To drive innovation and address unmet market needs many established healthcare companies form commercial partnerships with startups. Incorporating novel solutions and jointly running the digital health agenda is still based on trial-and-error process for many. Only every fourth partnership is considered to be successful. Is there a better way to drive open innovation? In a candid conversation with Dr. Nikos Green, Senior Venture Architect & PO Neuroscience at RoX Health, a startup studio rooted in Roche, we explored how they startup healthcare, what makes their value proposition and business model stand out, as well as what can Pharma learn from digital innovators, the importance of ecosystems and some of the interesting business models within the Alzheimer’s digital space.
Today, we see a strong trend in the healthcare market with fast development of digital health ecosystems based on diverse partnerships and 3rd party digital health solutions integration. A one stop shop can unlock immense value for all stakeholders by delivering unified timely and verified tailored insights from a range of devices and remote patient monitoring tools to both healthcare teams and patients.
Identifying and selecting the best partners and successfully integrating them to an organization service offering are at the core of forming thriving ecosystems. And yet, over the years, established healthcare companies, including Pharma, have tried different partnership channels to drive innovative healthcare solutions and for many building a robust and effective collaboration with start-ups is still a big challenge. According to R2G’s “Partnerships in Digital Health” whitepaper, 80% of digital health partnerships are frequently destined to fail.
Establishing a sizable and unified digital ecosystem is feasible with the right approach to derive true value from the alliance. In our latest whitepaper, R2G’s team recommends an eight-building-block approach to build integrated and impactful ecosystems of digital health solutions via partnerships. Find out more about “Building Digital Health Ecosystems” here.
How is RoX Health taking digital healthcare to the streets? What can Pharma learn from digital innovators? Thanks to DiGA everybody speaks about reimbursement, but what does it take to achieve higher outreach among HCPs and patients? How big is the Alzheimer’s disease market? And what are some of the business models addressing Alzheimer’s disease?
We talked to Dr. Nikos Green, Senior Venture Architect & PO Neuroscience at RoX Health, about the foundation of RoX Health and how they turn ideas into healthcare businesses and launch and scale innovations into the healthcare system, the trends that drive the digital health market and what is ahead of the company.
Enjoy the interview!
Research2Guidance: RoX Health stands behind “We are taking digital healthcare to the streets.” Can you introduce to us the company and what footprint would you like to leave in this space?
Dr. Nikos Green: At RoX Health, we startup healthcare. Our team believes that everyone has a right to experience and to enjoy good health. We work with startups and founders to launch and scale patient-centric digital health innovations into the healthcare systems.
To answer your question, we need to look at WHY the company was founded in 2020, as we are rooted in Roche!
Prior to the birth of RoX my colleagues – including our managing director and our head of business development- who come from Roche wanted to initiate digital health projects, so naturally – as the Roche affiliates are sales organizations – they were trying to work with startups from within Roche.
During these projects they realized that there is a disconnect and a difficulty because of the inherent difference in nature of corporate and startup businesses. On one hand, you have a pharma corporate with established processes, sustainable business model and usually decision making that takes a bit of time and on the other hand, there is a digital health startup that moves faster, has less experience and tends to be more flexible. It has been a challenge for those two entities to work together, as there is a lot of overhead alignment involved and some challenges in expectation management. However, as innovation in this setting takes place at the startup level, the need for functioning open innovation settings between those two entities is there.
This experience made them work on a better way to drive open innovation. They looked around and talked to various company builders and accelerators from different industries, not just healthcare. The key conclusions for them led to the construction of RoX as an entity outside the corporate organizational structure but with ties to the vast amount of expertise within the corporate. In this way certain degrees of freedom are established to support faster decision making as well as the ability to enter earlier stage projects where normally the corporate would say “Well, you know this sounds interesting, but it is not at this time for us!”.
So, RoX Health was founded to act as a gearbox between the startups, the pharma corporate but more importantly also to the healthcare system – as market entry of new products can only happen under very specific regulations.
Research2Guidance: Yes, partnerships between established healthcare companies and start-ups are important channels for innovation, but indeed collaborating with companies which are much smaller in size and more agile could be a challenge for incumbents. What is your value proposition?
