International CES 2015

January 8, 2015; Las Vegas, NV; Day #2; Highlights – Draft

Executive Highlights

The two-day Digital Health Summit wrapped up today, marking the sixth iteration of the event and its largest attendance ever (though a noticeably lighter crowd today). All of the sessions ad panels were recorded and will be available within a few weeks on www.digitalhealthsummit.com - we’ll keep you updated on this!

Much of today’s content felt repetitive from yesterday, with speakers citing the same barriers and similar off-the-charts excitement for the future (though again, much less excitement for the present – there’s been greater acknowledgement this year about how long things take). It’s even more clear to us this year that a lot has to improve to make digital health relevant and meaningful in the medical system, not just a consumer wellness fad for 10,000-step-per-day junkies and people who like to track their own data. The three biggest obstacles, from listening to the speakers and thinking more about previous years’ learnings, are:

  • Provider adoption – Will this make my life easier and save me time? Will I get paid for engaging with this? Will this make my patients healthier? (Providers are being inundated on data requests already [prior authorizations, electronic health records, more email / texts from patients] – this appears to show no signs of abating)
  • Patient adoption – Is this meaningful, motivating, and fun? Is it making me healthier? Is it expensive? Does my doctor/healthcare team even care? Is it minimally burdensome or annoying? Does it fit into my life?
  • Regulatory challenges – Where will the FDA draw the line on regulated products? How to marry the speed of innovation with the slow pace of regulatory feedback? (The FDA has made more progress on this, with the approval of many smartphone BGMs, Dexcom Share, and the mobile medical apps guidance. Still, the regulatory process takes time, is outside the expertise of most tech startups, and there is still gray area as to what is regulated. We hope to see a down-classification of secondary displays for CGM data.)

Below, we share our top five highlights from the day, along with an appendix of quotable quotes and our take on two of the day’s most innovative companies.

1. In the only Summit panel focused specifically on diabetes, Dexcom’s Mr. Steve Pacelli expressed hoped that by CES 2016 next January, Gen 5 might be approved and available for consumers. Meanwhile, NeuroMetrix CEO Dr. Shai Gonzani discussed the business rationale behind a consumer-targeted version of its neuropathic pain management device. Both feed into patients taking more personal responsibility for their care – we’d like to see more incentives from a systems perspective.  

2. White House Senior Advisor Ms. Claudia Williams provided an encouraging perspective on healthcare innovation, including a shout out to type 1 patient Ms. Dana Lewis (of #wearenotwaiting fame).

3. TV celebrity Dr. Phil McGraw excitedly discussed the impressive DoctorOnDemand app, calling it a “gamechanger” for healthcare delivery. The app connects any patient via video chat with a Board Certified physician in two minutes. He asserts that DoctorOnDemand can treat 17 of the top 20 reasons people see a doctor. He did not specify, but we believe this includes diabetes, based on this study.

4. A session devoted to pharma shared Novartis’ positive perspective on the digital field (and work with Proteus), as well as a collaboration between MC10 and UCB (sensor patch/transdermal drug delivery for Parkinson’s). Novartis is clearly taking digital health very seriously, a terrific move to see from a traditional pharma company.

5. Walgreens’ and Qualcomm Life discussed the companies’ new device connectivity partnership, enabling patients to send data from select medical devices to their Walgreen’s Balance Rewards account. Also this week, Qualcomm announced a strategic collaboration with Novartis to improve clinical trial data collection.

Top Five Highlights

1. The only Summit panel focused on diabetes – Personalized Health to the Max, with a section titled “Winning the War on Diabetes” -  included Dexcom EVP Mr. Steve Pacelli, NeuroMetrix CEO Dr. Shai Gonzani, and Vigilant SVP Mr. Laurent Nicolas. (For background, Vigilant is a Swiss watch company that designs and sells wireless precision instruments connected to iPhones to improve health.) All spoke positively about the power of digital health (especially smartphones) to empower patients to better manage their diabetes. Broadly, we felt that moderator  Ms. Amy O’Connor (VP Editorial Director, Everyday Health) could’ve asked more insightful and thought-provoking questions; consequently, many of the answers were general in scope (this was appropriate for the non-diabetes oriented attendees though we would’ve liked to have seen greater nuance in the answers, more directed follow up questions, etc.). We have summarized the most notable points of discussion below.

