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Continuous Glucose Monitoring Devices Overcoming Barriers in LMICs by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Continuous Glucose Monitoring Devices: Overcoming Barriers in LMICs

The rising prevalence of diabetes in low- and middle-income countries (LMICs) underscores the need for advanced diabetes management solutions. Continuous glucose monitoring (CGM) systems are highly valuable but face limited adoption in LMICs due to high costs, infrastructure inadequacies, issues with accessibility, affordability, and limited insurance coverage. On the other hand, these countries offer opportunities to develop scalable CGM solutions tailored to the needs of LMICs and to penetrate these markets.

Over the past decade, the global prevalence of diabetes has surged, with a notable concentration in LMICs, particularly across India, China, the Middle East, and Southeast Asia. The LMICs now host the majority of nearly 540 million people living with diabetes.

Read our related Perspective:
  The Future of Diabetes Care: Key Innovations in Continuous Glucose Monitoring

Effectively managing diabetes in LMICs is crucial and requires advanced solutions for precise and consistent monitoring of blood glucose levels. However, the CGM adoption rate remains low in developing and underdeveloped countries. As LMICs seek to incorporate these advanced solutions into their healthcare systems, they face numerous challenges.

Why is CGM adoption and acceptance lagging in emerging economies?

CGM systems are a revolutionary diabetes management tool. Despite the critical role it plays in advancing diabetes care, the high cost, uneven distribution, and inadequate infrastructure severely restrict their access, particularly in LMICs.

High costs hinder CGM adoption

A substantial barrier to adopting CGM systems in LMICs is their prohibitive cost. The average cost of CGM systems can be between US$120 and US$300 per month, placing them predominantly within the realm of those who can pay out of pocket.

For instance, the Dexcom G6 system, which includes sensors and transmitters, costs approximately US$300-US$350 per month. This price makes it out of reach for most individuals in LMICs, where average incomes are significantly lower.

As highlighted by a 2023 report by FIND, while an estimated 55,000 individuals live with type 1 diabetes in Kenya and South Africa, only about 10% are currently utilizing CGM systems. Many LMICs do not have subsidized healthcare or insurance coverage systems, which makes the situation worse. Consequently, the high cost of these devices creates a significant affordability gap, further entrenching healthcare inequalities.

In countries such as Iran, Lebanon, and Pakistan, the absence of governmental support and the unavailability of CGM technology highlight a broader issue. In many of these countries, private sector’s efforts are underway to bring diabetes-related innovations to the market, but the high costs associated with these technologies are a major obstacle.

Continuous Glucose Monitoring Devices Overcoming Barriers in LMICs by EOS Intelligence

Continuous Glucose Monitoring Devices Overcoming Barriers in LMICs by EOS Intelligence

Limited availability of CGM systems impedes diabetes management

In addition to high costs, the availability of CGM systems is another pressing issue. In many LMICs, including countries such as Turkey, Uganda, and Malawi, CGM solutions are either scarce or completely unavailable. This lack of availability limits access to advanced diabetes management technologies, crucial to improving health outcomes.

Similarly, In Egypt, where diabetes prevalence is notably high at 18.4% of the total adult population, the situation is equally challenging. The country lacks access to the latest innovations, while healthcare professionals need training in using CGM.

In LMICs, inadequate infrastructure poses a significant barrier to the widespread adoption of CGM devices. These tools rely on consistent power and internet connectivity to function optimally. However, frequent power outages, a common issue in many LMICs, can disrupt the continuous monitoring process, leading to data gaps and potential risks for patients who depend on CGM alerts for their health management.

Moreover, limited internet access, especially in rural areas, can severely impact the real-time data-sharing capabilities of CGM systems. This is particularly evident in African nations such as Niger, Nigeria, Chad, and South Africa, where infrastructure challenges are more pronounced.

For instance, South Sudan, with one of the lowest Infrastructure Index ratings in the region, faces critical limitations in accessing reliable power and internet services. These infrastructural deficits highlight the urgent need for targeted investments and solutions to bridge the infrastructure gap and enhance diabetes care in these regions.

Insurance coverage gaps stifle CGM access

The accessibility of diabetes management technologies, particularly CGM systems, is significantly hindered by inadequate insurance coverage and reimbursement policies.

This gap is especially noticeable in Asian LMICs such as the Philippines, where the healthcare system often does not include comprehensive coverage for these critical tools, placing a substantial financial burden on patients. In Vietnam, the National Health Insurance (NHI) scheme covers essential treatments such as oral antidiabetic medicines and insulin. However, it does not extend to glucose monitoring products. This lack of coverage forces patients to pay out-of-pocket for CGM, making it challenging for many to access.

What lies ahead for CGM in LMICs?

As diabetes increasingly poses a global health challenge, LMICs are ramping up efforts to enhance diabetes care. Progressive government policies, innovative programs, and manufacturers expanding reach across LMICs support this shift.

Government policies facilitating CGM integration with diabetes management

In many LMICs, government agencies and organizations are slowly working towards integrating advanced diabetes management solutions into healthcare infrastructure. This is visible through various initiatives undertaken that highlight the growing importance of CGM technologies.

For instance, the Chinese government demonstrated its commitment to standardizing CGM practices by issuing the Chinese Clinical Guidelines for CGM in 2009, with subsequent updates in 2012 and 2017. These guidelines establish clear protocols for device operation, data interpretation, and patient management. The guidelines also support training of healthcare professionals, improving quality assurance, and facilitating CGM integration into the national healthcare system. In several Chinese hospitals, the implantation, operation, and daily management of CGM systems are already handled by trained nurses and head nurses within the endocrinology departments.

India has also made significant strides, particularly in 2021, with the establishment of guidelines for optimizing diabetes management through CGM. The Indian government has introduced several initiatives to foster digital health advancements, including the National Digital Health Mission.

Advancing diabetes care, the ‘Access to CGMs for Equity in Diabetes Management’ initiative, a collaboration between the International Diabetes Federation and FIND, aims to integrate CGM solutions into African healthcare systems. This initiative seeks to double the number of CGM users in Kenya and South Africa by 2025, potentially impacting 21.5 million individuals with type 2 diabetes and 213,000 individuals with type 1 diabetes in Southern and Eastern Africa.

Government support for such initiatives is pivotal, as it can significantly enhance market access and ensure that CGM technologies reach underserved populations. These collaborative efforts and governmental actions are likely to drive extensive market reach and foster a more effective response to the global diabetes epidemic.

Manufacturers driving adoption by introducing affordable CGM solutions

Customizing CGM to meet the needs of LMICs offers manufacturers an opportunity to expand device access and adoption within these markets.

Medtronic is taking the lead by customizing its CGM solutions to reduce production and distribution costs specifically for LMIC markets. By optimizing its technology to be more cost-effective, Medtronic aims to increase the accessibility of its CGM systems in regions where diabetes management tools are often limited.

Similarly, emerging startups such as Diabetes Cloud (Aidex) and Meiqi are making strides in expanding CGM availability in South Africa. These companies are introducing more affordable CGM devices designed to meet the needs of local populations, thereby broadening access to critical diabetes management tools.

Manufacturers’ strategic initiatives accelerating CGM access

Manufacturers recognize the urgent need for effective diabetes care solutions in LMICs and the significant growth potential in the underpenetrated CGM market. To capitalize on this opportunity, they are focusing on expanding their product portfolios in these regions.

Additionally, Dexcom is planning to introduce the Dexcom ONE+ across the Middle East and Africa in the near future. This advanced CGM system can be worn in three locations on the body, enhancing comfort and usability. By accommodating individual preferences and needs, Dexcom aims to improve user experience. This strategic launch underscores Dexcom’s commitment to broadening its market presence and advancing its footprint in emerging regions.

Manufacturers are also supporting research initiatives across Africa. For instance, Abbott has donated its FreeStyle Libre Pro CGM devices for research in Uganda. The research’s favorable reviews and positive outcomes reflect a notable interest in and demand for sophisticated diabetes management technologies in these regions.

Moreover, strategic partnerships amongst manufacturers highlight a broader commitment to enhance the accessibility of CGM systems by leveraging combined expertise and innovative technologies. In January 2024, Trinity Biotech and Bayer partnered to introduce a CGM biosensor device in China and India. The collaboration is poised to leverage Bayer’s expertise and Trinity Biotech’s technological advancements to enhance diabetes care in these rapidly growing markets.

