RJ Lewis (EHS): Hello, this is RJ Lewis from Pharma Marketing Network. I’ll be your host today. And I am very excited to have with us, Ritesh Patel. Ritesh sure most of you know him already. He’s known industry-wide. He’s the Chief Digital Officer for Health at Ogilvy. And he’s also a Pharma Marketing Network Editorial Advisory Board member. So welcome Ritesh.
Ritesh Patel (OGILVY): RJ, Good morning. Thank you so much for having me on.
RJ Lewis (EHS): Excellent to have you. So I love talking to you because you’ve got your pulse on the finger of everything that’s happening digitally within healthcare, you always open my eyes to interesting things that are happening. So tell me about the latest happenings that you’re seeing in the world of healthcare and digital innovation.
Ritesh Patel (OGILVY): As I tell my kids “Dad has the coolest job on the planet.” So it’s because it’s hard work. And you know, we try and get a pulse on anything that’s going on that will impact our clients, obviously. So thanks for the kind words. And I’ll say, you know, it’s been very interesting over the last four years of following this, that we’re now seeing more and more the innovations really starting to hit the enterprise. You know, it’s sort of four years ago started with consumers, you know, wearables was a big thing, consumers were going to track everything, etc. But now we’re seeing innovations hitting the enterprise, we’re seeing more and more big corporations, particularly our client’s base pharma and hospital systems, looking at new things that are happening that will truly help them transform their business. So it’s an exciting time to be I think, in this industry, and looking at what’s going on with all the people that are trying to either disrupted or innovate within it.
RJ Lewis (EHS): A lot of disruption happening for sure I’m a big fan of kind of following the money in these things because at the end of the day where the investment is going, is often going to be the next trend that emerges. What are you seeing in the way of investments in these various areas?
Ritesh Patel (OGILVY): So, you know, it’s been really interesting as the growth of investment goes into this market, and I really focus really on digital health. So, from a digital health perspective, it is the guys who track these numbers and I track a couple of them PwC, Rock Health, etc. The numbers are looking at around in 2018 at the tail end of 2018, about $9 billion going from VCs into funding startups or mid-size deals. The size of the deal is also very interesting. It’s now going at North of about 30 million as the average size of a deal being funded. At the moment, it started off with, you know, five 8 10 million in 2011. And it’s gone up to about 30 million. So we’ve seen the deals are becoming larger. And the number of deals that are going up, sort of number of deals that are being done are also going up from a high of 300 in 2011, to about 800 deals in 2018. So, the market is definitely picking up we in terms of the number of people getting into it, the size of the deals that are being done. So proper business plans are being put together and proper planning is being done. And also, the amount of money that’s being poured into this and with north of $9 billion in 2019. I think that 2018, 2019 I will tell you, I think I’m looking at already 12 to 14 billion is my prediction for the end of 2019 would north of probably 1000 deals going through with a couple of exits as well. So, all looking really interesting. And good for people who are looking to get into this business.
RJ Lewis (EHS): That is that is interesting. So it sounds like the seeds that were planted some four or five years ago went through probably a series A with $30 billion or $30 million average deal sizes. That sounds like we’re hitting Series B or C on some of these companies. We haven’t seen a ton of exits in the digital space, which always in the digital healthcare space, which always kind of fascinates me, but it does indicate that these companies based on the investment size, are becoming more mature. And therefore they’re probably likely to hit an inflection point and really start disrupting other businesses. So what areas are you seeing that are being disrupted by some of these companies?
Ritesh Patel (OGILVY): It started out as you know, way back in 2011 12, around the consumer and everybody was chasing the consumer, the wearables and the whole quantified health business was really booming, and that’s where the bulk of the money was going. Now all we’re saying, particularly last year, is a lot of money going into business. So Artificial Intelligence where it involves R&D, particularly, you’re seeing a tremendous uptick. And it’s the first time I’m seeing our friends on the clinical side of the business out innovating the commercial side of the business in pharma. Novartis, Boehringer, Pfizer are all on the clinical side really chasing the innovations around R&D. Using AI primarily, we’re seeing people like Cloud Pharma, In-Silico, providing platforms for really scaling R&D, but also reducing the time so huge amount of money being put into, can I use AI and machines to really change the way we discover and we do drug discovery and reduce the time scale the model look for, you know, instead of looking at 200 scientists around the world, looking at a particular molecule. Let’s just put the molecule into a machine, let’s get the machine to figure out what the best pathway is. And that reduces a time of drug discovery from 10 years to five years. And you can imagine the arbitrage there, but also the amount of money that can be brought into the organization. The other area that we’re seeing a huge amount of money going into is devices, connected devices. So you know, the well talks of this world, doing things with well pass. You’ve got pair therapeutics, people like that, really looking at can reconnect things up and change the way people collect the data. The big one was ResMed Acquiring Propeller Health, I mean, Propeller, I think they went from somewhere north of $200 million. So there was an exit from an acquisition perspective, you’re seeing that in the third area we’re seeing is in telehealth and telemedicine. How can we do something Where we go direct, so we’ve seen the launch of consumer products. Most recently, telemedicine and specialty pharmacy connected together to create a product that a consumer can get directly. So, this boxification of things. We’ve seen it on the consumer side with things like Birchbox and Blue Apron. we’re now seeing it on the healthcare side with Roman, Hymns that are really starting to put a box together for you based on the Harry’s Model of Dollar Shave Club and things like that. Where you can get ED medication, hair loss, medication, that sort of thing, all packaged together. You go online, you talk to a doctor via telemedicine, and a specialty pharmacy then delivers it for you. So those are the three areas that we’re seeing a bit of disruption going on.
