How 23andMe’s Acquisition of Lemonaid Health Changes Personalized Healthcare

How 23andMe’s Acquisition of Lemonaid Health Changes Personalized Healthcare

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MDisrupt CEO and founder Ruby Gadelrab on why the combination of the two companies is so promising.

Integrating genetics into primary care—for real

On Friday, 23andMe announced its acquisition of Lemonaid Health, the telehealth upstart and drug-delivery service, “in a bid to make its personalized genetics approach part of patients’ primary care,” stated Fortune.

Between 2014 and 2017, I worked at 23andMe as VP of commercial marketing. It was there that I learned the principles of consumerized healthcare. Everyone in the company had a maniacal focus on the consumer experience. Every decision we made as an executive team was through the lens of “How does this positively impact the consumer experience?”

The acquisition of Lemonaid Health is a bold move by 23andMe. I believe that it is rooted in adding value to the consumer experience and has the potential to change the way we approach primary care.

What makes the 23andMe and Lemonaid acquisition so interesting?

Mastering consumer engagement

23andMe has mastered consumer engagement. It was one of the first companies to make genetic information simple and accessible to consumers and to demonstrate that individuals were willing to pay for information on both health and ancestry, with over 11 million consumers buying the tests. 23andMe was the first company to get FDA authorization to sell genetic tests directly to consumers without clinicians being involved in the process. And the company did a fantastic job of communicating the information in reports in a simple and engaging way. Furthermore, they engaged consumers in research, with an over 85% consent rate.

Clinicians are a core part of consumer healthcare

During my time at 23andMe, as consumers became more interested in the health reports that 23andMe provided, they started to take them to their healthcare providers to discuss. The problem was, most healthcare providers had no idea what the report was or what its clinical utility might be. Further, healthcare providers had no time to try and make sense of it in a 20-minute visit. This broke the consumer experience and made it difficult for the valuable information in the 23andMe report to be actionable within our current healthcare system. One of my roles was to create a “23andMe for Medical Professionals” program in an effort to educate clinical early adopters on what the reports meant.

Consumers taking their reports to their healthcare providers created frustration everywhere. Consumers were frustrated that valuable genomic data in their 23andMe report was not taken seriously by their healthcare providers. Healthcare providers were frustrated that they were receiving data outside the standard of care that they did not know how to use or have the right infrastructure to integrate into their patients’ care. The company was frustrated because the healthcare providers’ reactions and underutilization of the 23andMe report ruined their consumers’ experience.

This issue underscores the importance of involving healthcare providers early and often as digital health innovations are built and deployed—something that’s an essential pillar of our work at MDisrupt.

Timing is everything

Genetic information is useful both clinically and personally, and yet traditional healthcare is about ten years behind medical genomics research. This can be attributed to the perceived lack of clinical utility for many genetic tests on the market as well as the “two-year problem.” This is a problem of economics and the ROI of genetic testing. Whoever pays for preventive genetic testing doesn’t get the benefit of it, because people change employers and providers at least every two years.

Post-COVID-19 pandemic, health systems have even less incentive to take an interest in genomics. These days, they have bigger problems: making up the revenue they lost during the pandemic and taking care of the patients whose medical treatment got delayed in the pandemic.

23andMe has the right idea. The only way to create an incredible consumer experience, and to make genomics part of the decision-making process in healthcare, is to own the pipes that can deliver true healthcare—meaning bringing healthcare providers into the process.

This does two things. First, it gives consumers a place to go to discuss their healthcare, genomic data included. Second, it allows a genetic testing company to deliver additional health services to its consumers (i.e., their own telemedicine channel). Having clinicians as part of the genomics journey is the only way to improve the consumer/patient experience, and make genomics meaningful in healthcare.

Genomics + telemedicine + therapeutics = a new category of genomically powered healthcare

Interestingly, it is the combined efforts of two digital health companies and not a genomics company and a healthcare system that may be able to truly integrate genomics into healthcare.

And with 23andMe, it doesn’t stop there. Remember that the company has made significant efforts and investments into therapeutics with a $300M investment and partnership with GSK in order to redefine the process of drug discovery and potentially get drugs to market faster.

This is why the acquisition of Lemonaid Health by 23andMe is so fascinating. 23andMe, with its genomics data, consumer engagement, therapeutics efforts, provider network, and telemedicine platform can potentially become the path to truly individualized clinical care. We’ll be watching closely to see what happens next with this new category of genomically-powered healthcare.

If you want to dive into more interesting topics related to healthcare, check out our blog at MDisrupt.

At MDisrupt, we believe that the most impactful health products should make it market quickly. We connect digital health innovators to the healthcare industry experts and scientists they need to responsibly accelerate product development, commercialization, adoption, and scale.

Our experts span the healthcare continuum and can assist with all stages of health product development: This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product, talk to us.

Overly White Genetic Databases = Decades More Health Disparities

Overly White Genetic Databases = Decades More Health Disparities

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MDisrupt CEO and founder Ruby Gadelrab on how more inclusive genetic databases can reduce health disparities and bring precision medicine to everyone.