These strategic initiatives will likely impact the CGM market positively in emerging economies. Increased availability of CGM systems in LMICs will to drive higher adoption of glucose monitoring technologies and stimulate further investment in diabetes care.

EOS Perspective

Despite the challenges, the CGM market in LMICs presents a compelling growth opportunity for manufacturers. With diabetes cases on the rise, there is an increasing demand for CGM systems that offer real-time glucose data to improve patient outcomes. This demand, combined with progressive government initiatives and heightened awareness of diabetes care, creates a fertile ground for market development.

Manufacturers have a significant opportunity to capitalize on this emerging market by addressing the distinct regional needs. One of the primary challenges is the high cost of CGM systems, which limits their adoption. Hence, there’s a need to develop more affordable, scalable solutions tailored to the economic realities of LMICs. By focusing on local manufacturing and distribution strategies, healthcare companies can provide cost-effective solutions that meet the needs of underserved populations.

The shortage of trained healthcare professionals further complicates the widespread use of CGM. Manufacturers can address this by implementing comprehensive training programs for healthcare providers, equipping them with the skills needed to support patients in using CGM systems effectively.

This investment could foster greater acceptance of the technology. Non-profit organizations such as Medtronic LABS have made significant contributions, impacting over 1 million individuals with diabetes and training more than 3,000 healthcare workers across Kenya, Tanzania, Rwanda, Ghana, Sierra Leone, and India since 2013. The organization educates on diabetes management, equipping healthcare workers with skills to utilize CGM systems effectively. By enhancing the knowledge and capabilities of these health workers, Medtronic LABS ensures that communities receive better support in managing diabetes, ultimately leading to improved patient outcomes and CGM adoption.

Strategic partnerships with local entities, governments, NGOs, and international organizations can further enhance market reach. Collaborations can help manufacturers navigate the complexities of the market, overcome logistical challenges, and strengthen distribution networks. Partnering with organizations with established connections and regional expertise can facilitate more effective market entry and expansion.

For instance, organizations such as FIND, the International Diabetes Federation, and the Helmsley Charitable Trust are working to create business opportunities for CGM manufacturers. They specifically target manufacturers whose CGM products are unavailable in markets such as Kenya and South Africa improve access in these regions.

Further, programs such as the Access to CGMs for Equity in Diabetes Management and national health guidelines in countries such as China and India are laying the groundwork for improved diabetes care. By integrating CGM solutions into national healthcare plans and providing necessary training to healthcare professionals, these initiatives aim to establish a sustainable model for diabetes management. Other developing regions should replicate this approach.

In the future, sustained emphasis on innovation, affordability, and strategic collaborations are poised to transform the CGM landscape in LMICs, ensuring that these advancements are more accessible to all. As this gains traction, access to advanced diabetes management technologies is expected to improve, offering a promising outlook for millions of individuals living with diabetes.

The Future of Diabetes Care Key Innovations in the Continuous Glucose Monitoring by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

The Future of Diabetes Care: Key Innovations in the Continuous Glucose Monitoring

Continuous glucose monitors (CGM) represent a disruptive innovation that has transformed the diabetes management landscape. In recent years, the CGM market has seen remarkable growth, becoming an integral part of diabetes care with the potential to supplement or even replace traditional blood glucose monitoring methods. Opportunities in the CGM sector are endless, as the market remains under-penetrated. Market leaders such as Dexcom and Abbott leverage this potential to establish their foothold while continuously innovating their offerings.

CGMs provide accurate readings that can be used for insulin dosing decisions, eliminating the need for traditional fingerstick tests. The devices offer high ease of use and convenience, with many integrating seamlessly with smart devices. Additionally, the increasing use of AI and machine learning has led to the development of algorithms that customize health-related data for users.

Read our related Perspective:
Continuous Glucose Monitoring Devices: Overcoming Barriers in LMICs 

As we expect the next generation of CGMs, revolutionary advancements promise to transform diabetes management with these devices. The ongoing innovations aim to enhance precision and accuracy, offer predictive analytics, provide continuous monitoring beyond glucose, and enable the integration of other health parameters into the CGMs.

Precision and accuracy

Building on the success of current CGMs, the next-generation devices are likely to offer unprecedented precision and accuracy. Upcoming CGMs will use next-generation sensor technologies, including advanced nanomaterials and multi-enzymatic systems, to detect glucose levels with higher sensitivity and specificity.

Sophisticated AI and machine learning will support the prediction of glucose trends and real-time data processing to increase accuracy. To further improve accuracy across diverse populations and glucose ranges, emerging CGMs will leverage personalized calibration algorithms that adapt to individual metabolic variations.

Integration with broader health ecosystems and cloud-based analytics will be industry players’ key focus, ensuring improvement through real-world data feedback. Clinical validation and regulatory supervision will ascertain that CGMs adhere to all safety and health standards.

Overall, players will aim to provide reliable glucose data to empower users with actionable insights for effective diabetes management. Leading industry players, such as Abbott and Dexcom, prioritize data accuracy and ensure that their devices track glucose trends accurately with minimal error. For instance, Abbott’s Freestyle Libre uses advanced sensor technology to maintain accurate glucose readings over a 14-day wear period. On the other hand, Dexcom’s G7 utilizes advanced algorithms to continuously calibrate and refine glucose readings based on real-time data and historical trends, eliminating the need for fingerstick calibrations. Both devices provide real-time alerts on glucose levels to help users take action.

The Future of Diabetes Care Key Innovations in the Continuous Glucose Monitoring Market by EOS Intelligence

The Future of Diabetes Care Key Innovations in the Continuous Glucose Monitoring Market by EOS Intelligence

Integration with smart devices

Anticipated advancements include seamless connection with smartphones, smartwatches, and other wearable devices for uninterrupted glucose monitoring. Such integration will not only elevate user experience but also allow real-time updates, such as alerts for glucose fluctuations, viewing historical trends, and sharing data with healthcare providers, thus facilitating proactive management of user’s condition.

In advanced CGMs linked with mobile applications, predictive algorithms will be able to foresee glucose levels, offering tailored suggestions and insights based on individual patterns. Recently, in June 2024, Dexcom enabled a direct-to-watch feature, allowing its G7 users to monitor real-time blood sugar data from an Apple watch, regardless of whether they are carrying their phone.

In the future, this synergy between CGMs and smart devices will not only improve the accuracy and accessibility of glucose monitoring but also empower users to make quick, informed decisions regarding their health and improve overall well-being.

Predictive analytics

The real-time and historical analysis of glucose data equips CGMs to predict blood glucose levels several hours ahead, notifying users about impending hypoglycemia or hyperglycemia before they occur. This proactive approach allows for timely interventions, such as regulating insulin dosage or dietary modifications to maintain optimal glucose level.

Predictive analytics integrated with CGMs is revolutionizing the diabetes care market, and key market players are increasingly prioritizing its incorporation into their devices to gain a competitive edge. Roche is gearing up to compete with Abbott and Dexcom with its Accu-Chek Smartguide, which will soon be launched in the European market following its approval in July 2024. The company is betting on robust predictive analytics to differentiate its product from competitors. The device aims to enhance glucose monitoring by employing predictive AI to forecast glucose levels up to two hours ahead, identify the risk of low blood glucose within 30 minutes, and detect nocturnal hypoglycemia.

Over the years, as predictive algorithms improve, CGMs will become increasingly suitable for mitigating risks, reducing glucose spikes in patients, and equipping patients to manage diabetes better and improve quality of life. In the future, enhanced personalization and seamless integration of CGMs with broader health ecosystems can transform diabetes management by providing more precise and accessible real-time insights and recommendations tailored to individual metabolic responses, lifestyle patterns, and environmental influences. It is likely that the next generation of CGMs will also predict and adapt to potential disruptions caused by stress, illness, or diet changes.

Product diversification

The evolution of CGMs is expected to go beyond glucose monitoring, embracing a holistic approach focused on personalized and preventive healthcare. Companies are conducting research to integrate CGM readings with health metrics such as ketone levels, hydration status, and early indicators of other health conditions.

Industry players are also developing targeted solutions for various customer segments. For instance, they are focusing on pediatric and geriatric populations by creating CGMs customized to meet these segments’ unique physiological and lifestyle needs. Another area of focus is developing CGMs to support gestational diabetes, helping pregnant women better manage maternal and fetal health.