RJ Lewis (EHS): Very, very interesting. You mentioned you started that disruption conversation with a couple of big names like GSK, Pfizer, Novartis the kind of traditional incumbents. Steve Jobs famously said when they moved from the iPod to the iPhone, he said we have to disrupt ourselves or otherwise someone else will do it. Do you think that that’s happening within pharma now? Where is the true disruption going to happen within pharma? Or the second part of that answer where you talked about all the startups who are aiming for disruption as well.
Ritesh Patel (OGILVY): We’re not seeing Pharma looking at disrupting itself. What we’re seeing is Pharma looking and experimenting as to how they can do some of the things these startups are doing. There are people within pharma who are now looking at Digital therapeutics as a standalone business as opposed to what used to be the case which is service beyond the pill as it was known, you know, how can I create something digitally to augment the pill that I’m manufacturing? Where people are now going is there are divisions and departments being created within pharma particularly the Top 5, then we’re looking at Digital therapeutics as a standalone business. And I think that’s the first steppingstone into really disrupting ourselves, is can we really make this work? There are people who are doing it outside of pharma, particularly, you know, the pair therapeutics of this, of this marketplace, who have gone into the digital therapeutic business. We’re seeing big companies getting into it, Philips, Samsung, there’s a company called Ergo, based in France, which is a $30 billion Corporation that’s now getting into the digital therapeutics business, around migraine, for example. So Pharma is doing that we’re seeing at, you know, places like Novartis, Boehringer, where they’ve created experiments internally to say, can we disrupt, but I think pharma, particularly on the commercial side, is a long way away. Where I think they are looking at disruption more broadly and intelligently is on the clinical side, the clinical guys have figured out that there are places where they can create digital partner ecosystems to truly disrupt the way they do discovery. R&D, particularly really early on r&d, and that’s what we’ve seen.
RJ Lewis (EHS): And that’s happening more through a partnership with external bodies, or kind of internal disruption. I know one of the things pharma has done in the past, you know, four or five years is that many of them are making at least earlier stage investments or they’ve created innovation labs or VC arms. Do you think that’s with the aim of stringing together this ecosystem for purchase at some point, or do you think this is more about a partnership in the long run?
Ritesh Patel (OGILVY): Its partnership, you know, there’s two pieces here. You mentioned that most of them have set up venture funds, whatever. Those things have always stayed in the licensing side of the business, that business that either went and acquired a molecule or licensed to molecule. Those venture funds are continuing that modus operandi. They’re partnering and going out there and looking at ways to acquire new products or services. What we’re seeing on the innovation side, or particularly in R&D, is how can I use these new technologies or toolsets that are being created by the startups and change the way I actually do R&D? or change the way I do clinical trials or change the way I actually do clinical recruitment? You know, for example, there’s a company called Deep 6 AI-based in Pasadena, California, we’ve been following them and working with them for two years. Pharma bounced around with this company for at least a year, you know, with a number of players looking at potentially acquiring them and nothing happened. What they’ve done is they’ve gone in and installed themselves into academic medical centers. Now to get somebody into a clinical trial. You let the machine go find the right patients. The normal way of doing it is, a doctor looks at the client, the clinical trial protocol, and then has to match it with the chart note of the patient, and then figure out whether the patient’s eligible, that takes about 45 minutes. That’s why we don’t see many people being referred into clinical trials. You put a Deep 6 AI machine into the ER EMR system of an academic medical center or any actually hospital. You put in the trial protocol into the machine, the machine goes out at scale and looks at every unstructured, instructed by the data in the electronic medical record, and brings back the patients that match the actual protocol exactly as it’s defined. That takes minutes, not days or months, minutes. And that’s the deflection that’s going on. And finally pharmas finding these guys out and partnering with them. Where 18 months ago, everybody was looking at potentially acquiring them.