The precision medicine problem no one talks about

Precision medicine has long been a promise of the The Human Genome Project (HGP). Humans are 99.9% genetically similar, but it is the 0.1% difference that holds the key to the causes and potential cures of our diseases. The goal of the HGP was that by building genetic databases large enough to allow scientists to see the patterns and variations in the 0.1% difference in our genetics, we could give healthcare providers “immense new powers to treat, prevent, and cure disease” through precision medicine (pharmacogenetics, cancer screening and diagnostics, and much more). However, nearly 20 years later, this promise of better diagnostics and personalized therapeutics is only a reality for those of European descent. That’s because most of the world’s genetic databases consist primarily of genomes from people of European descent – and yet we know that individuals of other ancestries suffer from certain genetic diseases at a much higher prevalence.

So, how did we get here?

3 reasons genetic databases are biased

First, the genome studies conducted that led to building the first genetic databases, the genome-wide association studies (GWAS) were done in the United States and, to a lesser extent, in Europe. A 2009 analysis of the GWAS studies showed that 96% of participants were of European descent.

Second, recruitment of participants in scientific research is notoriously difficult. The faster researchers recruit, enroll, and consent participants, the faster they get the data and can publish. Participants in the GWAS studies were mostly volunteers who lived near well-funded academic institutions, and who had the motivation and the means to travel to those institutions. This resulted in the study populations not being representative of the diversity of the US population. Very few institutions tried or were able to build trust with underserved and underrepresented populations in order to successfully enroll them in the studies. The majority of the studies were conducted by scientists who identified as white. In fact, according to the National Institutes of Health (NIH), only 7% of all NIH R01 Grants were awarded to Black American and Latinx scientists.

During the GWAS era, I worked as the head of international marketing for Affymetrix (now Thermo Fisher Scientific). Affymetrix was a leading manufacturer of microarrays, the technology used to conduct GWAS research. Even back then, we were concerned about the European bias in genetic studies, so my team and I spent 2009 to 2012 traveling around the world meeting with ministers of health and major research institutions, encouraging them to fund and build genetic databases representative of their own populations. Some of these initiatives did eventually take off—notable examples include The Saudi Genome Program, H3Africa and the China Genome Project.

Third, over the last five years, new types of genetic databases emerged from the private sector. More than 26 million people purchased direct-to-consumer genetic tests. While these products have done wonders for accessibility of genetic information, they are also cost-prohibitive for underserved populations and sold by companies that are primarily US-based. This has resulted in new genetic mega-databases that, once again, are biased to people of European descent.

Private sector solutions

Individuals of African descent are highly underrepresented in genetic databases and yet genetic diversity in Africa is higher than any other region in the world. What’s more, African populations have the highest burden of disease due to Africa’s complex population history; large variations in diet; climate; and elevated exposure to infectious disease.

To their credit, some private sector genetic testing companies have tried to address this gaping disparity in genetic databases.

23andMe had the right idea and tried to address the problem through The African Genetics Project, which sought to recruit and provide detailed ancestry results to 23andMe customers of African descent.

The Nigeria-based company 54Gene is also seeking to equalize precision medicine by creating the world’s largest biobank of African genomes, which will be used to build the next generation of diagnostics and therapeutics.

Even so, we have made only marginal improvements in the diversity of our genetic databases. In 2020, a study conducted under the H3Africa Consortium showed that sequencing 426 individuals from 13 African countries resulted in the discovery of over three million novel genetic variants. This implies that we haven’t even scratched the surface of discovering the clinically important variants from those of African and other non-European descent.

5 ways to address health disparities in precision medicine 

So what can be done to address the critical issue of underrepresentation in genetic databases? Here are the key areas that I believe will lead to change:

1. Proactive recruiting.

Genetic researchers should be proactively recruiting underrepresented populations for future studies. This will require some non-traditional methods of recruitment into the studies,including engaging key community stakeholders and building trust in historically mistreated and underrepresented minority populations. Initiatives must also include community outreach and education (e.g., the creation of multilingual recruitment materials). Without this, there is no way we can make precision medicine equitable.

2. Do the right studies.

A continued and concerted effort is needed to conduct studies that address specific underrepresented populations, similar to the methodology in the H3Africa study mentioned above. We must take a systematic approach to ensure that the entire global population’s genetics are appropriately and proportionately represented in genetic databases.

3. Create incentives.

Government funding agencies must build incentives for those who are recruiting and researching diverse cohorts. This includes the rebalancing of research funding for minority scientists.

4. Increase private sector investment in minority founders.

Important efforts to build non-Eurocentric genetic databases may actually come from the private sector, similar to the approaches that 23andMe and 54Gene are taking. However, implementing this on a larger scale would require a significantly increased level of investment into Black American and Latinx company founders, who received only 2.6% of all VC investments in 2020.

5. Build diverse leadership.

Both academia and the private sector must actively recruit diverse leadership teams—not just as entry-level and mid-level managers, but also in leadership roles, in the C-suite, and on boards of directors. Diverse teams are better at decision making, better at brainstorming, and better at creating products that represent a bigger proportion of the population.

