Healthcare plays an integral part to keep the world functioning, as proven over the COVID-19 pandemic. However, its issues remain; inefficient systems, a lack of effective diagnoses and treatments, rare diseases – the list goes on. It’s only natural that innovation occurs in this sector, but why do so many companies fail and what are the barriers?
A Havard Business Review article identified 6 key criteria that affect innovation in healthcare:
- Industry players
- Funding
- Public policies
- Technology
- Customers
- Accountability
The first barrier to progressing innovation in healthcare is funding. Developing new medicines and technologies is notoriously costly, from lab experiments to clinical trials, to covering the costs of failed previous attempts. This already makes it a tough industry to be in, but on top of that you have industry players – stakeholders, competitors and regulatory bodies – who all determine as to whether or not a product will be implemented into the market. A new, innovative technology will struggle to be successful if the timing of its launch is mistimed, and if the market demand and environment are not favourable. Add to this the plethora of regulatory rules and public policies that surround the industry and it feels like getting an innovation through is impossible.
It’s interesting to note that this article was published in 2006, and yet 18 years later the industry still has the same barriers that start-ups are facing to get their innovation to market.
However, all is not lost. The last 18 years have still seen major breakthroughs in terms of innovative technology in healthcare, so how were they able to overcome the barriers? At Rapid Innovation Group, we address these challenges in a way that is adapted to the company at hand. Here are just a couple of ways we do it.
The Technology
An innovation will only be successful in a market if it has a value proposition or USP that meets an unmet need. This is otherwise known as understanding and obtaining a product-market fit. This can be discovered through a market sizing analysis and speaking to industry players. This allows us to analyse key aspects of the potential market that then translate to estimating the total market potential a product can tap into. This type of analysis can also look at the future trends to predict what the market will look like in 5 years’ time, and whether the technology will still be profitable. Further to this, understanding the market comes with grasping regulations in healthcare and therefore, getting hold of the right regulatory information can streamline the approval process.
Industry Players
Upon identifying the market, we would then look to identify industry players. RIG engages leading industry players and key opinion leaders (KOLs) to determine market interest for the innovation at hand -it is one thing to be able to solve an issue, but is that solution wanted by the market? KOLs would also look to advocate for the product, helping back up why such a technology is needed by writing business cases for hospitals and testing the innovation on select patient groups. Relationships with KOLs have the potential to evolve into partnerships, which can lead to joint development projects with big industry players the innovation reaches success e.g., collaboration over a clinical trial, funded by industry players and advised by KOLs.
Funding
And we have now come to the hurdle that unfortunately sees many healthcare focused start-up companies fall into the valley of death – funding. Healthcare innovation and its development is capital intensive. At RIG, we utilise our network of life sciences investors and create an approach for targeted engagement to meet with relevant investors (e.g., venture funds, private equity or pharma investments). We do not adopt a ‘spray and pray’ approach - our targeted approach increases the likelihood of fundraising success. From the initial contact to negotiation of term sheets we ensure that process management in place to execute on a fundraise.
To summarise, innovation in healthcare is hard, but not impossible when the right strategy and thinking is applied. At RIG, we help place innovative and sustainable healthcare technologies onto the market by applying our expertise to address the barriers many start-ups face in the early stages of their commercial development.
Rapid Innovation Group