection of serious illnesses, and consequently early intervention. Early detection and intervention leads to better outcomes, which further reduces cost—a beneficial loop for individuals and healthcare as a whole.
By: Michael Esquivel
The question of whether or not smartphone apps can play an important role in the delivery of healthcare services has been more or less answered with a resounding yes. From weight loss to diabetes monitoring to diagnosing ear infections, successful digital health models and pilot programs have provided compelling proof of concept that there is potential to improve users’ well being and health through the use of these apps.
The remaining questions are: who will pay for these apps, and how will the developers make money? For now, the partial answer is that individual patients and consumers are the buyers of these mobile health apps. In today’s healthcare market, consumers do not typically pay directly for products or services; nor do they usually pay for 100% of the actual cost. Those expenses are borne by payers, a combination of private insurance providers, public insurers (e.g., Medicare and Medicaid), and employers who either pay a significant portion of the cost of private healthcare insurance for their employees or are self-insured.
By: Michael Esquivel
According to a recent report
released by Rock Health, Big Data has the potential to save the healthcare
system more than $300 billion per year by improving poorly coordinated care,
reducing fraud and abuse, and improving administrative and clinical efficiency.
Big Data refers to the insights that organizations—in this case providers,
payers, and drug and device development companies—can gain from analysis of
growing sources of structured and unstructured data from electronic medical
records, sensors, and smart phones. Collecting and analyzing the vast amount of
data currently available provides the opportunity to identify trends or
patterns to improve quality and lower the cost of care. Big Data applications
(apps), for example, could identify leading causes of hospital-acquired
infections or readmissions, which could lead to better preventative measures while
lowering the cost of care.
Continue reading "Big Data Could Save Healthcare System $300+ Billion Annually" »
By: Michael Esquivel
The Federal
Trade Commission (FTC or Commission) recently published a guide, Marketing
your Mobile App: Get it Right From the Start, to help mobile app developers understand
FTC advertising and privacy rules. The publication follows agency actions
against two mobile app developers regarding information collection and product claims.
In one such agency action, an app developer paid $50,000 to
settle FTC charges that
it failed to require parental notice and consent before collecting and
disclosing children’s personal information.
A second developer settled with the Commission after claiming without
proper substantiation that its mobile app treated acne. Advertising claims and
privacy issues both have special importance for digital health and mobile
health developers because of heightened advertising and privacy concerns for
products that make health or safety claims or collect medical information.
For marketing and advertising, the FTC focuses on the truthfulness of claims and proper disclosure of the information. Specifically, in advertising their product, app developers should have solid proof of objective claims about what the app can do. The FTC advises additional caution when marketing apps that have health or safety benefits. Such claims may require what the FTC calls competent and reliable scientific evidence. Precisely what constitutes competent and reliable scientific evidence has been subject to some interpretation. In the past, the FTC defined acceptable scientific evidence as "tests, analyses, research, studies, or other evidence based upon the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results” [Brakeguard Products, Inc., 125 F.T.C. 138 (1998)]. For most companies, including app developers, this may mean referencing existing scientific data or studies to substantiate claims about health or safety benefits of a product.
Continue reading "“Clear and Conspicuous” FTC Guidance on Marketing Mobile Apps" »
By: Michael Shuster
On October 5, the United States Supreme Court agreed to review the case Bowman v. Monsanto Co., Docket No. 11-796 (USSC 2012). The high court will be taking on the question of patent exhaustion in seeds, specifically Monsanto's "Roundup Ready" seeds. Monsanto sells the seeds, which grow into plants resistant to the herbicide glyphosate, aka Roundup. Bloomberg coverage of the case highlights the legal issues surrounding the conditional sale exemption, a doctrine adopted by the Federal Circuit, allowing patent holders to enforce their rights against buyers downstream.
We don't have the briefs yet, or for that matter the amici briefs which will no doubt be plentiful and fascinating, but we can gather from the questions presented by the parties in favor of and opposition to the writ that this could well be a seminal patent case (apologies for the pun). Law professor, Dennis Crouch, covers the latest developments in the case on the Patently-O blog.
Bowman argues that he is entitled to the patent exhaustion doctrine. That is to say that after the original authorized sale of the seeds Monsanto's patent rights are extinguished, which is how the patent exhaustion works in most other products. Of course as a practical matter this means that a farmer needs to buy Monsanto's seeds only once, because every subsequent generation of seeds germinated from the plants sprouting from the originals are free and unencumbered by the patent rights that belong to the original generation. Bowman asks the Supreme Court to find that the Federal Circuit erred when it created, in Bowman's view, "an exception to the doctrine of patent exhaustion for self-replicating technologies."
Monsanto argues that it owns patent rights in a genetically modified plant, and the fact that it is a self-replicating living organism is irrelevant because the patent rights "are independently applicable to each generation of soybeans embodying the invention, such that a grower who, without authorization from Monsanto, creates a new generation of genetically modified soybeans infringes Monsanto's patents."
It is never a good idea to attempt to predict a Supreme Court outcome, especially before the briefs have even been filed, but given the Court's recent track record on life science patents this may not yield a good outcome for Monsanto.
By: Matthew Rossiter
Times are tough in the life
science financing environment, as underscored by numerous
recent news stories as well as quarterly statistics from Dow
Jones VentureSource and The
MoneyTree Report.