We must do better

In 2020 and 2021, the murders of George Floyd, Breonna Taylor, Ahmaud Arbery, and several other Black Americans, along with hate crimes against Black and Asian communities—and in conjunction with the ongoing COVID-19 pandemic—have shone a spotlight on systemic racial disparities and inequities, which are also inherent in our healthcare system. European bias in genetic databases has huge implications for the health of individuals of non-European descent. It has the potential to contribute to decades of health disparities if we continue down this path. Without the changes outlined above, the genetic data we use to create the next generation of diagnostics, disease risk assessments, and therapeutic interventions will continue to make precision medicine available only to those of European descent. If we don’t address this now, history will hold us accountable.

 

At MDisrupt we believe that the most impactful health products should make it market quickly. We do this by uniting digital health companies with experts from the healthcare industry to help them accelerate their time to market responsibly.

Our expert consultants span the healthcare continuum and can assist with all stages of health product development: This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product, talk to us.

The Pandemic Fast-forwarded Digital Health. What’s Next?

The Pandemic Fast-forwarded Digital Health. What’s Next?

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The Motley Fool recently interviewed Ruby Gadelrab, MDisrupt’s CEO and founder, about the most important 2021 trends in digital health.

MDisrupt Videocast

Motley Fool: Why don’t we start with a brief introduction about you and MDisrupt?  

Ruby Gadelrab: I have been in the biotech, healthcare, and digital health industry for about 24 years on the commercial side in various marketing and executive roles. I have worked at some notable companies in the space, including Affymetrix (now part of Thermo Fisher Scientific) and Invitae, a genetic information company. My last employed role was VP of commercial marketing at 23andMe.

Before founding MDisrupt 18 months ago, I consulted for two years for about 25 digital health companies, and I started noticing a pattern. I realized that these companies were seeking experts that understood the healthcare ecosystem. And these experts are hard to find.

MDisrupt is a platform that connects the digital health industry to the scientists and healthcare industry experts that they need to build, commercialize, and scale a health product both quickly and responsibly.

We currently work with a variety of experts including physicians, health system leaders, scientists, health economists, behavioral scientists, and lab operations and commercialization specialists.

Rapid innovation

Motley Fool: Let’s start broadly by looking at the digital health space. What were some of your most interesting observations in this space in 2020?  

Ruby Gadelrab: Let’s start by defining what digital health is. Digital health is defined as the use of digital technologies and genomics to solve key problems in healthcare. So think algorithms, AI, data analytics, wearables, apps, telemedicine and virtual care, genetic tests and personalized medicine solutions. Healthcare typically has been slow to adopt digital health. Many of these solutions existed before the pandemic but struggled to get adoption.

So the high-level observations in 2020 as the pandemic hit us are these: The pandemic revealed how unprepared our healthcare system is for an event of such magnitude. The pandemic also revealed many of the inequity and access issues around health and digital health.

BUT there are silver linings. There is a fast forward button pushed on digital health and there are three themes:

  • Investments – It was the highest-ever year in digital health: According to Rock Health there were $14B of investments in digital health in 2020—an increase of 72% over the previous landmark year of 2018.
  • Speed of innovation – The FDA has issued over 300 emergency use authorizations for tests and devices during this pandemic. Many digital health companies quickly pivoted to create solutions for COVID-19. One example that’s particularly relevant at this stage of the pandemic is Clear Labs. They developed a fully automated platform that can screen and sequence the SARS-COVID virus in under 24 hours. Now, with the new mutant strains of the virus, this is particularly relevant for epidemiological applications in monitoring and surveillance.
  • Adoption of telehealth and virtual care – This is an example of a technology that had been around for years but there was a reluctance about adoption—because of privacy issues, and because the Centers for Medicare and Medicaid Services (CMS) was only reimbursing telehealth visits in certain circumstances, for example in rural areas. But the pandemic forced patients, providers, and payors to experience different ways of delivering healthcare. In March of 2020, CMS reported that telehealth visits jumped from 10,000 per week to over 300,000.

Beyond COVID

Motley Fool: How do you expect those trends to evolve in 2021?  

Ruby Gadelrab: For telehealth and virtual care, this is just the beginning. Providers and physicians experienced the comfort and convenience of delivering care from their homes. That trend will continue, especially now that CMS has released a policy showing that over 60 new telehealth services will now be reimbursed by Medicare.   

Often when we think about telehealth we think of primary care services, but actually I think it will extend into areas of specialized care.  One of our clients innovating in this area is Genome Medical. This is a genetics-focused medical practice that’s delivered by telehealth. They are  democratizing access to the very limited number of genetics experts in the country. 

For sure there will be more COVID solutions. 2020 was about getting tests and vaccines out quickly, but 2021 will be more about back-to-work solutions. For example, Mesa Biotech built a point-of-care system that does rapid PCR of COVID and provides results in about 30 minutes outside of a lab setting. This is important as we consider back-to-work solutions and ways to bring testing closer to the consumer in the workplace or in retail pharmacies, for example.  They were actually acquired by ThermoFisher recently for $550M. Many of these companies are thinking about the world beyond COVID. What they can do for COVID they can potentially do for other infectious diseases, too.

There will also be increased demand for at-home testing and monitoring solutions. Throughout the pandemic, we have seen states struggle to deliver COVID-19 testing efficiently. They have faced challenges with test availability and distribution as well as long turnaround times. And as we see new surges in infection rates, these problems have worsened. 

Everlywell is one of our clients at MDisrupt and is an interesting example in this category.