Currently, companies such as Medtronic and Abbott have partnered to integrate Medtronic’s automated insulin delivery systems with Abbott’s CGM to create closed-loop systems. This system automatically adjusts insulin delivery based on real-time glucose readings, which helps patients improve glycemic index.

EOS Perspective

The next generation of CGMs is poised to help manage of chronic diseases beyond diabetes. With key players such as Dexcom and Abbott maneuvering the industry, the future promises unprecedented advancements through the fusion of technology and healthcare. The impact on patient outcomes and the broader healthcare landscape will lead to a more personalized, proactive, and interconnected approach to care.

There is a significant opportunity for industry players across major markets such as the USA, where CGM adoption remains low, with about 90% of people with diabetes still not using these devices. To penetrate key markets including the USA and Europe, CGM companies need to develop effective go-to-market strategies to increase adoption rates. They should focus on patient segmentation, exploring multiple distribution channels, and forming alliances with key stakeholders.

Patient segmentation

Sales strategy and product offerings could be tailored around specific patient groups, i.e., Type 1 versus Type 2 diabetes or various income levels. For example, Abbott has strategically developed different CGMs to target varied patient groups. Its FreeStyle Libre is designed for users with Type 2 diabetes, while Lingo, a consumer wearable, is ideal for consumers trying to improve overall health and well-being.

Diversifying distribution channels

The CGM players must diversify their distribution channels, particularly by utilizing digital marketing and social media to reach a broader audience and increase awareness. Digital marketing can also serve as a crucial tool for connecting with diabetes online communities and educating patients.

Abbott and Dexcom are looking to explore new distribution avenues. In H2 2024, both companies rolled out their competing products (Abbott’s Lingo and Dexcom’s Stelo) over-the-counter in the USA, selling through their websites, with an aim to expand the reach and enhance market penetration. Expanding sales through the online channel also makes it simpler for consumers to purchase CGMs directly from producers simpler for consumers.

Partnerships

Forging strong alliances with key stakeholders can create improved and integrated diabetes management systems. Strategic partnerships with technology companies can help CGM players enhance products, expand market reach, and improve patient outcomes. On the other hand, partnering with insulin pump and insulin pen companies can streamline diabetes care by combining real-time glucose monitoring with automated insulin delivery.

Both Abbott and Dexcom have partnered with Tandem Diabetes Care to integrate FreeStyle Libre CGM and G6 CGM, respectively, with Tandem insulin pumps. These systems use real-time glucose readings to automatically adjust insulin dosing, improving diabetes management.

The opportunities in the CGM market are vast and continually expanding. As technology advances, CGMs will become more accurate, user-friendly, and integrated with other health management tools. Moreover, with the growing prevalence of diabetes worldwide, the demand for efficient and effective glucose monitoring solutions will only grow in the future, making the CGM market an attractive segment for continued investment and development.

Gut Matter - Will FMT Change How We Look at Disease Treatments by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Gut Matter: Will FMT Change How We Look at Disease Treatments?

Converting poop to pills was something unimaginable a few years ago, but now Fecal Microbiota Transplant (FMT) is taking the medical world by storm. This revolutionary technique, which promises to treat a wide range of diseases, from GI disorders to mental health issues, is becoming popular due to its success in treating recurrent clostridioides difficile infection (CDI), a serious infection that can damage the colon. FMT offers tremendous opportunities but also has challenges that players should consider if they want to thrive in this industry.

FMT is a procedure in which feces from a screened, healthy donor are transplanted into a recipient to balance the gut microbiota. This procedure can help treat certain infections and lessen the severity of some gut health issues.

Gut infections are usually treated using antibiotics, which can occasionally destroy beneficial bacteria. A 2000 study published in the Journal of Microbiology, a delayed open-access journal of the American Society for Microbiology, indicated that CDI recurring in around 15% to 35% of people is caused by antibiotics disrupting the gut microbiota and its balance (gut dysbiosis). Dysbiosis has been linked to several chronic illnesses, such as cardiovascular disease, inflammatory bowel disease (IBD), diabetes, and colorectal cancer (CRC).

FMT is highly efficient in treating recurrent CDI, with a cure rate of 90%, according to a 2015 study published in the American Journal of Gastroenterology. Numerous trials to understand the efficacy of FMT in treating conditions such as obesity, liver disease, ulcerative colitis, Crohn’s disease, Parkinson’s disease (PD), and IBS are underway. There are also some pre-clinical studies in progress to understand the potential of FMT in treating illnesses such as diabetes, skin issues, lung diseases, and autism.

This article is the second in EOS Perspectives' coverage 
of Fecal Microbiota Transplantation in animals and humans.

Read our related Perspective:
 Poop to Pills: Is FMT the Future of Veterinary Medicine?

FMT is showing promising growth

The human FMT sector is expected to grow at a CAGR of 5.1% and reach US$3.15 billion by 2031, according to a 2023 report published by India-based market research company The Brainy Insights.

The key factor influencing this growth is the rising incidence of GI disorders. According to the GI Alliance, a US-based network of gastroenterology providers, around 20 million Americans have chronic digestive disorders. Similarly, the CDC estimates that there are around 500,000 cases of CDI reported annually in the USA, and about 9% of elderly patients die within a month of contracting healthcare-associated CDI. All these have influenced the growth of FMT, which offers a promising solution to several conditions.

Other factors influencing the FMT sector growth are the rising patient awareness and interest in preventive healthcare and the emergence of effective probiotic strains.

There are several biotechnology companies currently involved in R&D and product development. Australia-based BiomeBank became the first company to get approval from a competent authority to market its FMT-based CDI solution called Biomictra Faecal Microbiota (colonoscopic, enema, and upper GI delivery) in November 2022. This was followed by the FDA approval of US-based Rebiotix-Ferring Pharmaceuticals’ REBYOTA (rectally administered) in the same month. Seres Therapeutics, a US-based company, has also received FDA approval for its orally delivered product Vowst (SER-109) for treating CDI in April 2023. Following Seres’ footsteps, Rebiotix-Ferring is now conducting trials to develop an oral alternative, RVX7455.

US-based Finch Therapeutics is another major company developing solutions presently undergoing phase-3 studies for diseases such as chronic hepatitis B and autism. Its solution, CP101, for treating CDI, has been discontinued.

Gut Matter Will FMT Change How We Look at Disease Treatments by EOS Intelligence

Gut Matter Will FMT Change How We Look at Disease Treatments by EOS Intelligence

The FMT sector is grappling with a multitude of pressing challenges

The FMT sector has the potential to treat numerous GI and other related disorders effectively. However, the business landscape is still marred by several challenges that players must consider.

Lack of consensus about policies is making development challenging

Regulatory hurdles are one major roadblock players face. The FDA currently regulates FMT as an unapproved biologic medicine. There is a lack of uniform guidelines for FMT, causing variations in processes, such as donor screening and processing.

The FDA took its first step toward FMT regulation in 2013. It released a set of guidelines removing the need for investigational new drug (IND) applications when FMT is used for treating CDI unresponsive to standard treatments if medical practitioners secure informed consent. However, this application is needed when FMT is used for other reasons, including safety studies.

The FDA drafted new guidance in 2016, which was finalized in November 2022. In this guidance, the FMTs acquired from stool banks are exempt from regulatory discretion. Also, the IND requirements will be waived if some conditions are fulfilled, such as getting informed consent from patients or authorized representatives and screening and testing stool under the supervision of competent healthcare professionals. There should also be no known potentially serious safety concerns, such as issues with improper handling or storage, or issues with administering product collection without the proper testing or screening. All these increase the procedural burden for healthcare practitioners. However, the FDA has indicated no regulatory policies for stool banks to reduce the administrative burden of private practice settings without the support of research staff.

Due to the significant variation in gut microbial composition among samples, FMT fails to satisfy EU drug classification requirements. Also, since human cells are not an active component of fecal matter, FMT is not covered by EU Directive 2004/23, which deals with the safety and quality of human tissues and cells. Therefore, the European Medicines Agency (EMA) has authorized the member states to regulate FMT however they see fit.

This lack of consensus has led to diverging regulatory policies, causing uncertainties for interested players and making developmental activities challenging, particularly in Europe. But despite this, many companies, such as Rebiotix-Ferring Pharmaceuticals, are making leaps in R&D.