RJ Lewis (EHS): That is amazing. You think they would do extremely well if they can solve that clinical trial recruitment challenge. We’re going to take a moment Ritesh and we’re going to hear from our sponsor, and we will be back in just a minute with Ritesh Patel.
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RJ Lewis (EHS): Okay, we’re back with Ritesh. Ritesh, you talked a moment ago about AI and using it for clinical trial recruitment. I know AI is being deployed in a lot of other areas as well. What other technologies or tool sets are you seeing that are getting used today?
Ritesh Patel (OGILVY): So on the, you know, on the patient, education patient assistance side, we are now starting to see the advent of both the voice and the Bots-AI-NLP environment that’s looking at ways of connecting with either the patient and I would submit the better use case is providing capabilities to the ATP that most commercial organizations are not really taking advantage of. We’re seeing it with startups, there’s a company called Woebot, which started as a Facebook Messenger Bot. They really changed the way you get access to 24/7 Psychiatrists, go try it out. I’ve been interacting with Woebot for the last, I think 20 days to see if I can break it and I’ve not been able to do it so far. It’s a very very good Chatbot that has a very good AI infrastructure on the back end. So we’re seeing the advent of Bots, AI and Natural Language Processing coming through. We’re also seeing the advent of Voice, particularly around Voice Search, but also around using voice as a way of providing service. One of our hospital clients has implemented Amazon echoes in all of their hospital rooms and got rid of all the phones and the buttons, so now the patient interacts with the voice module that’s sitting on the wall. But the nurse does the same thing as she interacts, so he or she will interact with the voice bot and say, Hey, this room needs servicing or this room needs new cleanings or this room needs an EKG unit. And the voice-activated system then takes over. So the combination of voice, bot, and AI is really starting to take off and I’d like to see more and more of our pharma clients, particularly on the commercial side take advantage of it. Can you imagine giving a bot as a way of getting access to instant information rather than planning three $400,000 in any detail.
RJ Lewis (EHS): It’s incredible. When you talk about voice, it’s hard to not think about Amazon and then you also think about their later moved into pill pack purchasing pill pack. What do you advise clients of today, when you talk about Amazon and kind of their long-term play in the pharma space?
Ritesh Patel (OGILVY): The three major players that are looking at this Amazon is actually taking the lead, obviously, with all of the stuff that they’ve been doing with haven. But if you look at where they’re going, there are three areas, right? One is around data. That’s Amazon’s real sweet spot. How do I use data to do things? You know, I’ve seen and heard legends and rumors and I’ve seen some, once a while I’ve seen them examples of screenshots of an Amazon Electronic Health Record System that they want to launch. connect that with pill pack and supply chain and attach that to the largest employer out there between Berkshire, Amazon, and JP Morgan, and you’ve been able to now also take on the PBMs, right? So all of a sudden, you’ve got the capability of creating an Electronic Health Record System that connects directly to a supply chain system that has a PBM attached to it, and the capability of providing prescriptions in all 50 States and delivering in those States. And you’ve got a pretty robust distribution system. haven’t seen anything whether going into pharma in any way or going into actually creating medications. It looks like where they’re going is taking advantage of their capability around data infrastructure supply chain, and really disrupting the PBM model. I think that’s where they’ll go first, the guys to look out for is Apple more than Amazon. Well, Apple is got the technology. If you’re looking at the consumer space, the biggest example or in the clinical space, actually more than anything else. Look at what Mayo did recently with enrolling 40,000 patients into a heart trial in a matter of months. A CRO today will charge millions of dollars to get 40,000 people into clinical trial, Apple with the Apple Watch, we’re able to get that done in months, right? They’ve got the infrastructure, they’ve got a wearable, they’ve got HealthKit, ResearchKit, and CareKit, as the pipes that are on the phones and the iPads. And they’ve got the capability to reach millions of people who’ve got their devices in their hands or on their wrists.
RJ Lewis (EHS): Now it’s interesting, you starting to see a little bit of a divergence among the big players were big tech players. That is where like you said Amazon’s more about the data and the distribution going after kind of more of the PBM market Apple more in the device side of things, devices where they’ve always played and then you’ve got Google over there who probably is focused a little bit more on actually creating health innovation with Verily and some of the other things that they’ve invested in.