Dr. Nikos Green: Our value proposition is best described as a startup studio. We provide both company builder and accelerator type expertise and services.
Our mission is to start from a patient centric view, identify gaps in care and try to address those gaps with digital health solutions.
In a nutshell, we offer startups an entry into the healthcare system, and we work with founders and help them build their businesses to be ready for the healthcare market. For example, if a startup already has a product and they want to enter the German healthcare market, we can support them in getting their “business” ready with various steps such as support in fulfilling regulatory requirements, establishing a good pricing strategy for their products or developing a goal-oriented sales and marketing approach. Our team has a lot of experience within a very regulated market, and we have an established network of partners within healthcare and technology, so that we can be a valuable partner.
Our focus is on the German market, but as we are also a part of a larger organization, we can also consider -at a later stage- scaling and internationalization of a solution across different regions.
Additionally, there are a lot of unidentified needs that are still not being addressed. There are entrepreneurs and clinicians that see them from their day-to-day work and experience that something should be done about XYZ and if they have a great idea with potential upside in addressing those needs while at the same time having a chance in establishing a business model, we go with them through what we call “a company building phase”, where we help them set up a prototype and a company structure that can bring a particular idea to the healthcare market at some point in the future.
Here, I want to make it very clear we can support with initial investment while structuring our participation in various ways such as for instance revenue share agreements depending on what the actual case is.
Research2Guidance: How much does Roche influence your business goals?
Dr. Nikos Green: RoX Health mission is to follow a patient centric approach. That means, we identify a need for patients and this need does not have to be in the core business of Roche. However, addressing this need must be based on a sustainable business model. We are not purposely aiming to look away from our mother organization, we do work together on some projects but also have the mandate to explore and identify new -digital health – business models.
Research2Guidance: You are a for profit organization. How do you ensure your commercial success?
Dr. Nikos Green: A very good question.
Because digital health is a very big field and we are a team of 10, our targets are narrow. I am leading our activities in Neuroscience, which is for instance focused on Alzheimer disease, which also has some alignment with Roche. We also have other fields where there is no direct alignment, such as for instance women’s health.
When it comes to commercialization, at present a large part of digital health business models are designed around selling their services to Pharma for instance for the support or improvement of clinical trials. But this is not what we look for primarily.
When we look at the solution, we also look at it from a commercial lens – the business plan, patients’ needs it addresses, the reimbursement or cost structure behind the problem and of course we take into consideration our understanding of the market. We might say “Ok this is a solution that has a potential, and this potential can be realized within 3 years to achieve market entry. So, within this 3-year horizon the digital health offering should be on the market and the market should also be ready for this solution / service.”
And if we look at this question in a broader way, for example, it is good that the DiGA scheme exists and yes, it is slowly picking up. I think last year there was a report stating that about 39 000 prescriptions were issued in total. Of course, this is not comparable to any business scale based on our heritage, but now we are willing to invest and to explore the market for digital health.
So, expectations are high, and -keep in mind- digital health or healthcare in general is a long game. There are rarely any fast wins. Having said that, we had the pandemic and we saw the acceleration of say telemedicine! But how many situations of this kind will we have in the timeframe we are operating?
Research2Guidance: Since you have mentioned DiGA, we released a whitepaper with a key message “DiGA is not enough!” DiGA alone does not ensure a high adoption rate! In your opinion, what does it take to achieve higher outreach among HCPs and patients?
Dr. Nikos Green: Yes, I agree DiGA alone is not enough, but there is also a lot of value in it. I must say thanks to DiGA everybody speaks about reimbursement for digital health, and even more importantly it also has shifted the focus really on patient centricity. And this, I like a lot!
Ultimately the solution must lead to an outcome that generates benefits for the patients, and this is the more interesting thing. Being listed is just the first step. Being prescribed by the physicians and used by patients requires the right selection of distribution channels and a concrete value. We are seeing DiGA prices and the frameworks and negotiations around them and of course one can’t use, for example, a standard Pharma sales model, that would be too expensive.