Their mission was to democratize and simplify the lab testing process and get high quality lab testing straight into the hands of consumers with applications such as A1c, hormone testing, etc. In May, the FDA issued an emergency use authorization, making Everlywell’s test the first stand-alone at-home sample collection kit for COVID-19 and making them the first digital health company to receive an EUA.   

Everlywell has now shipped more than a million COVID-19 test kits, validating both consumer demand for at-home testing and consumer willingness to self-pay for diagnostic testing, In November Everlywell raised $175M to expand its consumer lab testing and digital health offerings and now has a valuation of $1.3 billion. 

Delivering better engagement

Motley Fool: You worked at 23andMe in the past and with Everlywell during the pandemic. What’s your future vision for the genetic testing industry? Are we just now seeing the tip of the iceberg on what value can be unlocked with this kind of innovation?

Ruby Gadelrab: What companies like 23andMe and Everlywell have done is demonstrated a few things that are critically important to the future of healthcare as a service:

  • That consumers and patients can effectively collect a sample at home and ship it back to the lab.
  • That consumers can accurately report phenotype data.
  • That a segment of the population wants direct and easy access to its health information and is willing to pay for it.
  • That they can deliver engaging consumer experiences and engage consumers in conversations around their health before they get sick.

In essence, what they have built is a novel way of delivering healthcare information and patient engagement experiences. And, quite frankly, it’s a much better experience than what we can get from our healthcare system.

So I think the future of this space largely depends on who is willing to pay for this type of access, experience, and convenience. For sure there are segments of consumers who are willing to pay. But if companies like these can generate data to showcase improved outcomes, then there are potentially new stakeholders willing to consider paying for solutions like this, including employers, payors, and some health systems.

An example of this is Renown Health in northern Nevada. They launched the Healthy Nevada project where they offered patients in their system free genetic testing at home. They have had over 50,000 patients from within their system sign up and get access to their genetic test results.

Addressing health disparities

Motley Fool: The pandemic has revealed inequity in every corner of the world and revealed many health disparities. What did the pandemic teach you about the US healthcare system and what solutions might be effective?

Ruby Gadelrab: The pandemic was like putting a magnifying glass over our health system and showcasing the biggest gaps and health disparities. Everything from the most vulnerable populations contracting COVID at a higher rate to vulnerable populations suffering more severe symptoms when they contracted COVID, to who had access to testing if at all.

We saw that Black and minority populations were particularly impacted. And this started the big and tough conversations about ALL the disparities in health.

A couple of examples—most of the largest genetics databases are based on Caucasian populations. These databases are now being used to create diagnostic tests and therapeutics. Some of these innovations just won’t be as effective when you use them on minority populations. Second example—many wearables use a particular type of light to monitor heart rate. This type of light is not as accurate on people with darker skin tones. So when we think about wearables being used in a medical setting to monitor cardiac issues, these are the types of things we have to take into account.

One company innovating in this area is 54gene. They are building the world’s first biobank based on African genomes. Their goal is to close some of these gaps in health disparities by ensuring that people of African descent, globally, will be represented in the next generation of diagnostics and therapeutics.

Of course the discussion about health equity extends beyond race and into many other minority areas. Are we doing enough for women’s health? For eldercare? For the LGBTQ community? Clearly the one-size-fits-all model of healthcare isn’t working. It has to get more personalized and it has to address underserved populations by understanding their needs and their unique challenges.

One positive thing that has come from the pandemic is that there is a renewed focus on this, from investors and digital health innovators alike. We are seeing a new class of investors emerge who want to invest in minority founders building health companies that can address some of these issues.

Key steps for digital health

Motley Fool: A lot of your work with MDisrupt is advising and consulting with digital health startups. What do you tell them about competing with the big tech giants getting involved in healthcare? What competitive edges do smaller health-specific startups have over the Amazons and Microsofts of the world? 

Ruby Gadelrab: Building health products that scale is really hard. And it’s hard, it’s expensive and it takes time, for everyone, whether you are a big tech company or a smaller digital health company. This is for a few reasons:

  • The user, the influencer, the payor, and the consumer of health products are each different stakeholders with different incentives.
  • Healthcare is highly regulated and the regulations in each country and sometimes in each state are different.
  • You can’t test and iterate quickly like you can in tech. You need to do the studies to generate evidence to prove that your product is safe, effective, clinically useful, and that the economics work. These studies can often take many years.
  • You have to find your earliest adopters in the healthcare world. That often involves building expensive specialized sales teams and deploying KOL programs.
  • You have to get your product reimbursed and engage the medical community and medical societies.

These considerations apply to everyone, whether you are Amazon or Microsoft or smaller companies. So my advice:

Since it’s impossible for one company to solve all of healthcare, pick a specific niche area that you know really well. If you don’t know it through experience, engage healthcare experts. Ideally, hire a chief medical officer (CMO) that really knows the space and the problem you are trying to solve, and engage your target audience early and often.

Figure out early who you expect to be using the product and who is paying for it—because the type of product and commercial strategy you may build if a consumer is paying for it may be vastly different than if you expect it to be used in a healthcare setting.