Ritesh Patel (OGILVY): So definitely going after the innovation space, you know, their culture, and this whole, you know, make everything go 10x better is where it’s at. You know, we’re both very early and what they the acquisition of Lift Labs, if you look at Lift Labs products, those are highly innovative products that are being brought to market, the Parkinson spoon being one of them. You know what, what you can do with the innovation capability and funding that Google has is where the disruption I think will occur.
RJ Lewis (EHS): Interesting. What do you see from a trend perspective, kind of both in the short term 2019 type of trends and then into next year and even beyond what are the most immediate things that you kind of see and say this is hitting an inflection point where it’s really just going to start to run?
Ritesh Patel (OGILVY): Yeah, and you know, my in my role I only focus on so the next 18 to 24 months. If I could do more than that I’d probably be living on a beach in Jamaica. After I’d invested a few things, so over the next 18 months, I would say, AI for sure. It’s going to be everywhere people are trying to figure it out and I think you’ll see the startings the beginnings this year, of how do we apply it at scale on the commercial side of the business? I’ve seen a couple of startups looking at it from an advertising perspective, right? Can I reach people with more intelligence? If they’re doing something online, Can I use AI to figure out what they’re doing and serve up the next ad unit or the next, you know, message to them in a way that’s rare, more relevant contextually. We’re seeing AI being deployed everywhere on the R&D side and that totally makes sense. And you’ll see more and more disruption coming there in the reduction of molecular discovery, in the application of AI on data and using data to really change the way we’re looking at to what medicines we bring to market and I think that’ll change the way that we’ll drop, the time that’s evolved in. If you look at using AI, like Deep 6 to do clinical trial recruitment, you now changing the entire way we can get patients into trial. Everything is speeding up there. So we may be bringing medicines to market faster, five years, six years rather than 10 12 14 years, which will change the economic model completely. And bots, machine learning, natural language processing, and voice are the big ones on the commercial side. But also on the disruption side, we’ve seen the application of those technologies in changing the way people interact with things. I’ve mentioned Woebot there are four or five others like HealthTap, Babylon, ADA, that are literally changing the way consumers take control of their health. ADA based out of Berlin has taken five years to teach their machines, I think I think maybe 30 or 50 different maladies that they can actually have a patient then get diagnosed with. Babylon is doing the same thing; they are really focused on disrupting the delivery of care business. I don’t need you to go to a building, I can get you a doctor using my machine and a telemedicine unit and then send you a prescription. So they’re looking at changing the delivery model from you going to buildings to you doing it in the comfort of your own home. A Health app is doing the same thing with hospital systems and providing their capability as is Buoy Health, which is doing it with voice and chat. They’ve got a really interesting product that they just launched at Boston Children’s Hospital for pediatrics. So we’re using AI, Machines, and Voice and connecting it all together for delivery of care. Those are the two areas I see big disruptions coming this year.
RJ Lewis (EHS): Wow. That’s a lot to keep up with and a lot to digest.
Ritesh Patel (OGILVY): Yeah.
RJ Lewis (EHS): So Ritesh, the listeners to the Pharma Marketing Network fall into three broad buckets. We have a lot of pharma people from C level through the pharma marketers. We have a lot of support people, consultants, agencies, vendors, and then we even have some coverage in hospitals, and physicians are the healthcare market, health care provider market. What advice would you give to those three constituents pharma, the support of pharma, and the provider?
