- Close to two-thirds of healthcare business leaders and investors said digital health is a strategic priority for them, with 63 percent planning to invest more in the future.
A full 83 percent of 441 respondents to a global survey by law firm Simmons & Simmons said that collaborations, such as consortiums and corporate joint ventures, are the best way to take advance of digital health opportunities in the next 12 months.
Seventy-nine percent of respondents said minority investments are the best way to seize opportunities, while 78 percent cited mergers and acquisitions as the best path, 70 percent said hiring staff with digital expertise is the best path, 65 percent cited building internal capability as the best bet, 66 percent said signing service contracts is the best way, and 59 percent said changing company culture and policies is the best way to seize opportunities.
Simmons & Simmons define digital health to cover the use of digital technologies for:
- Healthcare processes, including clinician support software, healthcare institution management tools, patient records, and remote patient interaction and monitoring
- Life sciences processes, including big data analytics for drug discovery, clinical trial management, and disease population purposes
- Complementary patient-centric tools, including condition, treatment or wellness-related apps or social media and medication adherence tools
Digital health collaborations refer to commercial arrangements or corporate ventures between distinct organizations with the objective of realising an opportunity related to digital health.
Around 71 percent of organizations said they plan to increase investment in multiparty deals over the next three years, 66 percent plan to increase open-science collaborations, 65 percent intend to increase mergers and acquisitions, 64 percent will look for cross-sector/multi-industry collaborations, 64 percent will increase minority investments, 55 percent will increase bilateral and crossborder collaborations, and 52 percent will look to consortia with competitors to address industry-wide challenges.
Greater collaboration complexity often brings increased risk. Multiparty arrangements create a web of contractual, intellectual property, regulatory, competition, governance and cultural issues that must be carefully dealt with. The more parties that are involved, the more difficult it can be to settle disputes and the higher the barriers to success can be.
Only one-third of collaborations achieve their goals. Simmons & Simmons’ research shows that organizations not only struggle to find the right partners to work with, but also struggle to forge successful relationships.
According to the survey, only 34 percent of their collaborations achieved objectives, only 11 percent of collaboration and investment proposals that cross organizations’ desks enter detailed due diligence, and only 4 percent are executed.
The study identified eight barriers to successful collaborations: lack of direction, siloed thinking, IP complexities, data insecurity, uncertain market access, product liability issues, divergent objectives, and cultural clashes.
“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 organizations and investors will be in a good position to execute successful and transformative transactions,” said Simmons & Simmons Corporate Partner Jocelyn Ormond.
Addressing regulatory matters, data protection and cyber security, product liability, intellectual property, cultural issues, and structuring and governance is critical to the success of collaborations. Anticipating these issues early can help deliver more successful collaborations and help companies survive the digital revolution and investors to secure strong returns, according to Simmons & Simmons.
“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,” concluded Simmons & Simmons IP/Regulatory Partner Michael Gavey.