Do not skimp on regulatory or evidence generation. This is an area where there are no shortcuts. The studies are critically important at every stage of commercialization. You need them to work with regulators, to convince physicians to adopt your solution, to engage medical societies and to build the dossier you need to convince payers to pay for it.

Four ways to improve outcomes 

Motley Fool: We’ve seen certain healthtech companies be successful by occupying a niche where there are inefficiencies, and using technology to create value by streamlining or simplifying. What areas in the health space are still ripe for disruption? 

Ruby Gadelrab: The $3.5T healthcare industry is ripe for digital disruption. Healthcare is at an inflection point. It’s changing from being transactional when you are sick, into an ongoing service designed to keep you healthy.

The health system of the past 100 years wasn’t about health or care. It’s effectively a sick care system. We need a health system that starts to take care of people before they get sick—outside the walls of a hospital and more in their daily lives, by continually engaging with consumers BEFORE they become patients.

The changes over the next few years will be driven not only by technology but also by how it’s going to get paid for. We are moving from a fee-for service system (where more procedures makes more money) to a value-based care system where health systems and providers are reimbursed by better outcomes.

So for digital health companies to be successful they need to demonstrate that they can improve outcomes. And typically these fall into one of four categories:

  • Health outcomes—Can we predict and prevent disease or do a better job of managing it outside of the health system if it occurs? Medication compliance?
  • Patient and physician experience—Are there solutions that improve the experience for both?
  • Access—Can we simplify access to delivering healthcare for more people when they need it, either inside and outside of a healthcare system?
  • Reducing costs—Can we create efficiencies in the health system or a clinical workflow that can increase productivity or reduce costs?

At MDisrupt, when we work with digital health companies we encourage them to think about which of these four problems their solution addresses, and how to generate the evidence to showcase this.

The best way for companies to do this, in my opinion, is to ensure that they engage scientists and health industry experts early and often throughout their product development. Clinicians understand the healthcare system, they see the problems and they know what the effective solutions need to be—and they can add tremendous value to digital health companies.

Connecting truth-seekers to talent 

Motley Fool: Let’s talk about the medical diligence part of MDisrupt. Diligence is important for investors in any sector, but in healthcare, the stakes can be life and death. Of course, investors can only base their decisions on information the company makes available, and we’ve seen instances of management either withholding certain material info or even outright lying at what its technology is capable of. What have you learned about medical diligence and how can investors have more confidence in a company by harnessing this knowledge? 

Ruby Gadelrab: This was a really interesting experience for us when we first founded MDisrupt. Investors weren’t really our first customers.

What we found early on is a breed of digital health companies where the founders were truth seekers and determined to create impactful, responsible health products and get them to market quickly. Many of these founders had business or tech backgrounds. They understood that access to health industry expertise was critical to their success and yet that talent is relatively hard to find. They were asking us for chief medical officers, regulatory experts, health economists, lab scientists, product managers and behavioral scientists.

At the same time, we were inundated with hundreds of messages from scientists, clinicians and other health industry experts asking us how they could get involved in lending their expertise and knowledge to digital health companies. We quickly realized we needed to build a platform that could connect digital health companies to the experts.

I guess like other start-ups in this space, finding true product-market fit is when the market pulls you in a specific direction. So that’s where we focus now, on helping the digital health companies connect to the experts so they can get to market quickly and responsibly.

Of course, if investors want access to our experts to help them diligence their investments for clinical and commercial viability, we are more than happy to help them too.

Motley Fool: The pandemic has revealed inequity in every corner of the world and revealed many health disparities. What did the pandemic teach you about the US healthcare system and what solutions might be effective?

Ruby Gadelrab: Here are the top trends we see at MDisrupt:

  • Telemedicine and virtual care
  • New Covid solutions focused on getting back to work
  • At-home testing and monitoring solutions
  • Behavioral and mental health solutions
  • Femtech
  • Teams which have a good balance of tech and healthcare folks.

At MDisrupt we believe that the most impactful health products should make it to market quickly. We help make this happen by connecting digital health innovators to the healthcare industry experts and scientists they need to responsibly accelerate product development, commercialization, adoption, and scale.

Our expert consultants span the healthcare continuum and can assist with all stages of health product development: This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product, talk to us.

Where is DTC Healthcare Headed? Lessons from 23andMe’s SPAC IPO

Where is DTC Healthcare Headed? Lessons from 23andMe’s SPAC IPO

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MDisrupt CEO and founder Ruby Gadelrab shares her insights in a recent Clubhouse MedTech interview with Henry Peck. Ruby has worked on the commercial side of biotech, healthcare, and digital health for 24 years. She founded MDisrupt to connect digital health innovators to the healthcare industry experts and scientists they need to responsibly accelerate product development, commercialization, adoption, and scale.   

Henry Peck: Let’s talk about 23andMe. What role did you play there and what were the key challenges you were trying to solve for the business?

Ruby Gadelrab: First, some disclaimers—I left 23andMe four years ago. So I’m not speaking on behalf of the company. The opinions are my own as an industry observer.

I was hired at 23andMe just after the FDA had told them they had to temporarily stop selling health products to consumers. My role was to help them figure out some of the non-consumer business models. These included:

  • 23andMe for medical professionals. How do we educate and engage medical professionals on genetics and the reports that 23andMe were providing?
  • 23andMe for educators. Could a genetic test be used to teach university and medical students about genetics, statistics, and ancestry better than a textbook could?
  • 23andMe for research. How could the 23andMe experience be used in a research setting to improve recruitment in population health studies? For example, by giving people interesting data about their ancestry and eventually their health, can we improve recruitment and longer term engagement?

