Silicon Valley’s Tech Giants are Investing Heavily in Healthcare
Facebook, Apple, Microsoft, Google, and Amazon are gaining market share in the healthcare sector at a high speed – and there are reasons to be both skeptical and optimistic about their entry into the field, which range from online pharmacies with diagnostics to patient monitoring.
The global health market is huge. It is estimated 52,700 billion DKK are spent on health worldwide each year, and the number is expected to increase by 3.9 percent between 2020 and 2024.
Therefore, it is not surprising that the tech giants in Silicon Valley have opened their eyes to the healthcare sector. Facebook, Amazon, Microsoft, Google, and Apple (also known as FAMGA) have, since the beginning of 2021, invested DKK 4.520 billion in the healthcare sector – a number equaling their total investment in the industry in 2020.
Although a health app on the iPhone, a Fitbit on the wrist, or buying health products online is part of most Danes' everyday lives, we tend to wrinkle our noses when the tech giants enter the health market. But what value can tech giants add to the healthcare sector?
According to the companies themselves, there are many areas in the health value chain where they can contribute with useful innovation and development:
- In research, work is being done on solutions to help with "mining" biological data to identify new molecules. Algorithms are being developed to help understand disease mechanisms, and artificial intelligence can be used to produce and select new drugs.
- The tech giants are moving into clinical development with technology which supports (virtual) clinical trials and improves patient monitoring.
- Other areas include production and supply chain, where companies build their own drug production, collect real-time data on supply and demand of medicines and use ‘Internet of Things’ technology to make the supply chain visible.
- They work with knowledge dissemination and sales, which include solutions within treatment optimization, online pharmacy, and prescription delivery.
Finally, the tech giants are developing systems for monitoring health records.
Skepticism is healthy - but is it necessary?
The tech giants’ entry into the healthcare market often brings skepticism. Some of the concern involves the security of personal data, fears of establishing a surveillance society and leaving healthcare solutions in the hands of international, profit-oriented companies.
Skepticism is healthy - especially in a sensitive area such as health. However, there may be less reason to wrinkle your nose in the future.
After some costly lessons learned, the industry in Silicon Valley has gradually realized it must submit to some of the same methods and transparency that we know from the pharmaceutical companies.
From living in the euphoria of opportunity and potential, companies like Google, Apple and Facebook are recognizing that the best way forward is to ensure a high level of trust from consumers. Evidence shows that past mistakes have taught companies to be far more conservative if they want consumers to allow the use of the health data they provide to businesses through gadgets, internet searches, shopping and behavior in everyday life.
There is already increased political scrutiny within this area, for example, the European GDPR rules and the rules for artificial intelligence which are currently being drafted at the European level.
Fagma is already well underway with health solutions
Facebook has launched a healthcare solution which focuses on alleviating and providing information about diseases in collaboration with healthcare providers in the US. This is partly a countermeasure to the criticism Facebook encountered as their platform was widely used to dissiminate misinformation during the COVID-19 pandemic.
Facebook is also working on a search tool to make it easy to find local treatment. In addition, Facebook's investment in virtual reality (VR) and their Oculus department also draw traces to the healthcare world, for example, as they collaborate with universities in using VR to educate future doctors.
Apple
Apple frequently updates its Apple Watch to collect new types of biometric data, and this trend will continue. In addition, Apple has made it possible for users to share their health data, such as blood pressure or heart rate, with relevant healthcare professionals, which provides important insight into patients’ health. Instead of a snapshot in time during an office visit, doctors can monitor a patient's health data over a longer period, enabling the doctor to paint a more nuanced picture.
Further, Apple has launched a platform for home training and will expand this area with more offers in the future. The platform is, among other things, expected to include rehabilitation courses.
Microsoft
Microsoft attracted attention in the spring when they bought Nuance for no less than DKK 124 billion. Nuance is the market leader in voice recognition in the healthcare world and it is used in the medical record system Epic, which is also the software behind ’Sundhedsportalen’ in Denmark. Microsoft has further launched Cloud for Healthcare, which combines cloud databases, artificial intelligence, automation, and app development.
Google has launched a (mobile) camera-based search tool which, using artificial intelligence, is capable of diagnosing skin disorders. They are also working on expanding their retinal scanning tool to diagnose a wide range of disorders by simply taking a picture of the retina of the eye.
Amazon
Amazon is also roaring ahead in the healthcare field and has launched Amazon Care (online treatment portal), Amazon Pharmacy, and AmazonDx (online diagnostic tool) over the past year — all focusing on consumers. Amazon, like Microsoft, has focused on expanding its cloud platform and launched AWS for Health earlier this year. Meanwhile, the company announced a new major collaboration with GE Healthcare last week.
Big pharma inspires big tech
The tech giants clearly have a foot inside the healthcare field already. We are in the middle of a transition phase where we need to be curious about how new technology can help us live healthier lives - but we also need to grasp new technology with healthy skepticism and demand that the healthcare sector, including the tech giants, use our data in an ethical manner.
This transition requires that we get used to the tech companies, and despite their increasingly conservative behavior, they hopefully keep a risk-taking approach, as this is what in many cases has accelerated the technological innovations which have made Silicon Valley a world-leading innovation hub.
There is no doubt that Silicon Valley is working hard to find areas that are complementary to the pharmaceutical companies' development of medicines and areas where technological solutions can add value and increase efficiency. This complementarity is best demonstrated by the new strategic partnerships announced across “old” and “new” suppliers of healthcare solutions almost every week.
The tech giants have deep pockets and are ready to invest in transforming the huge healthcare market by financing moonshots, developing new solutions, investing in acquisitions and taking stakes in new startups.
Danish startups can also play a major role here. In addition to Denmark having a fantastic ecosystem for the digitization of healthcare services, it has several strong entrepreneurial companies which, with the right solutions, are ready to jump into action and play a role in the digital healthcare systems of the future.
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