Ritesh Patel (OGILVY): For the pharma folks, I would say there are two areas I think, you know, on the commercial side particularly, they need to start speeding up disrupting themselves, and not rely on what I call the same old bullets to do what they’ve always been doing, which is, you know, on the marketing side, it’s print TV, digital media, and websites. That’s done. You need to really rethink your marketing model going forward and start looking at spending your money wisely in some of these new technologies and for God’s sake experiment, not pilots. I’m not talking pilots, I’m talking about true experiments, launch something in the market with the proper guardrails and see what happens. And try it. Your jobs not on the line, take $10,000, $50,000 from a $200,000, Brand.com vanity site, and put it into some of these new things that are going on and experiment them. Don’t pilot things. Pilots never work, but go do a true experiment 90 days, what can I do in 90 days and go try it, find a startup that can help you, partner. For the C-suite guys, I would say start creating a digital therapeutics group that’s going to look at the digital therapeutic business and figure out a way to partner with a bunch of startups that can help you get there. Even if it’s just an experiment, don’t be afraid, go put the guardrails and do it because if you don’t do it, there’s $10-$12 billion out there in the market that’s funding people who are going to do it to you. So start looking at that. You’re already way ahead on the clinical side, I’ve got you know, I haven’t got too much on the clinical side. It’s the first time in my 10 year career of pharma that I’m seeing the clinical folks advancing in this area over the commercial guys, which is very interesting to see from a culture because they’re the guys always been, you know, very conservative. On the partners and consultants start paying attention to this area. There are one or two nuggets you’ll always find that you can bring to your clients that will enable your clients to change the way they do business, whether it’s on the clinical side, the commercial side on the patient side programs, whatever it is, you know, if you look at Patient Support, for example, enormous amount of money goes into building these Patient Support websites, call centers of three 400 people where you can truly disrupt it by creating and using these new bot voice AI technologies to change the way your clients interact with their customers. On the healthcare delivery system side, start looking at creating partner ecosystems. look at ways you can take advantage of some of the things that are going on in in the US in Cambridge, in Massachusetts, in Palo Alto and Mountain View in Louisville, Kentucky, in Nashville, where startups are coming up and cropping up Nashville, particularly because it’s the backyard of] Hospital Corporation of America. You’re seeing a lot of health system startups prop cropping up, looking at changing the ways they can disrupt the hospital. Same thing is happening with the National Health Service in the UK. Go figure out what the NHS is doing, they literally took their entire delivery of care journey, looked at places where there was real stress in the system and they started to go find startups and creating challenges for them to fix that. Maybe that same model can apply here in the United States for you, where you create those ecosystems. So those would be my three pieces of advice for this year for them.
RJ Lewis (EHS): Excellent, great, great advice. I love advice that’s all about, Hey, take action. You know, don’t rest on your laurels, take action and do something. So I have to ask you this Ritesh because this was an amazing kind of stream of consciousness download of an incredible amount of observations. If you were to pick one thing that really makes you say, Wow, today, like what’s the what’s the one thing that you’ve either uncovered recently or it’s been on your radar for a little while now that really just makes you say, Wow, you have to check this thing out.
Ritesh Patel (OGILVY): I would say that wow, this week or this month, or at least the last quarter has been a company called butterfly networks. I met them maybe 16 months ago where they were in a prototype phase of a product that they’re bringing to market and they’ve now launched it. It’s a handheld ultrasound. Now think about this, and the ultrasound machine costs about $35,000 average. It’s in a hospital setting where you have to have a specific nurse that you have to then go down, so you know, you’re up in a bed on the third floor, somebody comes and get you. They reel you down to a basement area where there’s a nurse in a cold room with a machine that has to have a skill that has to then be applied, and then you wait and get taken back up to your room. These guys have come up with a similar device. That’s $2,000. That’s handheld that’s attached to your phone that you can use bedside.
RJ Lewis (EHS): That’s amazing.
Ritesh Patel (OGILVY): It is incredible.
Ritesh Patel (OGILVY): They’ve got a 10,000-person waiting list for this product. And they just launched it.
RJ Lewis (EHS): Who’s the buyer? The hospitals, the buyer?
Ritesh Patel (OGILVY): The buyers are actually doctors; the procurement guys are not buying it. So they went direct to consumers in their world which has directed nurses and doctors and they’ve got doctors and nurses buying it in droves for two grand a pop. Imagine, you can completely change the way you deliver care. But the outcome is amazing, right?
RJ Lewis (EHS): That is amazing. Well, Ritesh thank you so much for this awesome session of insights. And I think you can second it with your kids and tell them that you do indeed have the coolest job ever.
Ritesh Patel (OGILVY): Thanks, RJ. It’s great talking to you today and I hope this podcast is useful to the listeners who are going to listen to it.
RJ Lewis (EHS): Wonder wonderful and Ogilvy is basically helping clients to ask and answer the question, how are you really going to innovate? How are you going to select the right people and partners to do so? And how do you build the right culture and environment to encourage that innovation to happen?
Ritesh Patel (OGILVY): That’s exactly it.
RJ Lewis (EHS): Which is a great place to be right now. Where can listeners go to find out more information about you and your company?
Ritesh Patel (OGILVY): So you can go to ogilvyconsulting.com. That’s the sub-brand that we have under Ogilvy where we do all this work, and that’s where you’ll be able to find out all about what we do and also get in touch with me if you need to.
RJ Lewis (EHS): Terrific. Thanks so much, Ritesh. Great speaking to you as always.
Ritesh Patel (OGILVY): RJ, Thank you. It’s a pleasure.
Listen to this podcast, Ep. 003 – Ritesh Patel here: https://www.pharma-mkting.com/the-pharma-marketing-podcast/