How 23andMe broke new ground

Henry Peck: In your opinion, what makes 23andMe’s product offering so successful and “sticky”?

Ruby Gadelrab: Let’s break this question down into two parts—why is it successful and sticky to consumers, and then secondly why does it have huge potential as a business.

Let’s start with consumer experience. Every aspect of our lives has been digitized through technology. Healthcare is undergoing that same revolution. 23andMe was the first company to work closely with the FDA to create a product that consumers could buy directly themselves that gave them personalized insights from their genetics about their health and ancestry. Over 10 million people bought the product and clearly, ancestry was one of the killer apps, but consumers also had an interest and hunger for health information and trait information.

23andMe made that information really easy and engaging for consumers to understand and interact with. They made the information digestible at an eighth grade literacy level and they explained complex genetics concepts simply enough for people to understand.

23andMe gave consumers the ability to participate in research for causes and diseases that they really care about. During the time I was at 23andMe over 80% of consumers were consenting to research.

Business value

Henry Peck: So what does that mean in terms of value to the business?

Ruby Gadelrab: 23andMe has one of the largest genetic databases in the world, with over 10 million people genotyped and consented to research. An individual genome isn’t really that useful unless it’s paired with phenotype and/or clinical information and aggregated with millions of other genomes so that we can see the patterns and discover new genes that are important for diagnostics and therapeutics.

What’s unique about 23andMe is that the database is recontactable and engaged and the company has the ability to collect additional phenotype data—I believe they currently have over 30K phenotypic surveys completed daily. Effectively, they have built a crowdsourced research platform where you can quickly make novel discoveries which can be applied to building new generations of therapeutics and diagnostics.The value they add to research is clearly recognized by pharma. Drug development is a long and expensive process. That’s because:

  • It takes 7-10 years to bring a drug to market.
  • 90% of drug candidates fail.
  • $2.6B is the average cost of getting a drug successfully to market.
  • It’s incredibly difficult to recruit patients into clinical trials and engage them for the life of the trial.

How do we create efficiencies in this process? The theory is, with the combination of genotype/phenotype data and a recontactable database, can you accelerate the pace of novel drug discovery? Find new drug targets and bring them to market faster? 23andMe has a partnership with GSK where they currently have over 30 therapeutic programs in the areas of oncology, cardiovascular disease, immunology, neurology, and metabolic disease, so clearly pharma sees the potential of such an asset.

4 keys to health product success

Henry Peck: Let’s talk about 23andMe’s recent announcement. How do you think this next step will change the company and their business? Any bold predictions for the future of 23andMe?

Ruby Gadelrab: Despite the numbers, the genetics industry is still in its infancy. And it’s still not a routine part of our healthcare system. Our healthcare system as it stands today is neither about health nor about care—it’s actually a reactive sick care system.

One of the few silver linings of the COVID-19 pandemic is that It showcased the huge gaps in our healthcare system that are ready to be addressed by those who are daring enough to try and disrupt it. Effectively, the pandemic pushed the fast forward button on digital health adoption. And one of the biggest gaps that was revealed is the problem of access.
Everyone from within the health system and outside of it recognizes that it has to change—we have to:

  • Improve access to health information and health services
  • Build solutions that can predict and prevent disease before people ever get sick and deliver the right interventions to the highest risk populations at the right time
  • Have a more holistic view of individuals’ genetics, lifestyle and behavioral data as well as social determinants of health in order to figure out what the right interventions are and who needs them most urgently
  • Develop tools for individuals to have all their health data consolidated in one place.

At MDisrupt we see many digital health companies trying to address some of these challenges. We work with them to identify which problems they are trying to solve that matter to the current healthcare system. So generally for a health product to be successful and gain widespread adoption it has to improve one or more of these four areas:

  • Health outcomes
  • Experience—for patients and for physicians
  • Access to healthcare products or services
  • Reducing healthcare costs.     

When I think about how companies like 23andMe have played a role in this (beyond therapeutics, which we already talked about), here’s what comes to mind:

  • 23andMe has built a platform that provides easier access for consumers to gain insights about their health.
  • They have built an experience for consumers to engage in conversations about their health often before they are patients—and this experience is more engaging than what we currently see from our health systems.
  • The previous generation of genetic tests focused on inherited rare diseases that affect 1% of the population.
  • The next generation of genetic tests will focus on common chronic diseases that affect many of us, such as diabetes, cardiovascular disease, hypertension, and obesity. 23andMe’s genotype/phenotype database gives them the power to develop this new class of tests known as polygenic risk scores.

One caveat to this is that these types of tests are difficult to get to market as hey require huge datasets, the studies are complex because many of the diseases are impacted by lifestyle and behavioral factors, and how these products will get through regulatory is still to be seen.

Why building health products is a marathon and not a sprint

Henry Peck: 23andMe has been one of the flagship companies in direct to consumer (DTC) healthcare. Talk to me more about this space.

