Smart collaborations to drive healthcare revolution
INTERNATIONAL law firm Simmons & Simmons has conducted a global survey to gain a better understanding of how digital health will shape the future of collaborations and investments in healthcare.
In Q418, the firm surveyed 441 decision makers and investors across the UK, the rest of Western Europe, North America, the Middle East and Asia-Pacific. Respondents worked for TMT companies, Healthcare and Life Sciences (HLS) companies and payors, or were active investors in the sector.
The convergence of digital technology and healthcare – digital health – has become a key driver of change for healthcare systems globally, with the mass adoption of digital technologies set to revolutionise healthcare and patient wellbeing.
Payors and HLS companies must learn from the mistakes made in other sectors – and find ways to become the disruptors, not the disrupted.
Responding to the digital health imperative
Eighty percent of respondents in the APAC region, versus 64% of respondents globally, said that digital health was a strategic priority and will offer huge cost savings (81% versus 62%) and transformation of patient care (83% versus 66%).
Seventy-eight percent of the respondents across the APAC region are planning to invest more in digital health over the next three years, compared to 63% of respondents planning such investments globally.
The power of collaborations
Collaborations are seen as vital to seizing digital health opportunities but, as the report suggests, only 34% (44% in APAC) of collaborations achieve their goals, so it is clear that these partnerships are not always a success.
The firm’s research shows that organisations not only struggle to find the right partners to work with, but also struggle to forge successful relationships. According to the survey, only 11% (14% in APAC) of collaboration and investment proposals that cross organisations’ desks ever enter detailed due diligence, and only 4% (6% in APAC) are executed.
The survey indicates that respondents in the APAC region see collaborations such as partnerships, joint ventures and alliances as the most effective means of unlocking digital health opportunities in the next 12 months.
Eighty-nine percent of respondents across the APAC region regarded such collaborations as important, followed by minority investments (81%) and M&A transactions (74%).
Damian Adams, corporate partner at Simmons & Simmons in Singapore added: “Currently, organisations and investors view collaborations with healthcare providers and established technology companies as key avenues to seize opportunities in the digital healthcare space. However, due to the rapid growth of technological innovation in the APAC region, start-ups are going to play an increasing role in the next few years.
“Patients in Asia have clear expectations that digital technology will disrupt healthcare. The innovation and disruption taking place in the healthcare industry presents an unprecedented opportunity for businesses to find new ways to secure long-term success and profitability.”
Seizing digital opportunities
The research shows that business leaders are exploring a range of options to embrace the opportunity created by digital health. Many are also thinking about how to enhance internal capabilities – whether by attracting staff with the right digital expertise or changing company policies or cultures.
While many elements contribute to ensuring companies are prepared for digital disruption, the firm’s report highlights, above all, the key challenges that must be overcome to execute successful collaborations and investments. Findings from the survey support the firm’s conclusions that addressing key questions in relation to regulatory matters, data protection and cyber-security, product liability, intellectual property, cultural issues (particularly where TMT and HLS companies collaborate) and structuring and governance is critical to the success of collaborations.
Anticipating these issues early will help deliver more successful collaborations and, more importantly, help companies survive the digital revolution and investors to secure healthy returns.
Jocelyn Ormond, corporate partner at Simmons & Simmons in the UK commented: “This report has provided some very interesting and sometimes surprising insights into digital health and the challenges and opportunities associated with collaborations and investments in this space.
“While historically two thirds of digital health collaborations have failed, well prepared organisations and investors will be in a good position to execute successful and transformative transactions.”
Michael Gavey, IP/regulatory partner in the UK added: “Our report highlights that cross-sector collaboration is driving the development and delivery of exciting new digital technologies which are challenging traditional business models and have the potential to transform healthcare globally.”