Donor selection has social, ethical, and financial challenges

Another bottleneck that needs to be addressed is the availability and selection of suitable donors. There is a debate regarding whether the patient should know the donor or not. Also, the ideal donor should be free from chronic illnesses or infections and willing to donate. The donor is screened for obesity, antibiotic resistance, microbiome diversity, oncogenic potential, a history of antibiotic use, and risky behaviors such as drug abuse.

Stool banks require donors to follow several restrictions, such as maintaining BMI, abstaining from unhealthy eating habits such as spicy foods or saturated fatty acids, and avoiding travel to infection-prone tropical regions for an extended period. With that, donor dropout is high due to the considerable commitment needed, according to a 2019 study published in Gastroenterology, the official journal of the American Gastroenterological Association (AGA).

FMT implementation is also facing several social and ethical challenges with questions such as donor compensation, gender of the donor, donor and patient vulnerability, and commercial use of fecal matter.

Companies can launch educational drives targeted at patients and ideal donors to raise their awareness about FMT, tackle social resistance towards the procedure, and build trust with prospective donor candidates and patients. This can help reduce people’s reluctance to participate in FMT procedures.

The procedure remains risky, especially for vulnerable population

FMT is associated with an increased risk of transmitting infections such as Shiga toxin-producing E. coli (STEC) and enteropathogenic E. coli (EPEC) from the donor to the receiver. Immunocompromised patients are at a higher risk of developing side effects, according to a 2020 study published in Digestive Diseases and Sciences, a peer-reviewed journal. Similarly, a 2019 case study published in the New England Journal of Medicine, a journal of the Massachusetts Medical Society, showed a fatal infection contracted by an elderly immunocompromised individual following an FMT procedure.

Another challenge is the very few pediatric clinical trials, which makes it difficult for physicians to make the best judgments for when to initiate FMT therapy in children.

To tackle safety-related challenges, the FDA released safety advice in 2019 and 2020 regarding the possible risk of severe, potentially fatal infections associated with the procedure. Companies such as Boston-based OpenBiome have promptly modified their sample screening methodology to identify such infections.

Lack of studies on long-term effects

The lack of understanding of the long-term changes FMT can cause in a patient’s microbiota is another challenge. Several studies reveal that liver diseases, cancer, cardiovascular diseases, etc., can develop due to microbiota dysbiosis. Investment in R&D by interested and capable players can help medical professionals understand the long-term implications and complications of FMT and identify feasible solutions, which can pave the way for widespread treatment acceptance.

The sector’s future appears bright, underpinned by extensive development

FMT is a highly effective treatment for recurrent CDI. New developments have been taking place in many areas, such as administration modes, stool collection, and storage, and interested players can find opportunities in these areas. The FDA is also becoming more accepting of FMT-based treatments that show good results. This is shown by the approval of Rebyota and Vowst, both of which were more effective in reducing recurrent CDI compared to placebo in randomized controlled trials.

Stool banking and processing is another area ripe with opportunities for interested players. Conventionally, fresh stool is used for FMT, but this can increase the cost of the procedure. Stool banks are being developed to facilitate cost-effective and safe treatment. An example is OpenBiome, the USA’s first and biggest public stool bank. Stool banks can also make the standardization of stool processing and donor selection easier, according to a 2019 report published by the European Helicobacter and Microbiota Study Group.

Players can also form collaborations with healthcare professionals and research institutions to offer FMT treatments and support microbiome research. Many government organizations are also showing interest in the development of FMT therapies. The GBP500,000 grant awarded by the Biotechnology and Biological Sciences Research Council (BBSRC), a part of UK Research and Innovation, in 2022 to Norwich-based Quadram Institute (QI) to build and equip a new FMT research facility is an indication of this.

Investing in the development of FMT treatments can revolutionize the treatment of several diseases, and companies that can invest in research can gain a head start in the competition. Rigorous R&D is going on to develop FMT solutions for conditions such as obesity, depression, cancer, pediatric diseases, and autoimmune disorders such as Crohn’s disease.

A 2023 trial conducted by the US-based Emory University School of Medicine also showed that FMT can reduce the colonization of multidrug-resistant organisms in kidney transplant patients. Investigators believe more research in this field can help improve transplant success rates and decrease the chances of infection. Individual case studies have shown great improvement in cure rates for certain diseases, including mental health conditions, but more research is needed to present a solid case for product development.

EOS Perspective

FMT is gradually establishing itself as a promising solution for recurrent CDI and is expected to create waves in the treatment of numerous physical and mental health conditions despite facing several challenges.

Improvements in donor selection, early identification of certain conditions with better risk assessment, and increased treatment efficiency can be expected with ongoing research expanding the knowledge base of the medical community.

Experts are also looking into FMT’s potential as an adjunct therapy in treating diseases such as tuberculosis, and it is expected to open the door to interested players to create personalized and targeted FMT-based treatments for various diseases.

Studies are also being done to understand and substantiate the potential of gut microbiota to anticipate diseases such as IBD and CRC using AI (Artificial Intelligence) and ML (Machine Learning). ML can be used to identify biomarkers in the gut microbiota to aid in the early detection of CRC. These studies, when extended to FMT, are expected to help medical professionals identify ideal donors and improve treatment efficiency.

The Brainy Insights, in its 2023 report, predicts a growth in the probiotic infusion segment owing to the increasing studies on diabetes management. Therefore, competitive players interested in FMT can also diversify their portfolios by including consortia (multi-population systems with a broad spectrum of microbial species) and probiotic products that have the potential to offer regulated, standardized treatments. This can help them get an edge over their competitors.

Several oral FMT solutions are currently in phase-1 and phase-2 clinical trials, and many are geared toward treating conditions other than recurrent CDI. For example, US-based Vedanta Biosciences is developing FMT therapeutics for IBD, food allergies, solid tumors, etc. As research continues, it is expected that investigators will be able to identify the bacterial strains that can treat different diseases and isolate and mass-produce them, leading to a decrease in stool collection and processing and a reduction in stool transplant-related infections, but this development is expected to occur very far in the future.

Although marred by several challenges, FMT is well-positioned in the microbiome industry to obtain FDA approval and (with time) widespread acceptance. Right now, interested players can expect good returns by investing in oral FMT development, stool banking, and R&D.

Digital Therapeutics The Future of Healthcare by EOS Intelligence
by EOS Intelligence EOS Intelligence No Comments

Digital Therapeutics: The Future of Healthcare?

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Although the COVID-19 pandemic seems to be done with its rampage, many people still opt to access all kinds of services, including healthcare, from the comfort of their homes. As this trend is expected to continue, the global digital therapeutics market, with its projected growth at a 20% CAGR from 2022 to 2035, is one important sector healthcare firms should focus on right now.

Digital therapeutics (DTx) are digital health interventions or software applications that are clinically validated and designed to treat or manage medical conditions. They can be used alone or in conjunction with traditional medical treatments.

The Digital Therapeutics Alliance categorizes DTx products into three types: disease treatment, disease management, and health improvement.

Examples of DTx include a solution to manage chronic musculoskeletal pain developed by Kaia Health, a biotechnology company in New York. This motion analysis tool assesses and guides patients’ progress during physical therapy and tailors treatment to individual requirements.

Similarly, Clickotine from Click Therapeutics, a company also based in New York, uses AI to help people with nicotine addiction. This solution offers a personalized plan fully integrated with eight weeks of nicotine replacement therapy, including options such as gum, patches, or lozenges. It tracks critical aspects such as daily cigarette counts, craving triggers, craving times, etc. A trial study conducted by the company in 2016 claimed that 45% of Clickotine users were able to quit smoking.

Adoption of DTx is taking off amid increased investments

The commercial development of DTx started around 2015 and, since then, has grown into a global market of considerable size. The total value of global DTx start-ups was estimated at a whopping US$31 billion in 2022, according to a 2022 report published by Dealroom, an Amsterdam-based firm offering data and insights about start-ups and tech ecosystems, in partnership with MTIP (a Swiss-based private equity firm), Inkef (an Amsterdam-based early-stage venture investment firm), and Speedinvest (an Austrian early-stage investor).

The number of people using DTx solutions is expected to increase over the next few years, according to a 2022 report by Juniper Research, a UK-based research firm. The study found that there were 7 million DTx users in the USA in 2020, a number expected to rise to around 40 million in 2026.

