• 82% of life sciences and healthcare start-ups offer improved affordability, accessibility and efficiency in their products and services leveraging emerging technology : EY survey
• 18% of life sciences and healthcare start-ups have unique products and services
• The key challenge for life sciences and healthcare start-ups is receiving funding, followed by lack of understanding of regulatory processes and difficulty in collaborating with bigger life sciences players
• Owing to challenges in partnering with bigger companies, 71% of the start-ups mentioned that they have collaborated with comparatively smaller or mid-size companies with revenues <INR 100 crores
Hyderabad, India, February 26, 2019 : EY, the leading global professional services organisation, today announced the launch of the report ‘Life Sciences 4.0 : transforming health care in India’ at BioAsia 2019, Hyderabad. The report highlights how technology is disrupting the health care ecosystem in India as we are entering the Fourth Industrial Revolution (Industry 4.0).
The report states that the Indian health care system is being reshaped by three forces: increasing health care demand, technological ubiquity and rising patient awareness. Rising prevalence of lifestyle related diseases and an aging population are the major factors leading to increasing demand of specialised health care in India. However, the Indian health care system currently lacks sufficient infrastructure to meet the health care demands of the country.
This lack of sufficient health care infrastructure has led to a supply-demand imbalance in the country making health care less affordable and accessible for all. While a steep supply-demand imbalance is visible in the country, India at the same time is also one of the fastest technology adopters, globally. Therefore, technological ubiquity and adoption of emerging technologies and tools by health care stakeholders have the potential to offer realistic solutions to meet increasing demand by improving affordability and accessibility. While the health care industry in the country has started showing early signs of disruption, it is critical that the life sciences companies get ready to lead the change.
Indian life sciences companies have started taking small, experimental steps on their 4.0 journey. Some of the key areas where the companies have started adopting digital technologies include patient engagement (tools/services for increasing patient awareness about disease/health), physician engagement (tools/services for sharing educational material; interactive portals to connect, etc.), field force effectiveness (technology interfaces such as tabs for e-detailing and easy day-to-day reporting; smart mobile apps for appointment bookings), R&D efficiency (clinical trial data management solutions; technology and data to improve R&D productivity), and supply chain management (use of software to streamline supply and demand and connect buyers to sellers quickly). While the Indian life sciences players are making multiple investments, the activity is fragmented across the value chain and the efforts do not go far enough to reap greater benefits.
There are broadly four business models that can describe majority of the Indian life sciences companies. Each of these types of companies need to invest into building capabilities dependent on their chosen business models.
- Efficient producers : Developers of generics or low-cost products that perform as well as the competition would need capabilities to bring efficiency and transparency to their manufacturing and supply chains using technologies such as predictive analytics, blockchain, automation, etc
- Breakthrough innovators : Developers of best-in-class products that command high prices would need capabilities to improve efficiency in drug discovery and the clinical trial process and generate real world data using artificial intelligence, remote monitoring systems, etc.
- Disease managers : Developer of products and solutions to manage chronic conditions end to end need to develop capabilities to gain a personalized understanding of patient behaviors and thereby provide customized solutions that improve drug adherence and the patient experience.
- Lifestyle managers : Like disease managers, they will need to develop capabilities to drive behavior change. A key differentiator will be the ability to keep consumers engaged by using algorithms to anticipate their needs and provide the required solutions proactively.
Sriram Shrinivasan, Global Emerging Markets Health and Life Sciences Leader and National Health Services Sector Leader, EY says, “Today, in India and globally, technological advancements are redefining products and enabling customization of services in the health care industry. Emerging technologies (e.g., robotics, blockchain, 3D printing and artificial intelligence) and scientific breakthroughs such as gene editing have led to the transformation of life sciences companies’ business models. Going forward, life sciences companies must invest in the three new capabilities: personalization, customer engagement and data literacy.”
Along with creating opportunities for the big and established life sciences players, the shifting consumer preferences and the technological revolution are also creating newer avenues for start-ups globally as well as in India. EY conducted a survey with 60 life sciences and healthcare start-ups in India to gauge the success factors, challenges, collaboration landscape, growth areas for start-ups and their digital maturity.
35% of start-ups highlighted that taking feedback from customers (patients and physicians) was one of the most important success factors, followed by focus on product innovation, and industrial and technical know-how of the resources. 42% of the respondents feel that receiving timely and substantial funding will provide opportunity for driving further business growth, while 38% felt product innovation and rising market potential due to rising incomes, health and technological awareness also have a key role to play. 23% of the respondents also pointed towards strong government support as a responsible factor for attaining the next level of business growth.
“Digital health care is one of the key focus areas under the umbrella of the government’s digital initiatives. The Ministry of Health and Family Welfare has several initiatives designed to deliver better health outcomes and the ‘Ayushman Bharat’ program is another initiative towards ensuring better access, improved quality and affordable health care to the citizens of India,” added Sriram Shrinivasan.
In terms of business challenges, the start-ups are facing, 35% mentioned receiving funding was the key challenge, followed by understanding of regulatory process and collaboration with bigger life sciences and healthcare companies. The lack of sufficient funding was evident from the fact that 43% percent of the respondents were bootstrapped while 42% are also leveraging government incubators. Further, the difficulty in getting into collaborations is also visible from the very low percentage (5%) of companies with more than 10 collaborations while majority (69%) have 0 to only 3 collaborations.
With the changing pace of acceleration, life sciences companies, whether big or small need to invest in platform capabilities to capture future value, regardless of their business models. They must lay down an effective strategy to build a workplace of future and while doing so must align their talent and digital strategy with the overall organisational vision.