DIGITAL HEALTH BRIEFING: Amazon to sell medical devices, supplies - FDA approves device to help opioid addicts - Clinical wearables usage takes off
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AMAZON COULD SOON BEGIN SHIPPING MEDICAL DEVICES, SUPPLIES: Over the past year, Amazon obtained several wholesale pharmacy licenses in a number of US states, leading to speculation that the company may enter the pharmaceutical market. However, earlier this week, correspondence between the company and regulators in Tennessee and Indiana revealed that Amazon will not be using the licenses to sell and store prescription drugs, according to investment firm Jeffries. Instead, the company will likely begin shipping medical devices and supplies in its Indiana fulfillment center.
Shipping devices and supplies is the path of least resistance for Amazon as it dips its toes in the pharmaceutical industry. The prescription drug market presents a lucrative opportunity for the company, however, it's riddled with regulatory hurdles. Amazon's decision is likely in part to avoid the red tape associated with the Wholesale Drug Distribution Act, Jefferies notes.
Although Amazon may not be looking to store or ship drugs now, that doesn't mean it won't in the future. And while the small margins for brick-and-mortar pharmacies forced some companies like Target to sell their offerings, Amazon could leverage the position to become an intermediary between the pharmacies and health plan providers - what is known as a pharmacy benefits manager (PBM) - to begin negotiating with drug makers and pharmacies to reduce prices, effectively undercutting incumbent PBMs.
The PBM industry is ripe for disruption, presenting a significant opportunity for Amazon.
- The PBM industry is a hugely valuable and heavily consolidated. The three largest PBMs in the US, Express Scripts, CVS, and Optum Rx, control roughly two-thirds of the $423 billion market.
- Moreover, PBMs have recently suffered a bout of negative press exposing their hand in the inflating cost of drugs in the US. This was caused, in large part, by the opacity of the PBM industry, which allowed the companies to recommend exorbitant prices for prescription medication and then collect a large percentage of the spread for themselves.
- Drug makers and health plan providers looking for better revenue cuts could welcome the competition Amazon would introduce. Amazon's entry could bring more efficiency to the process, Takeda Pharmaceutical CEO Christopher Weber told Bloomberg.
CLINICAL CONNECTED WEARABLE PATCHES TO TAKE OFF: Shipments of connected wearable patches will grow rapidly in the coming years, topping 35 million annual units by 2022, according to a new report from Tractica. The growth of this wearable category will be driven primarily by clinical applications, making up 80% of total wearable shipments. Connected wearable patches feature wireless connectivity that allows a sensor to be affixed to a patient's skin and record data for a period of days or weeks before they're removed. These types of devices allow real-time data collection to let patients and physicians track medical conditions. For example. Abilify's MyCite, the first FDA-approved "digital pill," pairs a sensor-equipped pill with an external patch that collects data from the pill in order to help doctors monitor medication adherence. The market for these types of devices is set to generate $7.9 billion by 2022.AUSTRALIAN PATIENT RECRUITMENT APP WINS $25K: HealthMatch, an Australian startup that makes clinical trials more accessible to patients, received the first prize of $25,000 at TechCrunch Battlefield Australia on Thursday. In Australia, thousands of clinical trials are conducted each year. Recruiting for trials is a difficult process for drug and treatment trials sponsors, who will often turn to costly contract recruitment organizations (CRO) to find patients. For context, in the US, patient recruitment is the largest chunk of the $2.6 billion it costs to bring a new drug to market. At the same time, for patients, finding the appropriate study can be tedious and time-consuming. The HealthMatch mobile app, which is connected to the Australian government database of clinical trials, uses machine learning (ML) to match patients with eligible trials, simultaneously broadening the reach and recruitment of these trials, while cutting down on the resources it takes to find them. A further benefit is that clinical trials will likely see a larger pool of patients to select from - that could improve the accuracy and rate of completion of the trials. The service is free for patients and charges trial sponsors on a per-client basis or on an annual license.
IN OTHER NEWS…
- Health IQ, a medical InsurTech startup that offers a 4% discount on life insurance for passing a "health quiz," raised more than $34 million in its Series C funding, led by Andreessen Horowitz, according to TechCrunch.
- The chief information officer (CIO) is increasingly becoming the healthcare systems "utility player," largely because of the impact IT is having on healthcare and healthcare regulations, HIMSS CEO Hal Wolf told FierceHealthcare.
- Google-affiliated Onduo and the Blue Cross Blue Shield Association (BCBSA) have joined forces to offer more personalized diabetes care to BCBSA members. The program aims to match members to appropriate diabetes interventions, such as wireless glucose monitors.