Ruby Gadelrab - MDisrupt

The Theranos Verdict: In Healthcare, Money Should Follow Science

by Ruby Gadelrab | Jan 5, 2022

MDisrupt CEO and founder Ruby Gadelrab on the best way for investors to avoid Theranos-style mistakes

“Move fast—responsibly.”

Silicon Valley has become known for its’ “go fast and break things” approach. But the core principle of healthcare is “do no harm.” However, one cannot safely, ethically or legally “fake it until you make it” when patients’ health and lives are at stake.

That’s one clear takeaway from the verdict that found Elizabeth Holmes, founder and former CEO of the health technology company Theranos, guilty on four counts of defrauding her investors about the company’s blood-testing technology.

From my perspective, it’s extremely unfortunate that Holmes was acquitted of four other counts of fraud involving patients who said they were deceived by Theranos’s claims. While investors were indeed deceived, they had the opportunity to look more closely at Theranos before investing. Patients who believed the company’s claims did not have that option. In this verdict, investors were vindicated, patients were not.

But in the rush to draw meaning from the verdict, let’s not assume that all digital health companies—or even most of them—are like Theranos. There are plenty of healthtech companies out there who are eager to go fast, responsibly—and plenty of investors willing to do the homework that Theranos’s investors skipped.

While healthcare is complex, highly regulated, and probably the hardest area in which to invest, there is a clear formula that investors can follow to avoid making costly—in every sense of the word—Theranos-style mistakes.

Invest in medical diligence

Investors routinely do technical and financial diligence using experts. When investing in healthcare technology companies, investors must also do medical diligence using healthcare experts. It’s a critical element of establishing whether a product is commercially and clinically viable.

The 5 elements of medical diligence

1) Does the technology actually work? This is often known as analytical validation or technology validation. Investors need to determine if there is evidence to back up the founders’ claims. And the marketing must be truthful. It is both unethical and illegal to overstate claims.

2) Show me the data! (Ask for the clinical validation data.) Does the technology actually pick up a disease or biomarker when it’s present—and not pick it up when it’s not there? Not all data are created equal. Good data are generated externally with scientists and research labs, great data are published in peer-reviewed journals, and excellent data are published and replicated. In the case of Theranos, every time they were asked for the data they claimed that they didn’t want to share their “trade secrets.” In healthcare you have to publish your studies and also submit them to regulatory bodies.

3) Evaluate the clinical utility. Ok, the technology works, and successfully detects what it is supposed to. But is the product clinically useful? Does it actually solve a real problem in healthcare or is it just technology for sake of technology looking for an application in healthcare? Will it actually change or impact the medical management of a patient? Is there buy-in from both health systems and healthcare providers?

4) Review the health economic data. How much does the technology cost to implement, and how much does it save the healthcare system compared to the standard of care? Will there be, or is there, Medicare, Medicaid, or private insurance reimbursement for the treatment or product?

5) Confirm legal and regulatory compliance. Has the founder evaluated all the laws and regulations that apply? Can the founders prove that the company and the technology are compliant with those laws? What is the reporting structure of the general counsel, the chief compliance officer, and/or the privacy officer? Are there any conflicts of interest with the same? Healthcare is one of the most regulated industries in the US, making healthcare compliance a crucial and growing field within the industry.

Look closely at company structure & culture

Make sure the RIGHT healthcare experts have a seat at the table and a strong voice in the process (and are not just there for show and credentials). There are a few important signals that can help investors determine whether this is happening.

For instance, does the company have physicians, scientists, or clinical experts within the team, or as investors? On the board of directors? What about as part of the C-suite or in senior positions? The most successful healthcare startups have a balance of clinical, commercial and tech skill sets. And ideally, a digital health company would have a chief medical officer and chief compliance officer on the executive team even in fractional roles. At MDisrupt, one of our specialties is matching vetted healthcare industry experts with digital health startups so they can access all the essential skills they need, on demand.

Company culture is also important. Talk to the employees—do they see a culture of silence and secrecy, or one of transparency and collaboration? One red flag: When there is high turnover in scientific, clinical, or compliance positions, a company is in trouble. (I know this because many such individuals join our expert network at MDisrupt. In fact, often the culture is so bad that they leave the company before they have other jobs.)

