Reverse Innovation 2014

Reverse Innovation

Example:

mobile Information & Communication Technologies enabling

PRECISION MEDICINE (diabetes as a case study in emerging markets)

Dr. Thomas Wilckens

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Connected Life: the global future mobile computing, sensors, diagnostics, health/fitness/wellness apps

Mobile computing

Connected diagnostics/monitoring

PRECISION MEDICINE

24/7 anywhere

Connected drive

mobile ICT will disrupt existing business IBM‘s transition in the 90ties as a role model for Diagnostics & Pharma?

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Diagnostics/Device/Drug companies future business model?: • Device as well as Drug development & marketing

mobiIe ICT enabled opportunities : • Improving efficacy in R&D • Disease management including QM • Disease prevention and health management • Value added services (VAS)

IBM‘s change from a pure IT company to services and high tech innovation: • Driven by technological disruption • PC = smaller, cheaper, enabling access to new clients • New players, new competition, new business concepts

How will the health care market look like in the future? Who will reign the world of health care in 2030?

communicable versus non-communicable diseases

Exponential population growth

Lack of infrastruture and organised health care systems

Lack of MDs (worldwide 200k WHO, 2011)

90% access to mobile

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Revers Innovation example Solution addressing major medical needs in less regulated reagions

Increase requirement for prevention & treatment

Exponential growth of costs

Continued lack of access; increased disease burden

Threat of increased gap in access to health care between economies

Opportunities for mhealth technologies

Consequences:

Showcase Diabetes management as an example: Integrated service concepts: Drug, device, services

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Wireless, needle-free, continuous glucose monitoring

Implantable sensors

Wireless controlled insulin pump

Who will pay for costly high end products in „old“ regulated markets? Are these concepts suitable for globalisation/glocalisation?

Indian Researchers To Develop Affordable Diabetes Test Strips; 09 Nov 2011 Health Minister : "Diabetes is highly prevalent in the country and the strip to measure sugar level is imported as it is patented abroad and it costs Rs 30." (ca. 42ct)“. Turkey (10,7million patients, reimbursement reform 3/2012): Support for meters in : 20TL = 9€; Support per strip: 0,32 TL = 14ct

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Diabetes Management, what‘s next? High end solutions for established markets & emerging markets?

Solutions for emerging markets? Novartis/IBM challenge winner: Dr. Diabetes for China - ESADE Business School-Universidad Ramon Llull

Challenges: • Eroding diagnostic concept (repeated glucose measurement at stake) • Depotinsulin • Crowded low-cost reader/strip market • Lack of disease awareness • Lack of qualified staff (MDs and health workers) • Changing reimbursement systems (value of BGM?) Opportunities: • Worldwide dramatically increasing disease burden (type II diabetics) • Opportunities for low cost, scalable products (based on mICT) • Diversified customer needs (in combination with mICT services) • New „biomarkers“? • Disease management central to disease outcome • Depotinsulin may result in new monitoring requirements • mICT based services in selected countries: India, Saudi Arabia, China • New „regional“ opportunities, i.e. gestational diabetes in emerging countries • Integrated health management systems bottom-up; compare Fresenius

Challenges and opportunities for Diabetes products: Focus on emerging markets

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What is “Reverse Innovation”:

Traditionally : New products developed in and for the home markets (developed countries)

later transferred to the emerging markets (glocalisation).

Reverse Innovation: New products first developed for the emerging markets

later transferred back to the developed world (after PoC).

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Reverse Innovation: Innovative products will also disrupt „old“ health care markets

Local Project start 2000 Market Entree 2006

US Market Entree 2010

Developed and 1st marketed in China

Introduced to the USA for GPs, Obstetrician &

Gynaecologist, ICUs, etc.

ECG for India

mobile Ultrasound

1) Affordability & scalability

2) Leapfrog technologies

3) Service ecosystems including new VAS

4) Robust and sustainable systems

5) Add-on applications (third parties)

Five way catalysts for reverse innovation: Resource-starved developing countries lead rich nations:

• 4th largest economy in world when adjusted for purchasing power parity.

• Growing well in excess of 8% per annum for last three years; current GDP Growth 8.5%.

• USD 380 Bn infrastructure investment in the next 5 years.

• Awareness of diabetes and related campaigns.

• App. 100 Million diabetics by 2030

• Prevalence of the disease is higher among affluent, educated, urban Indians than among poor, uneducated, rural people; 11% for obese, sedentary, urban Indians; peak at 20% in the Ernakulam district of Kerala.

• Established and growing mobile infrastructure. Android use prevails and smartphones increase.

• Extensive local mICT and diagnostics manufacturing resources.

• Low regulatory hurdles.

• High governmental interest in innovative integrated diabetes management solutions.

• …..

Opportunity India: India puts the patient pyramid upside-down

Sources: www.cmai.asia2

7 Januar y 2 0 1 1 | VO L 4 6 9 | N AT U R E | 4 7 9 1 7 M ay 2 0 1 2 | VO L 4 8 5 | N AT U R E | S 1 5

जेम्स, कृपया फिर से ईधन देना आपके रक्त में शकक रा कम है

The future is now: PRECISION MEDICINE 24/7 anywhere Avatars can replace MDs where no MDs are available

60 Patient management in combination with

„Sticky Services „

Reverse Innovation Strategy: Step I Excerpt from the toolkit by Govindarajan & Trimble, 2012

Which are the emerging economies that are strategic for your company? Out of the 150 poor countries, which ones have: 1. The bulk of future customers (patient collective) 2. Potential for future growth (WHO/UN Projection) 3. Talented low cost skill base (IT and mobile Industry) 4. Manufacturing capabilities (Resources and talent) 5. Physical infrastructure (Telecoverage) 6. Institutional infrastructure (Primary diagnosis of diabetes) 7. Social infrastructure (Incentive to lower disease burden) 8. Foundation to build R&D know-how 9. Local trend scouts & analysts 10. Potential new competitors 11. …..

Source: http://www.tuck.dartmouth.edu/uploads/people/vg/vg-reverse-innov-toolkit.pd f

Know your customers' needs! Use local resources for product development! Caveat & Catch 22: Customers cannot know what they miss, since they cannot anticipate what emerging technologies can deliver

Create ideas and be innovative in your customers local/social/economic context!

Optimized disease management in emerging and „old“markets; i.e. efficient and affordable:

Selected objectives (starting from scratch applying Reverse Innovation principles):

mobile ICT & POC: enabling access to health care Generate problem-oriented solutions within a contextual framework

1. Market-specifically tailored diagnostic devices (test-strips, mReaders, sensors….)

2. Integrated algorithm-based dosing management (cloud-based and/or Smart Phone)

3. High end versus low end versions for regional markets and/or client groups

4. Remote/mobile QM and disease management services in a cultural context

5. Low energy, ecologically neutral

6. Culturally adjusted value-added-services (VAS)

7. Identify general principles applicable from fever diagnostics to chronic condition management

8. Adjust for (re-) introduction into „old“ markets