Pharmaceutical Giants' Internet Healthcare Initiatives (2010–2014): Strategic Analysis and Product Landscape

As internet healthcare gains global popularity, how do the giants of the traditional pharmaceutical industry view this transformation? In fact, as early as 2010 or even before, some leading pharmaceutical companies had already taken action. To date, an increasing number of traditional pharmaceutical enterprises have joined the fray. They are striving to find optimal ways to serve physicians and patients through new technologies, centering on their core products and engaging via four distinct approaches: collaboration, investment, acquisition, and in-house development. Their initiatives span from medication adherence solutions and medical sensors to mobile health applications, among others.

VCBeat’s Internet Healthcare Research Institute, leveraging multi-source data, identified 21 prominent pharmaceutical companies that employed internet healthcare strategies between 2010 and 2014, using them as case studies to examine the mainstream directions of pharmaceutical firms’ cross-sector expansion into internet healthcare. This article analyzes pharmaceutical companies’ internet healthcare layouts from perspectives such as frequency of activity, specialized segments, and modes of entry, and highlights the internet healthcare companies most favored by pharmaceutical enterprises.

Internet Healthcare Successfully Captures the Attention of Pharmaceutical Giants

According to statistics from the VCBeat Internet Healthcare Research Institute database, a total of 70 events involving pharmaceutical giants entering the internet healthcare sector occurred between 2010 and 2014. The number of such events increased year by year. The data indicate that since 2012, these industry leaders have accelerated their strategic deployment in internet healthcare. This trend reflects that the gradually heating internet healthcare market is not only driven by startups but also sees the low-profile entry of established players.

Most Active Pharmaceutical Company—Merck

From 2010 to 2014, the top five pharmaceutical companies active in the internet healthcare sector were Merck, Pfizer, Johnson & Johnson, Sanofi, and Novartis. Among them, Merck participated in the most projects, with a total of 16. Notably, in 2014, the electronic versions of the Chinese Journal of Endocrinology and Metabolism and the Chinese Journal of Diabetes were jointly launched with Huakang Quanjing. This initiative allowed 20,000 endocrinologists across China to claim one-year free access to these two journals through the “Yike” and “Chinese Medical Association Series Journals” mobile apps, creating a win-win-win-win situation. However, despite the vibrant market atmosphere, large medical device manufacturers such as Fosun Pharma, Shanghai Siemens, and Weigao Group remained conservative toward internet healthcare. In particular, Fosun Pharma, which has been highly active in the M&A market, has limited its recent acquisitions in the medical device sector to traditional medical devices.

Hot Subsector—Clinical Trials

Among the pharmaceutical companies reviewed, applications in internet healthcare are primarily concentrated in five sub-sectors: clinical trials, disease management applications, big data, digital therapeutics, and health applications. Clinical trials are the area of greatest interest to pharmaceutical companies; this analysis identified 22 projects involving clinical trials, 17 of which focused on remote monitoring of drug efficacy. In Q3 2012, ten leading biopharmaceutical companies—Abbott, AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline, Johnson & Johnson, Pfizer, Roche, and Sanofi—jointly established TransCelerate BioPharma Inc. This initiative aims to identify and address common challenges in drug development, with the goal of improving the quality of clinical trials and accelerating the typically slow pace of drug R&D. This is a key focus for industry giants, given that it is a major undertaking requiring substantial financial and human resources.

Other niche areas include wearable devices, health prescription applications, physician tools, electronic medical records (EMR), drug and clinical treatment databases, medical information services, and pharmaceutical e-commerce. The broad scope indicates that pharmaceutical giants are diversifying their efforts into internet healthcare.

Channel Type — Partnership

Pharmaceutical companies primarily invest in internet healthcare through four channels: collaboration, investment, acquisition, and in-house development. Among these, there is a stronger preference for third-party collaboration models, with 47 projects recorded. There were three acquisitions: first, Medtronic offered $150 million to acquire Corventis, a developer of medical sensors; second, Physicians Interactive, a subsidiary of Merck & Co., acquired Tomorrow Networks to establish a presence in healthcare data.