This increase can be attributed to the fact that DTx solutions are highly accessible and distributable due to an increase in the use of smartphones. A 2021 report published by Pew Research Center, a US-based think tank, found that 87% of Americans owned a smartphone in 2021, compared to 35% in 2011. With this, more people will be able to access medical care without having to spend more on hospital visits.

DTx applications have also been attracting numerous investors owing to the applications’ cost-effectiveness, ease of distribution, and better accessibility. According to the same 2022 report published by Dealroom, global venture capital funding in DTx witnessed a fourfold increase in 2022 compared to 2017.

All these studies reveal that, despite certain challenges, the DTx applications hold the promise of developing into a practical and affordable means of treating illnesses and conditions that impact large numbers of people.

Regulatory pitfalls present a major roadblock to DTx adoption

One main challenge DTx companies face is the regulatory environment. All DTx products must comply with the regulations of regional agencies such as the FDA, HIPAA, HITECH, etc.

Many US firms initially faced regulatory obstacles and payer resistance around product reimbursement. Before 2017, the US FDA classified DTx solutions as a SaMD (Software as a Medical Device) and, therefore, made them subject to risk assessment (low, medium, or high). Due to this, DTx solutions needed premarket approval and rigorous clinical trial results to get approval.

This has improved with the introduction of the Digital Health Innovation Action Plan by the FDA in 2017. According to the new plan, the FDA will first consider the company producing the solution. If the producer has demonstrated quality and excellence, it can market lower-risk devices with a streamlined premarket review. Post-market surveillance and data collection are also done to evaluate product efficiency.

Similarly, in the EU, DTx is controlled by national competent authorities and governed by the European Regulation on Medical Devices 2017/745 (MDR). However, no specific framework indicates the evidence required for assessing the performance or quality of DTx solutions or their production standards. This means that the member states may interpret the dossier requirements differently, leading to a fractured regulatory environment.

The COVID-19 pandemic has provided companies with some regulatory flexibility, leading to an increase in venture capital funding. In 2020, the federal government in the USA issued a new rule allowing healthcare practitioners to treat patients across state lines, including the use of digital medicine. This can increase access to healthcare, especially in rural areas, and physicians will be able to offer timely care to their patients traveling in a different state.

The FDA has also loosened regulations during COVID-19, particularly for mental health products, with the Digital Health Innovation Action Plan. This was to ensure that patients received timely care even from their homes while reducing the burden on hospitals. It waived certain regulatory obligations, such as the need to file a 510(k) premarket notification during the COVID-19 pandemic. The 510(k) is a submission indicating that a new medical device is similar to something already approved by the FDA (a predicate device) to ensure safety and efficiency. However, finding suitable comparables can be highly challenging in the case of DTx, which is dynamically evolving. This can result in misunderstandings or overlooking of critical aspects of these solutions, leading to uncertainty and delays in the approval process. The waiver of this regulation offers DTx companies some relief in the future.

Digital Therapeutics - The Future of Healthcare by EOS Intelligence

Digital Therapeutics – The Future of Healthcare by EOS Intelligence

Patient health literacy is a hurdle in the adoption of DTx solutions

A survey by the National Assessment of Adult Literacy (NAAL) in 2003 has shown that only 12% of Americans possess proficient health literacy skills, making them able to find and understand information related to their health. This lack of awareness among patients can also impede the ease of applying DTx products.

Patient experience is also crucial for the acceleration of DTx adoption. Older patients unfamiliar with using technological gadgets can find it difficult to adopt DTx solutions. However, a 2022 AMA survey has shown that 90% of people over the age of 50 in the USA recognize some benefit from digital health tools.

Similarly, a survey conducted by the Pew Research Center in 2021 indicated an increase in the use of smartphones and the internet among older people in the USA, driven by the pandemic. Older adults are using technological applications for activities such as entertainment, banking, shopping, etc., even after the pandemic, a 2021 survey by AARP Research, a US-based NPO, shows. This indicates that there is scope for an increase in adoption.

Many companies are now trying to increase patient involvement by using gamification, aiming at patient groups for whom DTx use is likely to be more challenging (e.g., older population, children). DTx developers include game-like elements or mechanics into a DTx solution, such as tasks, rewards, badges, points, and leaderboards. An example is US-based Akili Interactive’s EndeavorRx, a prescription DTx aimed at enhancing attention function in children with ADHD aged 8 to 12. It uses an interactive mobile video game to assist children in improving their attention skills and adjusting to their performance levels. The game’s sensory stimuli and motor challenges also help kids multitask and tune out distractions.

Payer reluctance affects many DTx products

Although the number of DTX products on the market increases, payers’ reluctance to cover their costs to the patient can also slow down adoption. The coverage of DTx solutions is limited, even when they are FDA-approved. Only 25% of payers are currently willing to cover prescription DTx solutions, according to a 2022 survey by MMIT, a Pennsylvania-based market data provider, which involved 16 payers.

Akili Interactive’s EndeavorRx is one such solution facing insurance coverage issues. Elevance Health (previously Anthem) denied coverage for EndeavorRx, deeming it medically unnecessary, while Aetna, another insurance provider, considers it experimental and investigational.

A study released by Health Affairs, a health policy research journal, in November 2023 has shown that only two of the twenty FDA-approved prescription DTx solutions on the market have undergone rigorous evidence-based evaluation. This means that no authoritative results indicating the benefits of these solutions for various population demographics are available, making many payers skeptical of their medical claims.

DTx offers solutions for managing multiple conditions

Over the past few years, several prominent players have emerged in the DTx landscape. Around 59% of the DTx market is concentrated in the North American region and 28% in Europe.

Top players, such as Akili Interactive and Big Health, both US-based firms, focus on offering products for managing mental health illnesses, mostly management of anxiety, depression, and stress, according to a report published in 2023 (based on data until September 2022) by Roots Analysis, an India-based pharma/biotech market research firm. With about 970 million people suffering from mental health conditions globally (according to the WHO), the potential user pool is enormous, offering growth opportunities for DTx solutions developed to address mental illnesses and, over time, driving the growth of the DTx market as a whole.

Many top companies also focus on solutions offering pain management and treatment for chronic conditions such as diabetes, obstructive pulmonary disease, and musculoskeletal disorders. An example is US-based Omada’s pain management solution, Omada MSK. This application guides patients through various customized exercises and records their movements, which are then assessed by a licensed physical therapist (PT), who can make recommendations for improvement. It also has a tool that utilizes computer vision technology to help PTs virtually assess a patient’s movement and range of motion, allowing them to make necessary changes in the therapy.

Similarly, several DTx solutions on the market now focus specifically on diabetes, which affects around 537 million adults globally. Some top companies focus on the previously unmet needs of conventional methods, such as weight management or preventing prediabetes, to help with overall diabetes treatment. US-based Omada’s solution, Omada Prediabetes, comes with a weight scale pre-connected to the app, and the weight is added to the app as soon as the patient steps on the scale. A dedicated health coach assesses the patient’s weight, creates a customized plan, and monitors the patient’s progress. In other similar DTx solutions for diabetes, an app can also give insulin dose recommendations based on the patient’s blood glucose levels.

DTx can serve in a range of other conditions, including major depressive disorder, autism spectrum disorder, and multiple sclerosis, to name a few.

The DTx landscape is rife with development

The DTx business landscape has recently seen many developments, from acquisitions to product launches. One of them was Big Health’s acquisition of Limbix, a California-based DTx firm, in July 2023 to bolster its portfolio, including SparkRx, a treatment for adolescents dealing with depression and anxiety. Similarly, in June 2023, Kaia Health launched Angela, a HIPAA-compliant, AI-powered voice-based digital care assistant, to serve as a companion and guide, enhancing the physical therapy experience for patients.

In another development, BehaVR, a DTx company headquartered in Kentucky, and Fern Health, a digital chronic pain management program, merged their companies in November 2023 to create a novel pain management DTx solution that addresses both pain and fear caused by chronic diseases. With this merger, they launched RealizedCare, an app designed to offer a comprehensive solution that collaborates with health plans, employers, and value-based providers to treat a range of behavioral and mental health conditions. This solution provides clinicians with immersive programs specifically designed for in-clinic use. It is initially focusing on chronic pain.

Bankruptcy of Pear and lessons for the industry

However, the most shocking development in the DTx market was the bankruptcy of Pear Therapeutics in 2023. The remains of this once-prominent company were purchased by four other companies for a total of US$6.05 million at an auction. Pear was a big name in the industry since its inception in 2013. It introduced numerous products such as reSET, reSET-O, and Somryst for treating substance use disorder, opioid use disorder, and chronic insomnia, respectively. It was also the first company to receive FDA approval for a mobile app aimed at treating substance use disorders.