  • Dexcom’s Mr. Pacelli expressed hope that by CES 2016 next January, Gen 5 might be approved and available for consumers (“knock on wood”) – as a reminder, Dexcom plans to submit it to the FDA this calendar quarter (1Q15). A less-than-one-year FDA cycle does seem possible, given that much of the Gen 5 architecture has been approved through Dexcom Share. In addition, we assume the FDA is feeling some internal pressure to officially approve a smartphone-compatible CGM, as Nightscout has not undergone a regulatory review (though has met with the FDA). Of course, the Agency is always hard to predict, so a review stretching beyond CES 2016 would not be shocking. Mr. Pacelli said that there is a “relatively established path” to obtaining Medicare reimbursement of CGM (we assume he meant the ability to obtain an insulin dosing claim, a topic Dexcom is discussing with the Agency) – we were glad to hear that since we continue to hear resistance on adding any more costs (a new category also has to be established). Indeed, he believes Dexcom will be able to bring CGM to Medicare patients “within the next couple of years” – we certainly hope to see this and agree two years should be do-able if the approach is coordinated well. Notably, Gen 5 and the DIaMonD outcomes Study will also serve as important catalysts to secure Medicare coverage – armed with an insulin dosing claim, the ability collect real-time data at a population level (with Gen 5), and real-world cost-effectiveness data (the DIaMonD study), Dexcom should have a strong case indeed. 
  • NeuroMetrix CEO Dr. Shai Gonzani discussed the business rationale behind Quell, a consumer-targeted, over-the-counter neuropathic pain management device that we were very glad to see – “We have a prescription version [Sensus]. The problem is there is so much overhead and administrative burden, that given the price points, the margins are low for the manufacturer. It takes innovation out of the equation. And it’s only going to get worse as competitive bidding hits a lot of these technologies. We look at the consumer healthcare market and see it largely as a better, more efficient channel to get technology into the hands of people with diabetes. The reimbursement models are pretty broken for technology like ours. A lot of the margins are going to admin and claims processing. It doesn’t motivate innovation.” To answer the question, “What is missing in diabetes technology?”, Dr. Gonzani believes the technology is already available – the key is adoption, data/provider/EHR integration, and meaningfully influencing patient behavior. We hope that there is more encouragement for HCPs to work on this as we believe this product can make a meaningful difference.
  • Vigilant SVP Mr. Laurent Nicolas discussed the company’s Bluetooth-enabled insulin pen attachment, Bee, and its in-development Bluetooth-enabled pen. Bee is currently at the FDA, and Mr. Nicolas expressed confidence that it will launch soon. As we noted in our Day #1 coverage, the product attaches to the dial of available insulin pens and sends dosing data (via Bluetooth) to a phone app (see YouTube Video here). Mr. Nicolas also spoke optimistically about the VigiPen, the company’s own pen with Bluetooth built right into the dial (patients would fill the pen cartridges manually; a hassle but potentially worth the seamless data stream). He said this pen is just starting the FDA process, and a CE Mark is expected soon. Mr. Nicolas boldly claimed the product will “revolutionize diabetes care” – this was a bit over-the-top claim given that so many elements have to go right for favorable results and care, but we are very excited to see anything that helps on insulin dosing and delivery, that is for sure. Overall, his comments and stage presence didn’t inspire significant confidence in the company and we wonder if other companies had been considered to speak.

