Digital Pharma Files IPO Prospectus Amid Surge in Healthcare Digitization

Technological advancements are transforming healthcare delivery models. Not only in the United States, but worldwide, a major shift is underway: modern healthcare increasingly encourages patients to break free from traditional constraints and actively participate in the diagnosis and treatment process. From online consultations to electronic health records, it is evident that digitalization will become the central theme of future healthcare. As medical processes continue to undergo digital transformation, pharmaceutical companies are also eager to engage, gradually venturing into the digital realm.

First, let’s examine the reasons why pharmaceutical companies are moving toward digitalization.

★ Clinical Data Are Necessary but Insufficient

Pharmaceutical companies have long relied on randomized controlled trial (RCT) data to demonstrate the safety and efficacy of their products. However, there is an exponential growth in patients’ demand for access to real-world evidence (RWE). As pharmaceutical enterprises undergo digital transformation, leveraging big data analytics will effectively meet this need.

★ Shifts in Patient Behavior Patterns
As in other industries, consumers have become more proactive and interconnected. In the pharmaceutical industry, patients are increasingly leveraging digital tools to take charge of their health and access healthcare services. Surveys show that over 70% of patients in the United States search for health information online, and more than 40% rely on online tools for diagnosis and treatment. Patients can learn about drug safety and efficacy through social networks such as PatientLikeMe. As an increasing number of digital channels for diagnosis and treatment emerge, patients are likely to opt out of costly hospitalizations.

★ Continuous Progress in Healthcare
Healthcare has gradually shifted from managing acute episodes to providing continuous, coordinated health management. This is particularly critical in the treatment of chronic diseases, where prediction and prevention play a vital role. Consequently, pharmaceutical companies face new requirements, such as the ability to collect patient activity data anytime and anywhere to enable targeted therapies.

★ Intensifying Competition
Surveys show that in the United States, investment in pharmaceutical companies’ digital channels grew fivefold from 2010 to the end of 2013. In the first half of 2014, investors spent $2 million on healthcare transformation. Today, there are tens of thousands of patient-oriented digital health tools available in the Apple App Store. Amid such a highly competitive external environment, pharmaceutical companies must respond swiftly to maintain customer loyalty.

So, what are the pathways for digital transformation in pharmaceutical companies in recent years?

★Launch App
Nowadays, pharmaceutical companies are no longer confined to the stages of drug research and development, manufacturing, and sales. In the vibrant internet ecosystem, they are increasingly building unique health platforms and developing their own mobile applications based on these platforms. A survey by a German mobile app research institute revealed that top-ranked pharmaceutical companies worldwide each have an average of 65 apps available on the Apple App Store and Google Play. Among them, Sanofi is undoubtedly the most active in launching mobile applications. The following section highlights two of its apps:

● iPhone External Blood Glucose Meter iBGStar
This is a home blood glucose meter developed by Sefino, designed to enable diabetic patients to conveniently record their blood glucose levels anytime and anywhere. Most importantly, Sefino subsequently launched a free downloadable app compatible with the iBGStar. After a blood glucose test, the device automatically transmits the data to a smartphone, where an assessment report is generated, thereby facilitating diagnosis and treatment for both patients and physicians.

● iPhone Case Get Well Kit

● Sanofi has ingeniously made medication management truly mobile, with each differently colored box containing a specific medication. The accompanying Get Well Kit app offers multiple features, including customized scheduling, timely reminders, delayed alerts, and medication logging. Medication boxes + mobile app = the user’s personal health companion.

★ Integrated Online and Offline Platforms
Collaboration between pharmaceutical companies and e-commerce platforms is gradually becoming a trend. Many companies have partnered with Taobao Mall, Tmall, JD.com, and Yihaodian to open flagship stores, building digital platforms that enable online-to-offline E-Marketing. The extensive promotional impact of online flagship stores can significantly enhance consumer trust in their pharmaceutical products, while another key advantage lies in competitive pricing. For instance, well-known pharmaceutical enterprises such as Yunnan Baiyao, Hengrui Medicine, and Fosun Pharma have long begun expanding their online and offline business ecosystems. For many pharmaceutical companies, the focus of online sales remains on health supplements and medical devices, rather than on symptomatic treatments for acute conditions such as colds and fever.

★ Simultaneous Operation of Weibo and WeChat
If pharmaceutical companies do not wish to fall behind in today’s fiercely competitive internet landscape, they must recognize the critical relationship between mobile social networks and the promotion of drug value. Statistical data shows that as of March 31, 2013, Sina Weibo had 536 million registered users, with 49.8 million daily active users. Among Weibo users, 23.6% followed corporate updates related to healthcare and medical services, while 19.4% followed information on health care products.

WeChat Official Account posts, Moments shares, and other such channels are highly effective for pharmaceutical companies to display, introduce, recommend, and sell their products.

In addition to developing their own apps, leveraging e-commerce platform partnerships for sales, and harnessing the combined power of Weibo and WeChat, the global pharmaceutical industry continues to explore digital transformation trends, as exemplified by initiatives such as the Digital Pharma Series.

The Digital Pharma Series, launched in 2006, has held eight editions in cities such as Philadelphia and San Francisco in the United States, and Paris in France, attracting 6,000 healthcare industry professionals from around the world. The inaugural China Digital Pharma Summit was held in Shanghai in 2013. The conference focused on the global environment and current status of China’s domestic pharmaceutical industry, providing an in-depth analysis of new cases, strategies, and technologies in mobile applications within the Chinese pharmaceutical sector. It featured extensive discussions and academic sharing on how to secure a foothold in China’s digital pharmaceutical market, master multi-channel digital marketing approaches and methods, and provide more optimized tools for product sales.

It is projected that by the end of 2015, China will become the second-largest pharmaceutical market in the world.

Edited by: Mo Renying

Chief Advisor for VCBeat’s Glossary of Hot Terms in Internet Healthcare: Zhao Xinyuan, current CEO of Beijing Yingtai Kelong Technology Co., Ltd., and Member of the Technical Steering Committee of HL7 China.

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