FREMONT, CA: The Life Sciences sector, which includes the pharmaceutical, medical technology and biotechnology segments, had remained unscathed by the global economic recession. Those good ol’ days seem to be ending as the sector is now going through a crisis due to the invasion of tech companies, like Google. But for leading pharma players, this invasion could turn out to be the much awaited stroke of good fortune.
In August, Google announced plans to reorganize the company and also the launch of a life sciences firm to develop new healthcare technology. Google ventured into the healthcare sector with Google Health, a personal health record service, back in 2008 but the project was abandoned after just three years in 2011. Despite all the attention, the service never really took off due to the lack of provider relationships and communication features that patients look for when dealing with their health information electronically. In 2013, Google made its next move into the healthcare sector with Calico, a research and development company, whose objective is to devise interventions that enable people to lead longer and healthier lives. Google has made its ambitions in the healthcare sector clear, with the launch of two more projects- Diabetes SmartLens and the Baseline Study, which have just gone from concept to reality.
Thus, the pharmaceutical industry has reached a turning point where they are facing rigorous competitions from new players from the tech industry such as Google, Microsoft HealthVault, Apple HealthBook, etc. In this context, the million dollar question for pharma companies is whether to collaborate with these Goliaths of the tech industry or rethink their business models and adopt a more personalized approach to medicine. But on close examination, teaming up with tech players from outside the life sciences field, could initiate much needed disruptive innovation.
Through collaboration, pharma giants could utilize the proficiency of gathering and processing mammoth amounts of health allied data, from say a company like Google, thereby figuring out complex diseases. Moreover, from the patients’ viewpoint, partnership between tech companies and recognized pharma companies with years of experience in various medical fields, can reduce healthcare costs as well as develop innovative treatments.
Partnership between healthcare giants and tech companies may seem strange initially, nevertheless, significant developments have been taking place in the field. In July 2014, Alcon, the eye care division of Novartis entered into a licensing deal with Google’s SmartLens technology focusing on products for optical correction and health monitoring in patients with diabetes. A few months later Google announced a 1.5 billion dollar partnership with AbbVie to develop and market new drugs targeting diseases associated with old age. The collaboration between pharma and tech companies can dispense a healthcare system that benefits the provider and the payer. These partnerships look very promising indeed, but the challenge is to sustain them.