The Economist - USA (2022-01-15)

52 Business TheEconomistJanuary15th 2022

Deloitte, a consultancy, reckons that

320mconsumer medical wearables will

shipgloballyin 2022 (seechart2).In 2020

Amazonunveiledits$100Haloband.Last

yearGoogleacquiredFitbit,whichmakesa

fancierfitnesstracker,for$2.1bn.Thelat­

estApplewatchalreadyoffersanelectro­

cardiogram(ecg) functionandtheiPhone­

makerplanstothrowinblood­oxygensen­

sorsandathermometertohelpwomen

track ovulation. The latest smartwatch

fromSamsung,Apple’sSouthKoreanrival,

sportsecgandblood­pressuremonitors.

Thetechnologygiantsarealsoinjecting

health­related services into their cloud­

based data­crunching offerings. To that

endMicrosoftpaid$20bnlastyearforNu­

ance,anaifirm.AmazonWebServices,the

e­emporium’s cloud division, has also

launcheda health­careoffering.Oracle,an

increasingly cloud­based business­soft­

warefirm,isfinalisinganacquisitionof

Cerner,a health­itgroup,for$28bn.

Thentherearetheupstarts,whichoffer

productsandservicesofvaryingdegreesof

complexity.Somearesimpleonlinephar­

macies.Truepill,a six­year­oldAmerican

company valued at $1.6bn, now fulfils

20,000prescriptionsa dayandrunslast­

milelogisticsfora rangeofconsumer­fac­

inghealth brands.Oneis Hims &Hers

Health,abigAmericane­pharmacythat

wentpublica yearagoviaa reversemerger

witha special­purposeacquisitioncompa­

ny.AnotherisNurx,whichprovidespre­

exposureprophylacticsforpeopleatriskof

hiv. PharmEasy,anIndianonlinepharma­

cy,raised$500mincapitallastyear.

Telemedicinefirms,whichoffera wider

rangeofservices,havethrivedascovid­19

hasstrainedclinics’capacityandputpa­

tientsoffin­personvisits.China’sWeDoc­

tor,a privatelyheldoperatorofwhatit calls

“internet hospitals”, was last valued at

nearly$7bn. Teladoc,a listedAmerican

firmwitha marketvalueof$13bn, reported

revenuesof$520minthethirdquarterof

2021 , upby80%yearonyear.

Another,moresophisticatedareaexpe­

riencingrapidgrowthisat­homediagnos­

tics.TheTheranosscandalgaveconsumer

diagnosticsa badname.Nowbettertech­

nologyandgreaterrealismaboutwhatit

canachievearerehabilitatingthefield,just

asthepandemichasaccustomedpeopleto

theideaofhometesting.

Thisincludesdevicestoanalyseevery­

thingfrombloodsugartostoolsamples.

Levels Health, a two­year­old American

startup,sellsapp­syncedcontinuousglu­

cosemonitorsdirectlytoconsumers,after

seamlesslyconnectingpatientsviathein­

ternetwithprescribingdoctors.Itsfoun­

der,JoshClemente,wasinspiredbyhaving

toaska friendtosmugglesucha monitor

for him from Australia to confirm his

hunchthathewas,likeone­thirdofAmer­

icans, pre­diabetic—in America the de­

viceswereavailableonlyonprescription

topeoplewithuncontrolleddiabetes.The

startup’s waiting list now stretches to

145,000 people. Digbi Health, another

Americanfirm,usesfaecalmattertoana­

lyseitscustomers’gutmicrobiometopro­

motegastrointestinalhealth.Skin+Me,a

Britishone,savespeoplea triptotheder­

matologist by providing prescription­

gradeskincareonthebasisofselfies.Thri­

va,alsofromBritain,analysesbloodfrom

fingerprickstoshedlightonconditions

suchashighcholesterolandanaemia.