In my opinion what needs to be done are several things:
On one hand, everybody talks about acceptance, and I think this will progress, but one needs to go a level deeper and ask themselves “Where do physicians and prescribers get informed about DiGAs?”. We have online communities with professional moderators where doctors go, and they get insights about different solutions and I think with time the physicians will get used to these digital health tools in their workflow, they will thus see value.
On the other hand, we have a lot of single point solutions: an app for this, an app for that, a service for this and a service for that. And if we think about the “poor” patients or physicians having to use many different solutions, this of course is not going to work in a good way. What must be done is some sort of consolidation leading to integration, so that we have more like one stop shops with different service offerings – at least at the interface level to the users, although we won’t get much improvement in healthcare if the other levels (think of the data level as an important instance) remain fragmented.
I don’t argue for monopolies in healthcare but more for a scenario in which we may have for instance solutions that can support specific age groups or certain indications in an extensive way during a patient journey, not just one small part of it.
In this way it can provide easier usage, easier access and on top of that in parallel with all these improvements it can also generate data that may become insightful. I am not referring to necessarily health data – which is of course quite sensitive and falls under regulations but for instance usage data or data which supports segmentation and need based service models.
Research2Guidance: Creating a successful platform to provide complete patient care addressing several conditions simultaneously can become the ultimate health management solution, thus can enhance health outcomes, have a wider user base and higher usage. What can Pharma learn from digital innovators?
Dr. Nikos Green: That is a very interesting topic that is being pursued by a lot of pharma players.
In the first place, I think Pharma can learn about patient centricity and alternative ways of how to shape this interaction. So far Pharmas’ main stakeholders are HCPs and, in the future, we believe that this approach needs to be expanded.
Pharma is looking at how they can further their relations to patients. I think through digital they can reach out to them, connect with them, and better communicate with them for more precise and thus better diagnostics, therapy, and prevention. And of course, they can also engage with people who surround the patients, like family, or caregivers next to HCPs. Although even in these relations there are new ways to be incorporated through digital with the goal to improve healthcare. All of these are not something ultimately new, right?! A lot of things have been tried, e.g., e-commerce ways of engaging with customers, but there is still a lot to learn.
Moreover, Pharma has these very long drug development periods and for certain aspects of it, for instance, digitally derived data could better support the clinical development in terms of finding out for whom certain drugs are suitable, or improve side effect management, or later offer more personalized adherence support. Though I think the problems are not new, the ways of how to approach them present some upside.
Of course, at the moment the judgement is still out on the new ways. From a certain perspective, one perceives it as a benefit, but we still need more experience and change to see real value on a bigger scale – though I think the pandemic has made clear that we also see the potential downside if we do not make use of digital options.
Research2Guidance: What trends drive the digital health market?
Dr. Nikos Green: In my opinion one trend will be consolidation, which may lead to integrated solutions, let’s say a healthcare platform but of course there are different versions of that too.
I think within healthcare digital has suffered early on a bit from too high expectations. “Yes” digital can improve a lot of things in healthcare. For instance, if you are living in a rural area, you might be able to have access to health services only via telemedicine; but ultimately one needs to connect these services to the services in the offline world to deliver strong and lasting positive outcomes and thus improve the overall well-being of a patient.
The other trend that I see is hybrid online / offline model. One may enjoy online coaching and still have the need to join a support group that is in his / her neighbourhood and have face-to-face interaction. And that in itself is also not entirely new but the ways in blending these things together are. That is the way.
This online – offline connection is especially important with certain age groups. For example, because of the focus area of my work, I am dealing a lot with an elderly population and maybe things could be different in a couple of years, but at present at least in Germany among this group digital literacy is still a challenge if you think about digital health and it’s accessibility.
And, in the last two to three years, we were at this intersection from the lab to the street. For instance, digital biomarkers are being used in Multiple Sclerosis and Parkinson’s to measure, affect, and foresee health outcomes. I believe we will see more of that – collecting data consistently and with high frequency, that will lead to more tailored offerings, and we will see actionability. Because so far it was only generating data and having some sort of understanding, and now the next step will focus on actionability, integrating all the data into real decision making. At present there are some projects that show that it can work but not at a broader scale. And this is yet to be experienced.