Though the company announced layoffs of nearly 20% of its workforce in November 2022, its management expressed optimism about the company’s growth and reduced operating expenses in the third quarter. But in April 2023, the company filed for bankruptcy.

The demise of Pear has opened the eyes of industry experts to the challenges faced by DTx players. Certain issues were unique to Pear itself, such as the comparatively higher prices of its products and the focus on treating challenging conditions such as substance use disorders. However, the bankruptcy of Pear also brings attention to the obstacles that can be faced by any other DTx company. One crucial roadblock is that physicians and payers still approach these products with caution. Additionally, achieving profitability for DTx might be challenging for all types of players, particularly for small start-ups lacking substantial market influence. The bankruptcy of Pear and the challenges it faced can be used by budding DTx companies as a road map as they navigate this complex sector.

EOS Perspective

DTx is all set to revolutionize the medical industry, with a 2020 McKinsey report suggesting it could potentially alleviate the global disease burden by up to 10% by 2040. Given the impact of emerging treatments on stakeholders, pharmaceutical and healthcare companies should consider expanding their portfolio to include DTx solutions.

With telehealth companies seeing good growth in the pandemic and post-pandemic years, an increase in investment can be expected as they are uniquely placed to support prescription DTx. With the growth of the digital health industry, prominent telehealth providers may also choose to acquire DTx businesses or create their own in-house DTx solutions.

Read our related Perspective:
 COVID-19 Outbreak Boosts the Use of Telehealth Services

An increase in industry M&A activities can be expected in the next few years, with growing incidences of chronic illnesses, improved technology penetration across all age groups, and a maturing market. Big names such as Bayer, Novartis, and Sanofi are also entering into partnerships with DTx companies, indicating a bright future for the sector.

Mental health and behavioral therapy are great fields to branch out for companies starting in the DTx landscape, especially in this post-pandemic era. Demand for such services is likely to be sustained, considering the National Institute of Mental Health Disorders estimates that one in four adults in the USA suffers from a diagnosable mental illness, with many suffering from multiple conditions.

Similarly, diseases such as diabetes, cancer, heart, and respiratory ailments are on the rise. Healthcare companies can effectively address these medical areas through the use of DTx applications, providing personalized care for patients. This approach has the potential to manage not only chronic conditions such as diabetes but also terminal illnesses such as cancer.

Many DTx players will likely focus on areas with unmet needs, including pediatrics and metabolic disorders. With seven DTx-based diabetic management solutions already receiving 510(k) clearance as of December 2022, it can be expected that more products addressing the treatment gaps might flood the market.

The DTx industry is gradually maturing and has been receiving significant investments in recent years (US$8 billion in 2022). While experts view it as a profitable market, hesitation remains, particularly following the bankruptcy of Pear Therapeutics.

Nevertheless, due to the COVID-19 pandemic and subsequent lockdown measures, technology adoption among older adults has increased significantly. Hence, strategic investments in DTx by pharmaceutical and healthcare companies, taking into account market conditions, can expect to establish a stronger presence in this industry in the future.

CVS Moves to Home-based Care with Acquisition of Signify Health by EOS Intelligence
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Commentary: CVS Moves to Home-based Care with Acquisition of Signify Health

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Retail health companies increasingly invest in primary care, particularly home-based care, with patients demanding low-cost and convenient care delivery. The recent acquisition of home healthcare company Signify Health by retail health giant CVS Health highlights the industry’s growing interest in home-based care.

There is an increased demand for at-home healthcare services and health assessments, especially after the COVID-19 pandemic changed customer preferences towards access to convenient at-home services.

At-home care can bring down expenses by reducing hospital visits and detecting health problems in advance. A study published by the US Agency for Healthcare Research and Quality in April 2021 indicated that at-home patient care could reduce hospital expenses by 32% and hospital readmission rate (within six months after discharge) by 52%. The study claimed that patients receiving at-home care were less exposed to other illnesses, and this kind of care provided consistent attention, which resulted in better management of chronic diseases and prevention of health problems, reducing hospital readmissions. Apart from lowering the overall cost of care, healthcare providers are also incentivized to lower readmission rates under Medicare incentive programs, and hence, many healthcare companies have realized the potential of investing in at-home services.

One example of this was CVS Health’s acquisition of home health company Signify Health, completed in March 2023, for a total value of US$8 billion. Signify’s network of 10,000 clinicians, nationwide healthcare providers, and proprietary analytics and technology platforms is expected to help CVS extend its at-home health business. Adding Signify’s capabilities, such as at-home healthcare services, health assessments, patient data analytics, Accountable Care Organization (ACO) management, and provider enablement solutions, is likely to strengthen CVS’s abilities to offer better accessibility to services, improved patient-provider connectivity, better coordination of services, and improved quality of services.

CVS increases focus on the Medicare population with at-home health offerings

Looking at the recent acquisitions in the healthcare industry, it can be seen that major players in the retail health space, such as CVS Health, Amazon, Walgreens, Walmart, Dollar General, and Best Buy, are acquiring companies to strengthen their capabilities in offering primary care. These retail health companies are trying to tap into the growing demand for consumer-centric care. In particular, there is an increased focus on senior citizens and patients with chronic diseases.

Almost 19% of the US population is covered under Medicare plans, making it one of the most lucrative segments. In 2022, McKinsey estimated that, by 2025, up to US$265 billion worth of healthcare services provided to traditional Medicare and Medicare Advantage beneficiaries by traditional primary care facilities could potentially navigate to at-home healthcare providers offering at-home health services and virtual primary care services. Retail health companies view primary care services offered at home, traditionally dominated by independent clinics, as an opportunity to enter the healthcare delivery segment. CVS is also heading in the same direction.

CVS Health began expanding beyond its pharmacy services by acquiring health insurance company Aetna in 2018. Aetna is the fourth-largest Medicare Advantage plan, with 3.3 million enrollees in 2023.

In recent years, CVS Health has made significant efforts in building value-based care capabilities. Apart from acquiring Signify Health, which also includes Signify’s Caravan ACO business, the company acquired Medicare-focused primary care provider Oak Street Health in May 2023. These acquisitions indicate CVS’s increasing focus on enhancing healthcare services for the Medicare population.

Read our related Perspective:
Retail Health Clinics Eye a Larger Piece of the US Primary Care Market 

Signify’s acquisition brings CVS closer to its aim to become a full-service health provider

With the acquisition of Signify Health, CVS should be able to enter the at-home healthcare space in addition to its existing 9,900 retail drugstores and 1,100 MinuteClinics. CVS now has the capabilities to fulfill patient needs across the entire care spectrum, operating as a payer, a pharmacy benefit manager, an ACO manager, a chain of medical clinics, a network of primary care centers, and a home-based care provider, becoming a full-service healthcare provider.

This means CVS can make it simpler for patients and providers to navigate the complex healthcare system by centralizing services, as all these healthcare activities are performed under the same company. For instance, CVS can offer Medicare Advantage programs to patients, provide home visits, prescribe medicines, which can be delivered by CVS pharmacy, and track patients’ medication intake, which helps in making pharmacy reconciliations and offering follow-up care by primary care centers if needed. CVS can be able to access accurate and real-time data updates from all patient activities, which would improve care coordination and navigation of healthcare services for patients with real-time data sharing with providers.

CVS-Signify synergies can amplify companies’ growth and capabilities

CVS is enhancing digital capabilities to improve interoperability of electronic health records (EHRs) and enable remote patient monitoring. The company has already developed digital capabilities such as automated messaging on prescriptions, appointments, and vaccinations. CVS can integrate these digital capabilities into Signify’s systems to streamline communication between providers and patients.

CVS is expected to make use of Signify’s home care services to introduce at-home health assessments, which is a highly-demanded service by customers. Signify provided over 2.3 million unique at-home health assessments in 2022 and has witnessed a 16% year-on-year increase in the number of at-home assessments in Q2 2023. Using CVS’s nationwide primary care capabilities, Signify Health is likely to be able to expand its reach in the at-home health assessment space.

