Musings from the Conference Circuit: A Wake-up Call for Pharma

Bill Drummy reports on the key healthcare takeaways from this year’s South by Southwest (SXSW) Interactive conference in Austin, Texas.

I’m just back from South by Southwest (SXSW) Interactive, the trendy, geeky, culture-fest that has grown enormously influential for the technology industry. It may come as some surprise, but SXSW Interactive has now become arguably the hottest healthcare conference in the country.

"We've been doing health-related programming for the last several years, but 2014 is the first year that we have featured the programming so prominently," Hugh Forrest, the director of South by Southwest Interactive told the WSJ.

I never got an exact number, but it seemed to me that one in three sessions was devoted to healthcare in one sense or another; everything from “Doctors on their Deathbeds” to “Is there a Neurological Recipe for Success?” to “Inventing Tumor Paint: Tapping Into Nature’s DNA” and all the way to “Tech off your Clothes: Naked Truths of Wearables”, which (naturally) featured lingerie models on stage.

Yet although the substance of some topics appeared scandalously thin, the most enveloping theme (and indeed the gestalt) of the entire conference, concerned the serious topic of privacy. We had a Google+ video feed of Julian Assange (from an embassy in London) and Edward Snowden (from somewhere in Moscow) who both railed about the value of personal privacy and the threat of government intrusion. (Snowden appeared, apparently without irony, before an image of the US Constitution, from inside Putin’s Russia and from behind what looks to be a rapidly reconstituting Iron Curtain.)

Why you should care

OK, so politically divisive and culturally au courant — granted. But you are wondering, what do you learn in a few days in Austin that’s so important to me and my business?

It simmers down to three things:

1) The topsy-like spread of wearable technologies — with their accompanying oceans of data about human behavior and healthcare decision-making — is rapidly opening up new pathways for clinical discovery, improved patient management and superior outcomes.

2) The privacy discussion itself teased out a fascinating possible resolution to the apparently inescapable conflict between personal security and open sharing of health information.

3) The emergence of technology companies into the healthcare space represents either an enormous threat or a scintillating opportunity for pharma, most likely both.

Data data everywhere and all the bands did shriek

The single topic most at risk of overexposure at SXSW, was certainly wearable devices for healthcare (or, as I like to call them, “Healthwear.”) Between sessions, meet-ups, book signings and pitch events, Healthwear was everywhere and covering everything. In fact, one speaker, Rachel Kalmar from Misfit Wearables, was draped in more than 30 devices.

But it looks like Healthwear has moved beyond the “fad” stage: According to Canalys, 1.8 million bands were sold in 2013, and some 8 million will ship in 2014, and shipments will reach 45 million in 2017.

A burgeoning consumer trend perhaps. But the real story and the real power of all these devices lies in what can be done with all the data they transmit. According to Monica Rogati, VP of Data at Jawbone, the company behind the “UP” band, they are now collecting data about the sleep patterns of fifty million nights of sleep. “And that shows us patterns you just can’t see without using a dataset that large,” she said.

You can imagine the potential of providing this kind of large-scale analytics to a wide variety of healthcare conditions: CNS, cardiovascular, diabetes and other metabolic disorders, the list is long. And broad. The data from current and future devices may help in recruiting candidates for clinical trials, identifying the best genetic types for certain targeted therapies, and improving outcomes because of the proven link between behavior tracking and behavior change.

To me, this represents the most exciting potential for Healthwear — its capability as a tool to help people get healthier, stay healthier and recover faster from illness or injury. But there was a heated debate at SXSW about how much of this enthusiasm was warranted by the data, and how much was “fanboy” hyperbole promulgated by techy Pollyannas.

I will admit to my own fanboy tendencies, but I will also note that Aetna’s CarePass Service is now working with FitBit to measure whether customers wearing the devices (and tracking consistently) actually see improved health outcomes. According to Tim Roberts, VP, Interactive & Design at FitBit, incorporating devices has allowed some employers to reduce costs by up to 4%.

Private lives and public goods

But making real the dream of better health through better tracking rests on a particularly pointy fulcrum: the tenuous balance between personal privacy and open sharing of data.

As the Assange and Snowden keynotes made clear, privacy was in the air in Austin.

I tweeted actively in virtually all the sessions I attended, because this is the way I take notes. I posted 350+ tweets over three days and, as it works in the Twitterverse, your best gauge that something you tweeted was interesting is the number of people who retweeted the post. To my surprise, my most retweeted post was not the Tweetpic from the “Tech Your Clothes Off” panel — the one with the lingerie models. Rather, it was this:

“Best design minds in the world are employed to hide the fact that you are giving away your data.”