2. Notably, Senior Advisor Ms. Claudia Williams provided an encouraging perspective on healthcare from the White House Office of Science & Technology Policy. The highest point of her talk came as she spoke about the goal to “treat patients as the incredible innovators that they are.” She specifically mentioned “her friend Dana,” a type 1 patient that has developed a “form of artificial pancreas” to achieve “much better control of her diabetes” – this of course refers to advocate Ms. Dana Lewis/Scott Leibrand’s DIY Artificial Pancreas (#DIYPS) – Dana was a summer associate at Close Concerns several years ago and we can certainly speak to how smart and how much of a powerhouse she is! Seeing such a specific mention of patient-led innovation in diabetes coming from the White House was fantastic! Ms. Williams expressed hope that “safe zones for innovation” could offer innovators access to patients and attenuate the tension between sluggish FDA regulation and speedy consumer electronics innovation. YES! This is exactly what we’ve been hoping and asking for from the FDA – a sandbox allowing efforts like Nightscout and the artificial pancreas to play and innovate in. The low point of Ms. Williams’ talk came in Q&A, where a questioner lamented the low reimbursement rates for remote monitoring/care. Ms. Williams was ecstatic about the new “chronic care payment,” which pays doctors a measly $42 a month for caring for patients via telemedicine and remote monitoring. She called it a “huge opportunity,” though we are somewhat skeptical this is enough to move the needle payment-wise. Notably, and quite favorably, a White House priority is to work on interoperability and make EHR data much more broadly available to health IT, consumer facing tools, analytics engines, and trial discovery. This area is being considered for the next stage of meaningful use.

  • Defending the President and healthcare reform, Ms. Williams shared some encouraging stats on cost, quality, and technological progress. Readmissions are down by 130,000 (it was unclear since when – we’re trying to follow up on this); hospital acquired infections are down 17%, saving $12 billion (again, not clear since when); and healthcare cost growth is at its lowest point in 50 years (that said, the base is getting higher, so growth should be going down anyway). On this point, she cited consumerization of healthcare as a driver: individuals are picking insurance through the exchanges and many are choosing high deductible health plans – from our view, that’s good for some patients but negative for others, who forego good care due to problems paying the deductibles. On the tech front, Ms. Williams said that in 2012, 3/8 of hospitals used EHRs, a tripling since Obama took office. By June 2014, more than 75% of doctors and more than 90% of hospitals were participating in the government’s meaningful use program, a Medicare and Medicaid program that awards incentives for using certified EHRs to improve patient care (to avoid penalties, providers have criteria that serve as guidelines for using EHRs effectively).

3. TV celebrity Dr. Phil McGraw excitedly discussed the impressive DoctorOnDemand app, characterizing it as a “gamechanger.” As noted in our Day #1 coverage, the app connects any patient via video chat with a Board Certified physician in two minutes. According to Dr. Phil, the service can address 17 of the top 20 reasons why people see a doctor (flu, UTIs, writing prescriptions, getting referrals, etc.). The cost is a very reasonable $40 for a 15-minute session, roughly equal to the average co-pay most patients for in-office visits (the $40 also applies to flexible spending accounts). Notably, DoctorOnDemand has launched a new mental health service to offer patients ongoing support – it costs $50 for a 25-minute session and $95 for a 50-minute session, somewhere between a half and a third of what someone would pay for mental health consultations in their own city. He expressed lots of optimism that the mental health component, in particular, can help reduce the stigma associated with in-person treatment. The biggest challenge in launching DoctorOnDemand, he said, is people believe it’s too good to be true: “I’m going to be face to face with board certified physician in two minutes? I can even get a prescription or a referral?” Dr. Phil said “the word of mouth has just gone crazy,” and Richard Branson recently invested. Dr. Phil’s son co-founded the service.

4. A session devoted to pharma shared Novartis’ perspective on the digital field (and work with Proteus), as well as a collaboration between MC10 and UCB (a sensor patch+transdermal drug for Parkinson’s). Continuing a running theme, it was clear that digital health holds a lot of potential to overcome some of the limitations of traditional pharma, including medication adherence, outcomes tracking, and adaptive dosing. What is less clear is how long it’s going to take, whether outcomes can actually be improved, if patient engagement can be sustained, and if providers are even going to buy in. That said, partnerships between innovative digital health startups and pharma have some nice synergy to them – the former can bring new ideas and cutting edge innovation, while the latter offers market access and validation of new technology.

