Are you a digital health startup that’s tried to penetrate the pharmaceutical industry and have had little to no success? Here are the top seven reasons.
1. Lack of familiarity with pharma.
You may not speak the language of the pharma industry or understand its business drivers and its priorities. Fairly or unfairly, you will be perceived as not understanding the industry or how it works, much less its pain points. Education, advisors, and mentoring can help.
2. Lack of knowledge about regulatory requirements.
Pharma and life sciences are heavily regulated, and the path from R&D to market is prolonged, complicated, gated at various points, and subject to regulatory burden and business decisions. Digital health brings a whole host of issues new to pharma companies, which are often reluctant to take the risk. A digital health startup must be prepared for a long sales cycle.
3. Pharma does not understand digital health.
Many pharma companies are structured to operate as manufacturers, and have been limited in their contacts with patients. Digital health brings a new part of the value chain that touches the patient. To paraphrase an old saying, uncertainty breeds fear and doubt.
4. Your startup is too early.
The core business of pharma companies is drug development, not medical device or software development. This means they will be more receptive to startups that have developed a functional prototype that serves their purposes. They would generally not be interested in product co-development unless there is significant strategic value. Large companies may also be reluctant to base digital health programs on early startups.
5. No ultimate owner.
The core business of pharma companies is drug development, not medical device or software development. This means they will be more receptive to startups that have developed a functional prototype that serves their purposes. They would generally not be interested in product co-development unless there is significant strategic value. Large companies may also be reluctant to base digital health programs on early startups.
6. Too much noise in the market.
Certain technologies like A.I. are espoused by so many startups that it’s challenging for anyone to rise above the noise level. It helps to have a unique and memorable differentiator or two. What sets your offering apart from all others? Is it cheaper, faster, more accurate, more reliable, more user-friendly? Is the team particularly qualified? Is the benefit important and only possible with your product?
7. Timing is off.
Large companies, pharma included, are subject to periodic impacts like business reorganizations, reprioritization of drug pipelines, investments and acquisitions, regulatory changes, and even pandemics. Even if your startup could be a great fit, a pharma company may have higher priorities on its plate. Try to discover any factors that can help you decide on whether to pursue the company at this time.
On the bright side, pharmaceutical companies increasingly recognize the advantages of digital health and are willing to listen. Digital health startups can draw upon new resources to prepare for engagement with pharma. One such resource is PharmStars, an accelerator program specializing in digital health and pharma.