I was capturing a comment from John Wilbanks in the “My Sensors. My Data?” session. Wilbanks, who is Chief Commons Officer for Sage Biometrics, said a lot of very smart things about the impact of the “Internet of Everything” on our culture and economy. But the fact that designers were, in effect, using their talents for a malicious purpose struck me, and others, as particularly chilling. The alternative approach, put forth in session after session, is a kind of “radical transparency” where the sharing of data is not hidden but rather completely open and even celebrated.

For sensors to work most powerfully in healthcare, the implication is that their data will cross-pollinate with Electronic Medical Records, insurance profiles and the like. But for that to happen, there must be a solve for the privacy vs. openness riddle.

Later in the day, I thought I heard one. (The coolest thing about attending SXSW is the way conversations seem to float and circle back upon themselves, providing meta-commentary on a larger theme. Well, at least that’s the intellectually coolest thing.)

At a session labeled (with obscene hubris) “Computing the Future: MIT Scientists Tell All,” Andrew Lo, a finance professor at MIT’s Sloan School of Management, applied a mathematical approach to the problem. Apparently, it’s not so novel among mathematicians, but this approach hasn’t been used yet in the privacy arena. It’s tantalizingly simple: Imagine a piece of data that an individual doesn’t want to make public but upon which some useful group calculations can be made.

Say the information is salary data. The first person takes his salary and adds a random number, the next person does the same, and so on. Once all the numbers have been gathered, each participant than subtracts the random number she added initially, and all the other participants do the same. The net number represents the sum of all the salary information, so the average salary can be easily obtained; yet no one has revealed his personal salary. “Using secure multi-party computation... transparency and privacy can both be achieved,” summed up Professor Lo.

Implementing a more elaborate version of secure multi-party computation offers the promise of allowing patient health data to be pooled, without any individual patient’s information being revealed. A simple yet powerful solution.

"In five years, will pharma companies even exist?”

A few weeks before SXSW, I traveled to Europe for some speaking engagements. And while I was there, I ran into a gentleman from a fast-growing Asian country who worked for a global pharmaceutical company. This gentleman was young, bright and ambitious. Yet he saw his future not at the global pharma company where he held a prominent position, but more likely at a large global technology company where he thought the future of healthcare had a better chance of being invented.

When I got to SXSW in Texas, where healthcare sessions included many speakers from technology companies, and only a small handful from pharma (and seemingly only a slightly larger handful of pharma folks in attendance — what’s up with that?), more than one commentator privately questioned whether pharma companies would survive the decade: “They are just so slow, so fearful and so regulated, I don’t think they can get move fast enough to put their true advantages to work.”

And if I were a senior leader at a pharma company hearing that quote, I may react with either a dismissive chortle or a shiver of fear. The first reaction is more consoling, but the second may actually help to get a better result.

Because if it’s true that the pharma industry’s erstwhile titans are in jeopardy, surely the shock of recognizing the threat represents the best hope for early diagnosis and curative treatment.

What ails pharma right now, at its root, is a lack of innovation. Lack of novel compounds from the labs, lack of new value propositions in a healthcare ecosystem that is rapidly transforming, lack of a full-on commitment to superior patient outcomes as the ultimate product we are producing.

Ultimately, then, the value of the comingling of ideas at SXSW for pharma is the lesson of redefinition.

Pharma industry leaders must redefine the business to be only about outcomes and measuring them; this must define what the company ought to be developing and marketing, whether or not it comes in a pill or a syringe.

Does the industry have sufficient clarity, energy and nerve to make the kinds of decisions they need to make to reinvent themselves as the future of healthcare proceeds around them?

It’s a daunting challenge, certainly. But there are inspiring precedents for companies re-inventing themselves to prosper in a new economic context. The most prominent example is IBM, which, in the course of its 103 year history, has re-invented itself no fewer than four times, most recently in the 1990s when it shifted dramatically from a hardware-centric company to its current business model focused on software and consulting services.

A little nearer to home in the healthcare space, major US health insurance companies like Aetna (very prominent at SXSW) and Humana are right now assertively redefining their roles in the ecosystem, seeking to transform how Americans perceive their fundamental value: from controlling costs to the system (and thereby, as a nasty side effect, compromising healthcare quality) to improving their customers’ overall quality of healthcare, and thus outcomes (!), and (only) then costs to the system.

Maybe what we will see at SXSW 2020 is a world populated by tech companies with a huge focus on improving health, insurance companies that have recreated themselves as humane and efficient care delivery networks, biotechs that rapidly evolve a new compound and then move on to the next.

And maybe even a few pharma companies that have committed themselves to turning the opportunities of data, technology and an outcomes-centric value proposition into the industry of the future.

I’d love to be in that session.

Bill Drummy, a member of Pharm Exec’s Editorial Advisory Board, is Founder & CEO of Heartbeat Ideas & Heartbeat West, healthcare marketing innovation firms now part of the Publicis Healthcare Communications Group. He can be reached at mailto:billd@heartbeatideas.com