Apps on fire, but pharmas losing the mobile health arms race, says report

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Pharma investment in app development exploded last year, as companies branched out beyond diabetes, but industry spending on mobile is still dwarfed by other healthcare players, according to an Ernst & Young report.

The professional services giant found a spike in “Pharma 3.0” initiatives – apps, educational websites, social media platforms, etc. Drug companies launched 220 such initiatives between 2006 and 2010, almost half of which – 97 in all – launched last year. That's a 78% increase over the number of initiatives in existence as of 2009, and where mobile initiatives accounted for 16% of all “Pharma 3.0” efforts from 2006-2009, apps made up half of all initiatives in 2010.

Where pharmas previously focused their app development efforts on diabetes management tools, oncology was the largest category for new apps in 2010, representing 15% of all initiatives (diabetes and metabolic tied for second place with immunoscience/inflammatory, each at 12%). Apps launched in 2010 spanned 14 disease categories, ranging from tools to help patients track vaccination schedules, manage infusions for hemophilia and find cancer clinical trials within 150 miles of their location. Nearly all leading pharmas are active in the space, said the report, though J&J, Pfizer, Novartis, Merck and Roche are particularly big spenders.    

Ernst & Young based its findings on publicly disclosed initiatives – those mentioned in news reports and analyst reports, and only those with a price tag attached. The firm didn't offer a figure for pharma spending on “Pharma 3.0” initiatives but said the estimated $20 billion that non-pharma companies like IBM, GE and Telis spent in the space in 2010 dwarfed drug company outlays on apps and social media.

“New entrants to the health care industry are clearly committing much more to business model innovation than pharma companies,” said report coauthor Carolyn Buck Luce, global pharmaceutical leader for Ernst & Young. “The companies that succeed in this new health care ecosystem will do so by developing innovative outcomes-focused offerings through structured, systematic and scalable approaches to business model innovation. Just as importantly, pharma companies should demonstrate to new players in the health care space why the unique insights they can provide related to patient outcomes will make them indispensible partners.”
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