However, Fenwick’s First Half 2012 Life Science Venture Capital Survey highlights a few potential bright spots as well. In particular, while the number of life science financings declined significantly during the first half of 2012, our survey indicates that valuations have improved modestly, and we also see evidence that large biopharma and medical device companies are increasing their support of startup ventures.
Fenwick’s latest survey analyzes venture financings for 186 U.S.-based life science companies over the first half of 2012. One metric used to assess the health of the life science funding environment is to look at the change in share price from one round of funding to the next. In 2012, the trend has been positive, with average price increases of 19% and 26% for Q1 and Q2, in comparison to average price increases of 4% and 11% for Q1 and Q2 of 2011.
Another way to look at the data is to measure how many funding rounds occurred where the price per share increased (up rounds) or decreased (down rounds) from the previous round. For the first half of 2012, up rounds outpaced down rounds 53% to 19%, with 28% flat. This is a modest improvement over results from 2011, which averaged 47% up rounds and 25% down rounds, with 28% flat.
It is important to put these valuation trends in context: fewer life science financings are occurring, and the life science valuation figures trail those of other industries covered by our Silicon Valley Venture Capital Survey. However, the upward trend in valuations is an indication that startups are continuing to develop promising technologies that can justify a step up in valuation – in other words, there is a healthy supply of promising new ideas.
Likewise demand for new ideas with demonstrated potential, in the form of acquisitions of life science startups by large life science companies, also continues to be strong. A recent report from Silicon Valley Bank, as well as blog posts by Bruce Booth (Atlas Ventures) and Bijan Salehizadeh (NaviMed Capital), highlight the continuing strength of the current life science M&A market.
By: Michael Shuster
Two recent conflicting Federal Circuit cases (Classen
and Momenta) interpreting the Hatch-Waxman safe harbor provision (35 USC
271(e)(1)) have stirred debate in the biosimilars community. While the
new biosimilars pathway (the Biologics Price Competition and Innovation Act) is
different from Hatch-Waxman of course, and its interpretation by FDA is still
evolving, the controversy emanating from the recent cases is drawing concern.
The Biologics Price Competition and Innovation Act ("BPCIA") has not yet led to an approved biosimilar, but one may not be far off. The FDA has conducted meetings with potential biosimilar sponsors and INDs (investigational new drug applications) for biosimilars have been filed. FDA's draft guidelines set forth detailed standard for 'biosimilarity' which must be met by the follow-on product.
The recent Momenta v. Amphastar case has led some in the biosimilars community to ask how an experimental safe harbor might work in the biological drug context, where we would likely see far more complex and sophisticated (and thus likely patented) compliance testing than what is typically found in the small molecule context.
If the Momenta case gets extrapolated to the biosimilars context, then the hard (and likely expensive) work of the first biosimilar candidate to figure out a method of testing and characterizing his large molecule will be used, legally and without compensation, by other follow-on candidates in order to test their own candidate molecules. On the other hand, if the reasoning in Momenta is rejected by the Supreme Court (assuming they grant certiorari, which appears increasingly likely) then whichever biosimilar candidate can come up with (and patent) an effective means of characterizing large molecules for purposes of establishing biosimilarity sufficient to meet FDA's standards will likely become the de facto exclusive biosimilar competitor, as other competitors will be unable to satisfactorily characterize the biosimilarity of their candidate products without violating the patent.
Kevin Noonan, in the exceptional Patent Docs blog, has a comprehensive post on Judge Rader's dissent in Momenta. Judge Rader's various opinions on the topic of Hatch-Waxman safe harbor portend the problem of free-riding - "trespass" in the Judge's words - by competitor follow-on candidates, severely distorting incentives in the process.
We'll be looking for the Supreme Court to resolve the tension between Momenta and Classen and perhaps provide some guidance that can in turn be relied upon by the FDA.
By: Michael Esquivel
From the minute you stepped off the elevator at Rock
Health’s annual Health Innovation Summit on Tuesday, there was an undeniable energy.
The sold out event was jam-packed with entrepreneurs, investors and health and
technology innovators. An all-star line up of speakers consistently delivered
useful insights throughout the day. But first, Rock Health CEO Halle Tecco, led
off the day with some big
news.
Tecco announced a partnership that provides each startup joining Rock Health with a $100,000 investment from four high profile venture investors: Aberdare Ventures, Kleiner Perkins Caufield & Byers, Mayo Clinic, and Mohr Davidow Ventures. Leading off on a high note, the day continued as Intel founder Andy Grove delivered his keynote.
Grove set the stage for why Job 1 in digital health innovation must be to “Free the Data!” Ending his discussion with that proclamation met with enthusiastic applause from the audience. He also introduced the concept of M(ed)SRP or medical suggested retail price, making an analogy to the auto industry. Historically new car pricing moved from a system with markups and discounts varying significantly to one in which standardized pricing was established and openly disclosed. Grove sees that historical precedent as a path forward for medical services, creating greater price consistency and upfront disclosure.
Over the course of the day, two camps appeared to emerge – those who believe the time is right for massive, paradigm shifting innovation that comes from working outside of the existing healthcare infrastructure. As Vinod Khosla stated – innovation comes from the fringes - start there. Another camp, already established in healthcare, advocated for incremental changes that can be made from within the system and current regulatory framework. Though a dichotomy exists, I don't view these two paths forward as being at odds. Rather, both avenues can and should be explored in parallel.