Signify’s technological capabilities are likely to strengthen CVS’s position in the market as customers appreciate increased convenience, such as remote patient monitoring, data-driven health predictions, and better navigation through the health systems. CVS can also benefit from Signify’s technological capabilities, such as provider enablement tools that would help manage population health, turnkey analytics, and practice improvement solutions to help providers transition to a value-based reimbursement model and improve the quality of care.

Furthermore, CVS also offers payer-agnostic solutions such as virtual primary care and pharmacy benefits management (CVS Caremark). CVS Caremark has the largest market share in the US pharmacy benefits manager market, with a 33% share in 2022. Signify’s client network of 50 health plan clients, including government, other payers, and private employers, can help CVS expand its payer-agnostic solutions to a diverse set of health plan and employer clients.

EOS Perspective

CVS outbid its rivals, such as Amazon, UnitedHealth Group, and Option Care Health to acquire Signify. Having acquired one of the most sought-after home healthcare companies, CVS has strengthened its position in terms of its expanded capabilities, such as primary care, home health, at-home health assessments, and provider enablement solutions. The company has the benefit of a large customer base, being the largest pharmacy chain in the US in 2022, which will help it expand its primary care and at-home services quickly. It will be interesting to see how CVS would be able to direct 8 million senior citizens who walk into CVS pharmacy stores annually to Oak Street clinics for a wellness visit or encourage them to schedule a home visit via Signify.

However, the competitors, especially the Medicare Advantage competitors, are not lagging behind. The largest Medicare Advantage Plan, UnitedHealth Group, boasting 8.9 million Medicare Advantage enrollees in 2023, announced the acquisition of two home health companies, LHC Group and Amedisys, this year. Humana, the second largest Medicare Advantage Plan with 5.5 million enrollees in 2023, acquired a stake in Kindred at Home in 2021.

Similar to CVS, UnitedHealth Group and Humana also own pharmacy and provider capabilities (including clinic-based, at-home, and telehealth). All three companies are on the task of deriving synergies among the different businesses they own with the aim to improve patient outcomes and reduce overall costs. To outperform the strong competition, the winning company needs to keep focusing on improving healthcare accessibility and patient experience, as well as catering to the evolving consumer needs.

Retail Health Clinics Eye a Larger Piece of the US Primary Care Market by EOS Intelligence
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Retail Health Clinics Eye a Larger Piece of the US Primary Care Market

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The utilization of retail health clinics (RHCs), also known as convenience care clinics, peaked during the coronavirus outbreak, with people rushing to get COVID-19 vaccinations or treatment for minor ailments when access to other care settings was restricted. FAIR Health (a non-profit organization managing a repository of 40 billion claim records) indicated that the utilization of RHCs increased by 51% from 2020 to 2021. Accordingly, the US retail health clinic market grew from US$1.78 billion in 2020 to US$3.49 billion in 2021 (as per estimates by Fortune Business Insights). With increasing familiarity and utilization, are RHCs set out to play a bigger role in the nation’s healthcare system?

RHCs move beyond low-acuity care

RHCs began with the concept of providing low-acuity care, spanning from minor illnesses and injuries to occasional visits for vaccinations or wellness screening. Increasingly, retailers are eyeing a larger share of the primary care market by making inroads into chronic disease management. Several are even expanding into mental and behavioral health.

  • Vaccinations

In 2022, nearly 40% of the patients at the RHCs came in for vaccinations. Much of this footfall can be attributed to the public health advisory recommending booster shots for COVID-19 vaccination. Even though the need for COVID-19 vaccinations is gradually expected to decline, the pandemic has established RHCs as a convenient venue for vaccinations. Before the coronavirus outbreak, about 50,000 adults died every year from ailments that could be prevented by vaccines, highlighting the value offered by RHCs in immunization delivery.

  • Diagnostics

During the pandemic, RHCs became a key provider of COVID-19 testing. Almost all the RHCs today have point-of-care testing capabilities. Flu and strep tests, lipid tests, pregnancy tests, glucose tests, etc., are among the diagnostics tests commonly offered at the RHCs. As RHCs aim to expand their services to penetrate deeper into the primary care market, the scope of diagnostic services is likely to widen. For instance, Walmart, which opened its first RHC in 2019, provides EKG tests and X-ray imagining services on-site as well.

  • Chronic disease management

In 2022, the Centers for Disease Control and Prevention (CDC) estimated that six in ten adults live with a chronic disease. This data indicates the vast opportunity this segment has to offer, and RHCs are vying for a piece of it. Analysis by Definitive Healthcare suggests that, in 2022, about one in ten diagnoses at the RHCs was related to a chronic condition. Nearly 6% of the claims were with the diagnosis of diabetes (Type 2 diabetes mellitus without complications and Type 2 diabetes mellitus with hyperglycemia).

As the opportunity for RHCs to contribute more to chronic disease management is vast, retailers are focusing on evolving the clinic offerings to provide treatment for chronic conditions such as diabetes, hypertension, chronic obstructive pulmonary disease, kidney disease, etc. For instance, in 2020, CVS launched HealthHubs, an enhanced RHC format, offering a larger suite of services including chronic disease management.

RHCs are able to provide chronic disease management at a lower cost. For instance, in 2022, the average charge per claim for Type 2 diabetes mellitus without complications was US$160 at an RHC compared with US$367 at a physician’s office, whereas for Type 2 diabetes mellitus with hyperglycemia, the average charge per claim was US$255 at RHC vs. US$639 at a physician’s office. Given that a chronic disease requires continuous long-term care, patients see RHC as a cost-effective and viable option for chronic disease management.

  • Mental and behavioral health

In early 2022, the Harris Poll data (based on a monthly survey among 3,400 people over the age of 18, physicians, and pharmacists) indicated that 41% of Gen Z and younger millennials were suffering from anxiety or depression conditions. However, the same study found that only 16% of those struggling with these mental conditions were comfortable seeking treatment from a therapist or mental health professional. A mystery shopper study (conducted in 2022) investigating 864 psychiatrists across five US states indicated that only 18.5% of psychiatrists were taking appointments for new patients with a significant wait time (median = 67 days). A person going through a breakdown or depression needs immediate attention. Thus, the low availability of psychiatry outpatient new appointments is concerning and one of the main reasons why mental health issues remain under-treated. With walk-in appointments and easy accessibility, RHCs are well-positioned to fill this gap.

Leading RHC chains have forayed into mental and behavioral health services. In 2020, MinuteClinic (an RHC chain owned by CVS) started offering mental and behavioral health counseling services. The company also added Licensed Mental Health Providers to its staff at select locations. In the same year, Walmart announced counseling services for US$1 a minute in partnership with Beacon Care Services, a subsidiary of Carelon Behavioral Health (formerly Beacon Health Options).

Retail Health Clinics Eye a Larger Piece of the US Primary Care Market by EOS Intelligence

Retail Health Clinics Eye a Larger Piece of the US Primary Care Market by EOS Intelligence

Patient-centric approach differentiates RHCs from traditional providers

Definitive Healthcare estimates that as of March 2023, there were 1,800+ RHCs, of which 90% were owned by retail and pharmacy giants CVS (63%), Kroger (12%), Walgreens (8%), and Walmart (2%). Noticeably, the consumer-centric concepts and learnings from the retail segment have helped RHCs improve patient experience and satisfaction. Implementation of proven retail strategies is, in turn, defining and shaping the convenient care model and setting apart the RHCs from traditional healthcare providers.

  • Omnichannel engagement

Omnichannel engagement is a key retail concept enabling companies to offer a seamless consumer experience across various touchpoints. Health Care Insights Study 2022, based on a survey of 1,000 US-based respondents, indicated that four in ten people had a virtual consultation in the past year. The same study suggested that ~70% of the respondents think that the virtual consultation is better or about the same as the in-person visit. RHCs, owned by big-box retailers and pharmacy giants, are seizing the omnichannel opportunity by complementing their in-person visits with virtual care services.

MinuteClinic (owned by CVS) started piloting telehealth services in 2015. In 2021, the company provided 19 million virtual consultations, of which ~10 million were for mental and behavioral health. The Little Clinic (owned by Kroger) stepped into telehealth services following the country-wide shutdown due to the coronavirus outbreak in March 2020. In 2021, with the aim to extend virtual care, Walmart Health acquired MeMD, a 24/7 telehealth company providing on-demand care for common illnesses, minor injuries, and mental health issues.