Proteus Is the Most Favored by Pharmaceutical Companies

Among the internet healthcare companies that pharmaceutical firms have chosen to partner with over the past five years, five stand out: Proteus, PatientsLikeMe, Omniscience Mobile, Exco InTouch, and Akili. Proteus ranks first, primarily because its developed products can monitor patients’ medication adherence—a critical challenge for pharmaceutical companies, as tracking drug efficacy remains their most pressing concern.

Top 5 Most Active Internet Healthcare Companies

1.Proteus

Proteus is a digital internet healthcare company based in Redwood City, California. Founded in 2001, the company primarily focuses on the research and development of electronic health products, such as wearable sensors. Its products can collect and aggregate wearers' physiological metrics, monitor disease treatment data, track medication adherence, and observe heart rate variations during exercise and sleep. In addition, the company has developed products such as digital medicines. To date, Proteus has completed its Series G financing, with total funding approaching $600 million.

Proteus primarily collaborates with pharmaceutical companies to develop capsules embedded with microchips that, once ingested, can detect whether medication has been taken as scheduled in the gastrointestinal tract, thereby improving patient adherence. The major pharmaceutical giants currently known to be collaborating with Proteus include Novartis and Otsuka Pharmaceutical.

2.PatientsLikeMe

Founded in 2004, it is a social network dedicated exclusively to patients with chronic diseases. Users can share their medical records and connect with others who have similar symptoms, thereby improving healthcare outcomes. In 2011, approximately 70,000 patients shared their medical histories on the platform. PatientsLikeMe also conducts observational studies based on data voluntarily shared by its users. Nearly 200,000 users have shared their medical records on PatientsLikeMe, discussing topics related to 1,800 different diseases. It is the most well-known company in the field of medical crowdsourcing.

PatientsLikeMe primarily collaborates with pharmaceutical companies through two approaches. First, it sells patient-related data from its platform to pharmaceutical companies and healthcare institutions, with all personally identifiable information removed; Roche is a notable example among pharmaceutical giants. Second, pharmaceutical companies recruit volunteers for clinical trials via the PatientsLikeMe website, thereby enhancing the efficiency of these trials. Merck and Sanofi are prominent examples of pharmaceutical giants engaging in this practice.

3.Akili

Akili, founded in 2011, is a game developer dedicated to treating attention-deficit/hyperactivity disorder (ADHD) through video games. Akili is also exploring the application of its game in depression, autism, and other conditions. In 2013, Akili secured $7 million in funding through direct investments, grants, and partnerships.

Currently, it is known that Pfizer has entered into an agreement with Akili to test whether the iOS game EVO can be used for the early diagnosis of Alzheimer’s disease. Additionally, Shire, the manufacturer of Adderall—a medication for attention deficit hyperactivity disorder (ADHD)—has invested in Akili and is collaborating with the company to evaluate EVO’s potential in managing ADHD.

4.Exco InTouch

A healthcare service provider offering big data analytics to researchers and patients.

The pharmaceutical companies collaborating with it include Pfizer and AstraZeneca. Pfizer primarily partners on remote monitoring of clinical trials for drugs. AstraZeneca utilizes the technology in its chronic obstructive pulmonary disease (COPD) development project, enabling patients to manage their own condition by simply tapping their personal devices to connect data from sensors.

5.mProve Health

Formerly known as Omniscience Mobile, the company was founded in 2009. As a mobile technology service provider, it primarily facilitated patient recruitment for clinical trials. In 2013, however, the company launched an app for tracking patients’ medical conditions.

Collaborated with pharmaceutical companies Pfizer and Merck, primarily recruiting subjects through mProve Health to remotely monitor clinical drug trials.

In summary, the internet healthcare market holds immense growth potential but also faces intense competition. As an emerging sector, its product promotion and profitability models remain unclear. However, the recent policy relaxation by the China Food and Drug Administration (CFDA) allowing online purchases of prescription drugs is a dream come true for pharmaceutical companies. How pharmaceutical giants will wage this protracted battle in internet healthcare remains to be seen; we await further developments.

Additionally, as of the time of writing, multinational pharmaceutical company Sino-American Tianjin Smith Kline & French Laboratories has quietly launched its official flagship store on Tmall, becoming the first multinational pharmaceutical company to establish a self-operated e-commerce channel in the Chinese market.

Appendix: Overview of Internet Healthcare Initiatives by Pharmaceutical Giants, 2010–2014 (Click here for the full-size image）