Doctorsondemand

Abigreasonwhyithastakensolongfor

consumer technology to disrupt health

careisthatthehighlyregulatedsectordoes

notlenditselftoSiliconValley’s“movefast

andbreakthings”credo.Butrecentyears

have shown that disruption is possible

even in rule­bound industries. Hamish

GriersonfoundedThrivaafterwitnessinga

digitalshake­upinhisoldjobinpayments.

LevelsHealth’sMrClemente,helpedkeep

astronautsfightingfitatSpaceX,whichhas

prisedopentheoncegovernment­domin­

atedspacefaringbusiness.

Onestrategyistooffer“generalwell­

ness”products,whichevaderigorousscru­

tiny,andonlyconsultmedicalprofession­

alsforadvisorypurposes orto convince

potentialinvestorsthatyourproductsare

backed by science. Thriva, for example,

saysitsbloodtestsoffer“insights”rather

thanofficialdiagnoses.

Othercompanies,especiallythosewith

higher­techofferings,aretreadingcareful­

ly.MannyMontalvo,whooversees“Digi­

haler”salesatTeva,insistsitisnota con­

sumerproduct.“Thisisstillmedicineand

therightmedicinehastobeselectedfor

thepatient,”hesayscategorically.Apple

soughtclearancefromAmerica’sFoodand

Drug Administration (fda) for its new

watch’secgfunction.

Theregulators,fortheirpart,aretrying

to move faster themselves. The newly

mintedfdachief isaformeradviser to

GoogleHealth,thetechgiant’shealthven­

ture.Theindustryhopesthatonhiswatch

theagencywillfinallyadoptlong­delayed

standardsfordigital­healthsoftware.Aus­

tralia,Japan,Singaporeandtheeuhaveset

out digital­healthstrategies in order to

createsimilarstandardsfordetermining

thequality,safetyandclinicalvalueofnew

healthdevices.Morecountriesareadopt­

ing data­protection rules that ought to

makeitclearertoentrepreneurs,investors

andconsumerswhatdatacanbeshared,

withwhomandhow.

The consumer­health boom has hit

snags. Investors who pushed the share

pricesofonlinepill­peddlersanddigital

hospitals up whenever covid­19 spiked

havecooledonsuchfirmsnowthattheco­

ronaviral threat has receded somewhat.

Afterexceeding$30bnatthestartof2021,

Teladoc’smarketvalueisbackwhereit was

beforethepandemichitinearly2020.The

prospectsofHims &Hers,whose share

pricehasdeclinedbythree­quartersinthe

past year, may have been additionally

dentedbyAmazon’slaunchinlate 2020 of

itse­pharmacybusiness.China’sdigital­

healthcompanieshavebeencaughtupin

theCommunistParty’sbroadertechcrack­

down.WeDoctorhasshelvedplansfora

blockbusterinitialpublicofferinginHong

Kong. TheTheranossagaoffersa caution­

arytaleofhowtrickybiologyiscompared

withmuchcomputerscience.

Someproductswillturnouttobeduds,

andregulatorsmayyetdisruptthedisrupt­

ers.Still,asScottMelvilleoftheConsumer

HealthcareProductsAssociation,atrade

body,putsit,“Thereisnogoingbacktothe

oldpaternalisticsystemwhereyouarere­

lyingexclusivelyona medicalprofessional

foryourhealthcare.”Enterprisingcompa­

nies want to help people recover more

quicklyor,betteryet,avoidgettingilltobe­

ginwith.Thatisa negativeprognosisfor

the hospital­industrial complex, which

profits fromthevery sick.Foreveryone

else,it ismostlya positiveone.n

Inrudehealth

Worldwideinvestmentsindigital-healthstartups

$bn

Source: CB Insights

1

60

50

40

30

20

10

0

2120191817162015

Wearing thick

Worldwide health wearables market

Units shipped, m

Source:Deloitte

2

*Estimate

500

400

300

200

100

0

2423222021*

Wearable medical

sensors and devices

Smartwatches and

fitness trackers

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