Ruby Gadelrab: Building health products is hard, it’s expensive and it takes time. You have to be in it for the long term. It’s hard for a number of reasons.
In healthcare, the user, the influencer, the payer, and the consumer of the product are often completely different stakeholders with completely different incentives, so that’s a really tough challenge.

It’s a really highly regulated space and the regulation is not just per country, it’s potentially per state as well. When you’re thinking about building a health product, you have to think about the regulatory process countrywide and statewide. Your regulatory strategy also deeply impacts your commercial strategy—the type of product you would build for a DTC market is potentially different to what you would build if you want the healthcare system to adopt it.

Unlike tech, in health, you cannot test and iterate quickly. You need to do the studies to generate the evidence that your product is safe, is effective, is clinically useful, and that its economics work, and these studies can take many, many years.

When you start the commercialization process, you have to find your earliest adopters in the healthcare world, which involves building specialized sales teams and deploying expensive KOL (Key Opinion Leader) programs,
Finally, you have to get your product reimbursed and engage the medical community.

Digital health innovators: Don’t skip these steps

Henry Peck: What are the key challenges in DTC? What do you absolutely HAVE to get right in DTC?

Ruby Gadelrab: These three areas are critical:

Regulatory and Evidence Generation
For ANY health product the two things that are most critical are regulatory and evidence generation. No one should skimp on those. If you really want to disrupt healthcare this is the key differentiator. Quite frankly, there is a lot of nonsense out there disguised as health products and your studies and regulatory strategy is what will differentiate you from the nonsense and stop you getting in trouble. The advice I give all digital health companies is to hire a CMO (Chief Medical Officer) even if part time, because they will help you with the evidence generation and staying on the right side of regulatory.

Understand User Acquisition
People underestimate the cost of user acquisition. It’s very expensive to acquire consumers for health products, especially when most people are used to health products being covered by insurance. To be clear, I am a firm believer that there is a self-pay market for access and convenience, but it’s a subset of the market. I see this a lot where companies start out DTC, then realize how hard and expensive it is, and then want to pivot to B2B2C—where they want to work with health systems, employers, providers etc. So, back to my earlier point—to do that you need to make sure you have the right regulatory strategy and have done the evidence generation to allow you to make that pivot.

Bring Healthcare Providers into the Experience
Many DTC companies are improving the access to and experience of health products—and we love this democratization of health products. HOWEVER, part of the consumer experience has to be bringing healthcare providers into the fold. Think about the scenario where a consumer orders a test at home or uses an app or wearable to track their health data and that consumer takes that report to their physicians who has never seen it, has no idea why they ordered it and they ask the consumer, “What is this crazy thing you ordered off the internet?” That ruins the consumer experience.

The way around this is to engage healthcare professionals early on in your product development, so they can help you build products that are clinically useful even if they are for a consumer market. They will be your advocates later. Then, when your product is on the market, provide education for healthcare providers who may see your consumers. Educate them on your product with data and studies. This will massively help with the consumer experience and you won’t spend ridiculous amounts of money calming the naysayers.

Innovators to watch 

Henry Peck: Who are some of the leaders and “up and comers” in the space, in your opinion?

Ruby Gadelrab: It’s companies creating DTC health products that are taking an evidence-based approach that democratize access and improve the experience of healthcare products and services responsibly. And they are even better if they can demonstrate that they can improve health outcomes and reduce healthcare costs.

  • At-home lab testing. I think Everlywell and Modern Fertility are fascinating in that they massively improve the access to and the experience of a traditionally cumbersome process.
  • Liquid biopsy for early cancer detection, particularly patient-initiated (not DTC, but easy access). There are so many digital health companies innovating in this area: Grail, Exact Sciences, Guardant Health, Freenome, just to name a few.
  • Femtech. Women’s health has been neglected for far too long. Everyone thinks Femtech is just about fertility but it goes beyond that into hormone testing, sleep, diet, menopause, endometriosis, and so much more.
  • Apps and wearables that help with at-home patient monitoring. I like OneDrop. It’s a diabetes product that uses a data-driven approach to measure blood glucose levels with coaching and data.
  • Mental and behavioral health apps that combine technology with coaching experts.

Henry Peck: What types of technologies/businesses can we expect to see with the rise of DTC?

Ruby Gadelrab: Some products are DTC and some products are easy-access, where a physician network behind the scenes orders the product. Telehealth is the key technology that can power this. Telehealth and virtual care are big areas by themselves but they also power some of these products that appear to be DTC.

Health data analytics companies are generating huge amounts of data. How do we make sense of it all into something that’s clinically useful?

I think there is also potential for a company to create a space for providers and consumers to learn about digital health products and the evidence behind them. This is one of the things we are working on at MDisrupt.

At MDisrupt we believe that the most impactful health products should make it to market quickly. We help make this happen by connecting digital health innovators to the healthcare industry experts and scientists they need to responsibly accelerate product development, commercialization, adoption, and scale.

Our expert consultants span the healthcare continuum and can assist with all stages of health product development: This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product talk to us.

Six Things Healthtech Founders Should Know When Building Health Products

Six Things Healthtech Founders Should Know When Building Health Products

[Updated 10-27-21] Healthtech is a fast-growing industry in which technology (wearables, apps, cellphones, databases and software) is used to solve problems in healthcare around improving access, productivity, delivery and quality of care as well as potentially reducing costs. According to Rock Health, in the first half of 2021, $14.7 billion was invested in healthtech in the U.S. alone.