  • Novartis’ Corinne Savill echoed comments from other healthcare leaders that the industry is moving to outcomes-based reimbursement, meaning technology will be a critical tool to embrace. Payers are increasingly demanding “real world” data, she said, and digital technology can play an important role in capturing remote data to demonstrate beneficial outcomes. She highlighted the importance of patient reported outcomes, working more closely with patients in the research process, and even monitoring social media to better understand the patient experience – all awesome to hear! Novartis is currently working with Proteus and the company’s ingestible sensor technology, though no specifics were shared on the potential applications – reading between the lines, it still sounds early, but we are optimistic for something to happen in diabetes. Novartis is also working with a company named Trinetics to sit on top of disparate electronic health record databases and mine them for clinical trial recruitment. The goal is to find exactly the right patients to go into clinical studies, and hopefully, develop drugs more efficiently. There was no mention of the Qualcomm Life partnership (see below), or the Google contact lens.
  • Digital health startup MC10 and pharma company UCB discussed their collaboration to develop a transdermal patch/sensor to administer a Parkinson’s drug. The 24-hour patch is in studies now and administers the drug through the skin, along with using built in sensors to measure movement through an accelerometer. The patch is very slim and can be worn anywhere on the body. The basic idea is that Parkinson’s treatment/doses should vary based on symptoms (i.e., movement patterns). UCB’s Dr. James Zackheim highlighted the ultimate end-game: “For me, the holy grail is to have truly adaptive medicine. Sensing how patients are doing, and dosing that is automatically adjusted.” In terms of what this might look like, he suggested a “box of band aids” with different shapes and sizes based on what a patient needs. Of course, this approach has potential applications to diabetes, and we wonder if MC10 is thinking about sensor patches that measure glucose.

5. Walgreens’ Adam Pelligrini (VP of Digital Health) and Qualcomm Life’s James Mault (Chief Medical Officer) discussed the companies’ new device connectivity partnership. First announced on Monday (though we had not heard about it until today), the retail-medical collaboration will enable patients to send data from select mHealth medical devices to their Walgreen’s Balance Rewards account (via Qualcomm’s device-agnostic, FDA-approved 2netHub). Patients will earn points and pharmacists will be able to electronically access biometrics and health status information. No details were given on the specific devices, though the press release generically mentions Walgreens’ blood pressure cuffs and a Walgreens’ blood glucose meter. The Walgreens applications and Qualcomm-enabled branded devices will be available to consumers in the first half of 2015. Balance rewards currently has an impressive 82 million members, 150,000 of whom already have a device connected into the Walgreens app (e.g., an activity tracker). One goal of the partnership, said Mr. Pelligrini, is to give users meaningful, small rewards every single day that drive adoption and use – and we presume, incentives that drive them into Walgreens’ stores to spend their points! We appreciated the visionary perspective of Dr. Mault, who said, “Pharmacists are now going to be able to practice at the top of their license. They are one of the most underutilized resources in our healthcare system today.” It’s not clear to us what the business model of this program looks like (beyond simply driving traffic into stores ), since we assume the pharmacists would not get reimbursed for looking at the gathered data. Perhaps Walgreens will venture into disease management programs. We also continue to remain skeptical about motivating good behavior with financial incentives, given all the research around intrinsic vs. extrinsic motivation.

  • Also this week, Qualcomm announced a strategic collaboration with Novartis to improve clinical trial data collection in the “Trials of The Future program.” Qualcomm Life's 2net Platform will help with medical device data collection and aggregation sent from patient’s homes – a major win for those in trials, where the demands on time and data logging are often onerous. The goal is to improve the convenience and speed of capturing participant study data and test results, ultimately resulting in more cost-effective trials. Novartis is initially using the 2net Platform in a recently launched observational study of mobile devices in people with chronic lung disease (oddly, no Novartis products are being tested). The product will seamlessly collect and aggregate biometric data from medical devices, transmit it to the cloud, and then to the study coordinator. We see tons of potential for this in diabetes, especially to gather CGM data. As a reminder, Dexcom signed a memorandum of understanding with Qualcomm Life in 1Q12 to enable wireless transfer of CGM data to the cloud (via the 2net Hub), though we have not ever heard an update on its progress. We now assume it is not in Dexcom’s pipeline, given the availability of Share and the imminent FDA submission of the Gen 5 mobile platform.