Research2Guidance: You are leading the Neuroscience activities at RoX Health, e.g. one of the diseases is Alzheimer’s, which is no longer the disease of just elderly people and earlier diagnostics is so important. What is the focus of the startups that are under your umbrella?
Dr. Nikos Green: In general, I am fascinated by what people’s imagination and ingenuity can produce.
Our team looks at solutions along the entire patient journey from prevention when a person is healthy, and it is about maintaining or even improving their wellbeing and health until the very latest stage when one is in dire need of good care or special assistance. The digital health solutions along this journey might differ, as the needs are not the same.
Our specific focus is on the earlier parts of the disease / earlier detection because this is one of the biggest problems in our healthcare system. Everything you can do at that moment -being non-medical treatment or medication – is only valuable if you start as early as possible.
Business models vary, we observe approaches built on reimbursement or on out of the pocket spending, which is the smaller market, and can be driven by acute family situations.
In Germany, for instance, we have an ageing workforce, and if we look at the prevention market one can go either directly to the consumer or if one develops a more general service addressing not necessarily dementia but overall brain health, which then includes other indications like stress, depression, the service might have aspects of meditation, sleep training, exercises, etc. In this case the solution provider might partner with employers, who would like to have a fit and healthy workforce.
Often there is a neglected population which is also affected heavily. I have seen business models that tackle this point of enabling people to stay longer at home because through technology one can monitor and observe different situations, inform the care providers but also help them to really understand what this specific person can do in terms of activities and support him / her with that.
And if we look at the later stage when one becomes part of the care system, we are running into care itself being a huge problem and will become even larger. In this case, part of the solution will be to address care insurances which also belong to the stationary insurers system and the business model could be to work on some sort of reimbursement or selective contracts. In diseases that have on average a long progression period, as of course, there are some fast progressors, the hardest thing is to show real outcome. The outcome can be some patient centric thing.
When we speak about the ageing population often, we do not only have Alzheimer‘s, but the person might have other diseases, so how to break this apart!?
Research2Guidance: Yes, indeed. On one hand there is a shortage of healthcare professionals, so the cost of care is very high, and it is not scalable, on the other hand, hundreds of millions of patients globally suffer from chronic diseases and their comorbidities. And with ageing we are naturally predisposed even more to cognitive and psychological changes on top of everything. How big is the Alzheimer’s disease market?
Dr. Nikos Green: The market is big and there are huge unmet needs. In Germany there are over 1.6 million patients suffering from different forms of dementia, most of them from Alzheimer’s.
And when it comes to novel digital solutions addressing this market, we must remember that often those affected by this disease have spouses, children, people who support and care for them. Consequently, one can also build digital solutions or services helping them.
The need is out there, and it is growing. Some seminal longitudinal studies have shown that our lifestyle has a fairly significant impact on health as we age. Some projections depict Alzheimer as one of the next bigger societal disease challenges. So far this is a projection, but we should address it earlier than later.
Research2Guidance: What is ahead of RoX Health?
Dr. Nikos Green: Until now, we have built our capacity and understanding of our ways of working with our partners and fine tuning them. At present it is all about execution.
I believe in front of us are more exciting partnerships with startups, entrepreneurs, and clinicians who have good ideas and who can help us ultimately to bring digital health solutions to the patients, their loved ones, different supporting care systems and to the doctors / physicians. Providing solutions that these stakeholders are able to use in an efficient way: the way they need and when they need them. Because obviously you do not want to have a high load with your digital apps, but you want to deal with solutions in a straightforward, simple and easy to use way – harder said than done and definitely not what we experience at the moment.
That is why, at RoX Health our mission is to startup healthcare and make desired digital health solutions available to people.
Research2Guidance: So, we came back to where we started today “taking digital healthcare to the streets!”
Dr. Nikos Green: Exactly!
Research2Guidance: Dr. Green, thank you very much for this interesting conversation. We wish you and your team at RoX Health to stay healthy and have a lot of success!
ABOUT RoX Health
RoX Health GmbH – based in Berlin, Germany – is a startup studio rooted in Roche. RoX follows an open innovation approach to digital health. Currently, there are 3 main areas of interest: oncology, neuroscience and women’s health. For more information, please visit: https://roxhealth.com/