Don’t assume all healthtech startups are like Theranos

Every day I meet incredible truth-seeking founders and who are building life-changing health technology products. Unfortunately and unfairly, many are being greeted with skepticism in the shadow of Theranos—particularly women founders, lab testing companies, and companies focusing on point of care and blood collection devices. Yet all it takes is some medical diligence to be able to separate the truth-seekers from the rest.

Involve experts from the start

Engaging the right experts early and often in the development of a health product can be the key to adoption and scale within a healthcare setting. By building collaborative partnerships between digital health and health industry experts, we can get the best of both worlds.

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

At MDisrupt, we believe the health products with the most potential to do good in the world should make it to market quickly. We help make this happen by connecting ambitious digital health innovators to the healthcare experts who have the skills they need most.

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.

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

by Ruby Gadelrab | Oct 25, 2021

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.

Overly White Genetic Databases = Decades More Health Disparities

by Ruby Gadelrab | Sep 14, 2021

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.

MDisrupt’s CEO: Lessons from our 2nd Year & Trends for 2022

by MDisrupt Guest Author | Aug 20, 2021

MDisrupt is celebrating its second anniversary this week, and we’re speaking with the company’s founder and CEO, Ruby Gadelrab, about what she’s learned and where digital health is headed.

Listen Here

Solving the three pain points

MDisrupt: First, tell us about your path to founding MDisrupt.

Ruby Gadelrab: I spent 24 years in healthcare on the commercial side and eventually landed at 23andMe, as VP of commercial marketing. In three years there I really caught the bug for consumerized healthcare and digital health. I left 23andMe to help the growing number of digital health companies that were forming, and consulted for twenty-five of these companies back to back. I learned that these companies, as they bring their products to market, all have the same three pain points.

We built MDisrupt to help them overcome those pain points, which are:

How can digital health innovators access trusted health care operators who can help them build and commercialize their products?
As soon as a health product gets to market, how does a digital health company find its earliest clinical users? Who are those innovators within the healthcare system that are willing to try products early on?
How to quickly generate evidence to convince the variety of stakeholders that need to be convinced?

Our mission is to help the most impactful digital health products get to market quickly and responsibly.

Today, as we embark on our third year, I want to say a huge thank you to everybody who’s been involved in MDisrupt. We’ve built a network of over 200 health industry experts on demand. We’ve worked with over 40 clients already. And we have this network of incredible advisors who have been guiding us every step of the way. I could not be more grateful to the experts in our network, the clients who have trusted us with complex challenges, and the advisors who have guided us every step of the way.

MDisrupt: What are some lessons you’ve learned in growing MDisrupt through its second year?

Ruby Gadelrab: The top lesson is around trust. A few weeks ago, I interviewed Dr. Shantanu Nundy on Clubhouse and he said, “Healthcare moves at the speed of trust.” It’s all about trust with your clients, your community, your team, and your advisors.

Secondly, you have to build a team that shares your mission and can fill in your knowledge gaps. We’ve built a really incredible team to augment what I know and push the company forward.

The third lesson is the complexities of fundraising, which we started in the last couple of months. We’ve had some amazing interest so far, but fundraising is hard—and it’s really hard as a brown, female, first-time founder. But I’m really optimistic, because we’ve had some great traction and we see ourselves as building a scalable platform that can really help digital health companies accelerate their path to market.

Healthcare innovation is not optional—it’s an absolute necessity.

MDisrupt: What have you learned from MDisrupt’s health experts that has surprised you?

Ruby Gadelrab: I’ve been marketing and selling to scientists and physicians my whole career. Today, we are at an inflection point. Everybody I speak to is united in saying that innovation in healthcare is not an option anymore. It’s an absolute necessity.

There is a lot of focus on finding solutions around access to health care, improved health outcomes, simplified delivery of services, transparency, and convenience. And one of the challenges is, How do we build these solutions in an evidence-based way?

The incentives for each type of stakeholder are very different. For providers, it’s about maximizing their time, creating solutions that fit into their clinical workflows, and improving their patients’ experience. For payers, it’s about the economics. For patients, it’s about how to access healthcare simply, conveniently, and transparently. And for the digital health companies, it’s about scaling quickly and being the first disrupters in a very complex market.