Honorable Mentions

1. Quotable Quotes from the day’s panels:

  • “Devices that are going to cause change and be disruptive are the ones that can aggregate and interpret the data – those that change how providers engage with their patients.” – John Bojanowski (President, Honeywell Life Care Solutions)
  • “I would probably say lack of anything interesting to the consumer [is the biggest barrier in digital health]. Throughout our customer experience work at Anthem, unless consumers are chronically ill, they don’t want to engage with their healthcare. I think that is starting to change with ACA. People are incentivized with a $1,600 deductible. I care if I get an x-ray at Wal-Mart for $200 vs. the Mayo Clinic for $2,000. But I still think the biggest challenge is consumer adoption.” – David Ip (Senior Digital Product Manager, Anthem Blue Cross Blue Shield)
  • “We shop online, we bank online, we do taxes online. When I went to grad school, I lived in the library. Now, you don’t go to the library. We’ve shifted the way in which we gather and exchange information. Why would it not extend to health and mental health?” – Dr. Phil McGraw (Host, The Dr. Phil Show) speaking about DoctorOnDemand
  • “Some words of guidance to everyone in the room. We really need data and evidence about the impact of the tools you’re developing on the outcomes of care. We desperately need hard evidence.” – Ms. Claudia Williams (Senior Advisor, Office of Science & Technology Policy, The White House)
  • Most doctors are not thrilled by this opportunity [wearable technology]. The challenge is how does this fit in with my mental model. I’m trained to diagnose and fix problems. How does this wearable patch help me diagnose or treat? That’s unfortunately much more of a barrier than you might think. The data that comes in – does it need to even be seen by a doctor, or can a nurse see it? That’s the opportunity – to make this fit into the workflow.” – Dr. Michael Cantor (Chief Medical Officer, New England Quality Care Alliance)
  • “I can tap on my phone and get a black car from Uber. When I step into a provider’s office, it’s like a step back 20 years in time. I have to show a paper card. I have to fax my records. We’re so far behind in the medical world.” – David Ip (Senior Digital Product Manager, Anthem Blue Cross Blue Shield)
  • We’ll see more advancement in the next five years than we’ve seen in the past 50 years...The low acuity conditions that telehealth is focused on today aren’t going to bend the cost curve.” – Randy Parker (CEO, MDLIVE)

2. Biolucid and Neurotrack were two of the most innovative companies we saw today. The former aims to make health visual through interactive animations. A demonstration showed a cool animation of a heart and what acute coronary syndrome looks like. It’s intended as a tool for doctors to show patients what a condition looks like, the impact of medication at a molecular level, and other factors. It looked very impressive, and we imagine it would have tremendous educational applications in diabetes – the disease is so silent that very visual animations could do a lot to show patients the importance of good blood sugars. Meanwhile, Neurotrack CEO Elli Kaplan discussed the company’s Alzheimer’s diagnosis tool, which can predict whether someone will progress to Alzheimer’s 3-6 years before current diagnostics. The technology is a non-invasive brain scan (based on image recognition/memory) and helps overcome one of the biggest challenge of Alzheimer’s drug trials – it’s hard to find patients early in the disease progression. Neurotrack now hopes to “crowdsource a cure” and is asking everyone to take the test and donate the data. Today 5 million people have Alzheimer’s in the US ($214 billion in costs), expected to rise to 15 million by 2050 ($1 trillion in costs!). Zero preventive drugs currently exist.

 

-- by Adam Brown and Kelly Close