However, healthcare product development is hard and very different from tech product development. Many innovators from the tech world are flocking to the world of healthcare and attempting to disrupt it through their innovations. There are well-established steps for building health products that scale. What are the key things that healthtech entrepreneurs should know as they navigate this complex industry?

1. Understand healthcare’s many stakeholders.

Within the healthcare ecosystem, there are many stakeholders; often, the user, influencer and payer are not the same people. When building a health product, it’s important to understand from the beginning who the stakeholders are and what they value. You should map out who will use it, who will pay for it and who will make the decisions to implement it because this will have a direct influence on what you build, what features it will have and what the value proposition will be. Some key stakeholders include:

  • Providers: The doctors, nurses, pharmacists, dentists, radiologists, surgeons and other practitioners who are licensed to deliver care to the patient.
  • Health System: An organization or a group of organizations that is responsible for delivering primary and secondary care to a target population.
  • Payers: A company that pays for medical services. Insurance companies are the most common type of payer. In the U.S., these fall into one of three categories: commercial, private and government.
  • Employers: The largest purchaser of health insurance, covering more than 55% of Americans.
  • Patients: The ultimate consumers of healthtech and healthcare products and services.

2. Solve a real problem.

Many of today’s healthtech products started as a technology discovery that was then applied to healthcare to try to solve a problem. Often, this is merely a perceived problem because the founder’s limited experience of the healthcare ecosystem means that they haven’t understood their target audience and the audience’s clinical workflows, intent or guidelines they follow.

The way many healthcare stakeholders think about this is that they look for solutions that generally solve one of these problems:

  • Does it improve patient health outcomes?
  • Does it reduce healthcare costs?
  • Does it improve the patient and physician experience?

It’s important that your product solves real problems in healthcare, and the best way to do this is to consult health industry experts and deeply understand your audience.

3. Generate evidence to convince skeptical audiences.

Evidence generation is one of the most critical steps in building health products. Firstly, people’s lives are at stake, so it’s important to demonstrate your product is both safe and effective.

Secondly, you have to convince doctors to use it. Doctors can be the world’s most skeptical audience, partly because they are scientists at heart and partly because they took an oath to “do no harm” and they genuinely care about doing the best for their patients. In addition, medicine is one of the most litigious industries.

Data, publications and recommendations from medical societies will likely convince doctors to routinely adopt your product in their practices.

4. Ensure that the economics work.

Evidence generation is important not only for providers, but also to convince payers to reimburse your product. Payers and employers will need to be convinced of the financial advantage of utilizing your technology. They will want to know:

• How much does it cost compared to what they are currently doing?

• How much will it cost to implement the solution in its entirety (switching costs, training costs, etc.)?

• How much will it save the healthcare system and over what time frame?

• Does the cost of the solution plus the implementation provide a compelling ROI over a reasonable amount of time?

This is where the skills of a trained health economist come in. Health economists are trained to do health economics and outcomes research. They help compile the dossier with models that you will need to present to payers.

Like all other types of business, even if you have the best product to solve the biggest problems, if the economics don’t work and you can’t convince someone to pay for it, it’s nearly impossible to scale.

5. It’s a marathon, not a sprint.

Most entrepreneurs who build health products and expect them to scale in a healthcare setting have to be in it for the long haul. It can take 10-15 years to get widespread adoption of a health product, including the time to complete all the studies necessary to generate the evidence to convince providers to adopt it and payers to pay for it. This is very different from the tech world, where products can scale and exit within five years.

Often, good healthtech companies run out of money and time before they can fully scale. For example, clinical studies from a healthtech company called Lantern were just recently published, two years after the business folded and sold its IP.

6. Pick the right investors.

To the point above, it’s important that healthtech founders choose their investors wisely — the ones that understand the time and money it will take to successfully build and scale a health product and have realistic expectations. The studies and regulatory processes may take years, and revenue and exit expectations should be adjusted accordingly.

There is no doubt that healthcare is ripe for disruption through technology, and there is no shortage of talented entrepreneurs to catalyze this disruption.

FBC-Badge-2021

First published in Forbes Business Council.
Ruby Gadelrab Forbes Councils Member

ruby.gadelrab

Ruby Gadelrab, CEO + Founder, MDisrupt

Ruby Gadelrab is a seasoned health executive with a track record in successfully commercializing healthcare and healthtech products. Her expertise lies in developing high-impact B2B and B2C marketing, branding, and commercial strategies. Ruby served on the executive team at 23andMe as vice president of commercial marketing and has worked for many leading companies in the biotech and genetic spaces. Before founding MDisrupt, Ruby consulted for, advised, and mentored more than 25 companies in the healthtech space.

At MDisrupt we believe that the most impactful health products should make it market quickly. We do this by uniting digital health companies with experts from the healthcare industry to help them accelerate their time to market responsibly.

Our expert consultants span the healthcare continuum and can assist with all stages of health product development: This includes regulatory, clinical studies and evidence generation, payor strategies, commercialization, and channel strategies. If you are building a health product, talk to us.