The big challenge is, How do we create solutions that address the incentives for everybody in that ecosystem? How do we do it cost effectively, responsibly, and in a way that scales? These are the challenges I think we’ll see solved over the next 10 years.

A new breed of clinician

MDisrupt: What are some characteristics of the people who have joined MDisrupt this year?

Ruby Gadelrab: A lot of the experts who have joined us have experience in building health products. That’s one of the key features of the MDisrupt health expert network—it’s made up of people who have done this before and really understand the challenges.

We’re also seeing a new breed of clinician. These clinicians have been in practice for many years, and see the need for change through innovation. They want to get involved with digital health companies, they want to be medical advisors, and they want to have a say in building products and in how the products are presented to their peers.

These physicians hold the power to change the healthcare system from within. I want to help them understand their power, so they can work with digital health companies so we can get those solutions into healthcare faster.

Secrets of digital health success

MDisrupt: When you look at successful digital health companies, what are they doing right?

Ruby Gadelrab: First, they engage clinical experts early and often throughout the process of developing a health product.

Second, they take their regulatory and evidence generation very seriously. They don’t skip steps, and they go very deeply into figuring out the appropriate regulatory path and generating the right evidence to convince the various stakeholders.

Third, they build balanced teams. Building health products requires careful orchestration between technical, commercial, and clinical teams, and I think some of the best companies we’ve seen have got a great balance between those three areas.

MDisrupt: In our webinar next week, we’re talking about why it can be important, early on, for a digital health company to hire a chief medical or scientific officer. What’s your view on that?

Ruby Gadelrab: It’s really important. It helps you build the right product from the start, and save a ton of time and money by not making mistakes. For example, we see a lot of companies who have a technology, and they’re trying to back it into a problem—but it doesn’t actually solve a clinical problem. So having people who really understand clinical workflows and what physicians are looking for can add huge value.

Physicians are some of the most skeptical audiences in the world, but they listen to their peers. And I think chief medical officers, chief scientific officers, and medical affairs teams are really the key to communicating with those communities. Even if it’s a part-time role, chief medical officers are worth their weight in gold and can be the difference between success and failure in getting a health product adopted.

The need for standards

MDisrupt: What are some of the biggest challenges you see in the digital health industry as a whole?

Ruby Gadelrab: There was an article out recently from IQVIA that said there are 350,000 digital health apps in the market, and 250 new ones come out every day. How do we, as consumers or providers, know what’s good? There is no systematized way of identifying what the standards are. If you have a choice of five different genetic tests, which one is right for you? So I think there need to be some standards and transparency around the standards. And I think it’s really important that we bring some of the clinicians along with us in that journey around how that data is generated, how they use it in their clinics.

One thing we would like to do over time is to develop the standards for digital health—to organize the world’s digital health products by performance and create transparency, so people can make the right decisions.

The final challenge is around the cost and time it takes to commercialize a health product. In the consumer world, we can build and commercialize and scale a product within five years. In healthcare, it’s different—the evidence generation by itself takes longer, and the amount of time and the cost in convincing the stakeholders to get widespread adoption is much longer. I think it’s important for innovators to be realistic about what it takes to scale a health product.

Looking ahead

MDisrupt: What do you think is in store for digital health in 2022?

Ruby Gadelrab: I wish I wasn’t saying more COVID solutions, but it will be more COVID solutions because we’re not nearly out of the pandemic yet. With the delta variant, there are going to be more options for testing. I hope over the next year or so, we’ll be thinking about some of the back-to-work solutions for COVID. And I see more healthcare from home solutions, whether that be at-home testing, remote patient monitoring, telemedicine. Many chronic conditions are a function of lifestyle and social determinants of health, so I see a lot of solutions coming around mental health, cancer, cardiovascular disease, addiction, and diabetes.

MDisrupt: This time next year, what do you think we’ll be saying about MDisrupt?

Ruby Gadelrab: I think we will have built out our community of experts to be even bigger and broader. We will have served more truth-seeking clients who are bringing game-changing innovations to healthcare. I think we will have raised our first institutional funding and we’ll hopefully be celebrating with our investors at that point. And I think we will have some new solutions for our digital health clients around how they find their earliest clinical adopters and how they generate evidence. I hope we’ll be celebrating all of that!

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

by Ruby Gadelrab | Feb 19, 2021

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.