  • Walk-in appointments

The average wait time for a primary care physician appointment in the 15 largest cities of the US was 26 days, as per Merritt Hawkins survey data (2022). RHCs typically accept walk-in patients. Moreover, RHCs are open for extended evening hours and over weekends when primary care physicians are not available. This allows the patients to visit an RHC at their convenience.

  • Geographic proximity

RHCs benefit from the wide footprint across the country established by their owners, the big-box retailers. For instance, CVS, operating 1,100 retail clinics across 33 states, indicated that more than half of the US population lives within 10 miles of a MinuteClinic as of March 2022.

However, currently, there is a geographic disparity as the majority of the RHCs are located in urban areas, with only 2% serving the rural population. From the business perspective, it makes sense to concentrate on the metropolitan areas targeting high-income populations. Moreover, just like traditional healthcare providers, RHCs also find it challenging to hire qualified staff to work at remote locations. However, as the popularity and utilization of RHCs increase, expansion to rural areas may come as a natural progression. For instance, Walmart is uniquely positioned to capture the rural market opportunity by leveraging the presence of its 4,000 stores located in medically underserved areas as designated by the Health Resources and Service Administration.

Dollar General is the first retailer to step up and penetrate this unserved market. In January 2023, Dollar General, in partnership with DocGo (a telehealth and medical transportation company), piloted mobile clinics set up at the parking lots at three of its stores in Tennessee. This initiative is Dollar General’s first step into retail healthcare, and there is no clarity yet on whether the company is looking at the in-store clinics model.

  • Fixed and transparent pricing

RHCs have fixed pricing for different types of treatments offered, and the treatment costs are communicated up-front to the patient. The Annual Consumer Sentiment Benchmark report based on a survey conducted in January 2022 indicated that 44% of the 1,006 respondents avoided care because of unknown costs. It is evident that besides the concern over affordability, the anxiety and fear around uncertain costs are making patients avoid healthcare services. RHCs help patients to evade this anxiety through cost transparency.

  • Multiple payment options

At RHCs, patients receive a more retail-like experience at the time of the payment. Besides the common mode of payment such as cash and cards, the RHCs also allow for contactless payments, including digital wallets, tap-to-pay platforms, touchless terminals and, thus making the payment process faster, simpler, and more convenient. This aligns with the growing popularity of contactless transactions. 80% of US consumers used some form of contactless payment mode in 2021, as per a survey of 1,000 US consumers conducted by Raydiant (an in-location experience management platform).

  • Technology and automation

Technology and automation have been an integral part of modern retail. A reflection of this is seen in an RHC setup. For instance, at CVS MinuteClinic, the reception is a form of self-service kiosk. The patient is notified of the wait time (if any) and directed to fill out the electronic forms to share important personal and health-related data. The information submitted by the patient is directly shared with the healthcare professional on-site, who then confirms the details and proceeds with the diagnosis and course of treatment. Details of the diagnosis and treatment, along with the bill payment receipt, are automatically shared with the patient at the end of the visit. The communication for follow-up consultations or other reminders is automated. The process is highly streamlined and backed by automation.

Moreover, in the RHC model, the application of technology can be seen not only to improve patient experience but also to support clinical decision-making. For instance, in 2019, CarePortMD RHCs (owned by Albertsons grocery stores) started using the autonomous AI diagnostic system called LumineticsCore to detect a leading cause of blindness in diabetic patients. Such technological additions reduce the chances of human error, thus eliminating potential liability issues as well as increasing patient confidence. Walgreens, leveraging Inovalon’s Converged Patient Assessment decision support platform that provides insights into possible diagnoses using predictive analytics, is another case in point.

EOS Perspective

With all the growth and progress, RHCs are penetrating the underserved population and strengthening the current primary care delivery model. A report released by the National Association of Community Health Centers in February 2023 indicated that about a third of the US population does not have access to primary care. RHCs are well-positioned to fill this gap. Moreover, according to the data published by the Association of American Medical Colleges in 2021, the USA could struggle with a shortage of up to 124,000 physicians (across all specialties) by 2034. In the face of physician shortage, RHCs providing non-emergency care can help to alleviate the burden on the primary care providers.

To what extent the RHCs would be able to carve out a space for themselves in the primary care segment is still an ongoing debate. However, the owners of RHCs are determined to compete head-on with the traditional providers for the primary care market share and are rapidly foraying into alternative primary care models.

In May 2023, CVS completed the acquisition of Oak Street Health providing primary care to Medicare patients through its network of 169 medical centers across 21 states.

Walgreens holds a majority stake in VillageMD, offering value-based primary care to patients at 680 practice locations (including independent practices, Summit Health, CityMD, and Village Medical clinics at Walgreens, as well as at-home and virtual visits) across 26 states. In October 2021, Walgreens acquired a 55% stake in CareCentrix, an at-home care provider serving post-acute patients. The company has plans to acquire the remaining stake by the end of this year.

Amazon is another prominent retailer that made inroads in the primary care space this year with its acquisition of One Medical, a primary care provider with a network of 200+ medical offices in 27 markets across the USA.

It is foreseeable that at some point in time, the retailers will try to bring in the synergies between the RHC business and other alternative primary care service offerings with the aim to become a one-stop shop for all healthcare needs. As retailers take on a larger role in primary care delivery, the retailization of healthcare is certainly on the way.

Scarcity Breeds Innovation - The Rising Adoption of Health Tech in Africa by EOS Intelligence
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Scarcity Breeds Innovation – The Rising Adoption of Health Tech in Africa

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Africa carries the world’s highest burden of disease and experiences a severe shortage of healthcare workers. Across the continent, accessibility to primary healthcare remains to be a major challenge. During the COVID-19 pandemic, several health tech companies emerged and offered new possibilities for improving healthcare access. Among these, telemedicine and drug distribution services were able to address the shortage of health workers and healthcare facilities across many countries. New health tech solutions such as remote health monitoring, hospital automation, and virtual health assistance that are backed by AI, IoT, and predictive analytics are proving to further improve health systems in terms of costs, access, and workload on health workers. Given the diversity in per capita income, infrastructure, and policies among African countries, it remains to be seen if health tech companies can overcome these challenges and expand their reach across the continent.

Africa is the second most populated continent with a population of 1.4 billion, growing three times faster than the global average. Amid the high population growth, Africa suffers from a high prevalence of diseases. Infectious diseases such as malaria and respiratory infections contribute to 80% of the total infectious disease burden, which indicates the sum of morbidity and mortality in the world. Non-communicable diseases such as cancer and diabetes accounted for about 50% of total deaths in 2022. High rates of urbanization also pose the threat of spreading communicable diseases such as COVID-19, Ebola, and monkey fever.

A region where healthcare must be well-accessible is indeed ill-equipped due to limited healthcare infrastructure and the shortage of healthcare workers. According to WHO, the average doctor-to-population ratio in Africa is about two doctors to 10,000 people, compared with 35.5 doctors to 10,000 people in the USA.

Poor infrastructure and lack of investments worsen the health systems. Healthcare expenditure (aggregate public healthcare spending) in African countries is 20-25 times lower than the healthcare expenditure in European countries. Governments here typically spend about 5% of GDP on healthcare, compared with 10% of GDP spent by European countries. Private investment in Africa is less than 25% of the total healthcare investments.

Further, healthcare infrastructure is unevenly distributed. Professional healthcare services are concentrated in urban areas, leaving 56% of the rural population unable to access proper healthcare. There are severe gaps in the number of healthcare units, diagnostic centers, and the supply of medical devices and drugs. Countries such as Zambia, Malawi, and Angola are placed below the rank of 180 among 190 countries ranked by the WHO in terms of health systems. Low spending power and poor national health insurance schemes discourage people from using healthcare services.

Health tech solutions’ potential to fill the healthcare system gaps

As the prevailing health systems are inadequate, there is a strong need for digital solutions to address these gaps. Health tech solutions can significantly improve the access to healthcare services (consultation, diagnosis, and treatment) and supply of medical devices and drugs.

Health tech solutions can significantly improve the access to healthcare services (consultation, diagnosis, and treatment) and supply of medical devices and drugs.

For instance, Mobihealth, a UK-based digital health platform founded in 2017, is revolutionizing access to healthcare across Africa through its telemedicine app, which connects patients to over 100,000 physicians from various parts of the world for video consultations. The app has significantly (by over 60%) reduced hospital congestion.

Another example is the use of drones in Malawi to monitor mosquito breeding grounds and deliver urgent medical supplies. This project, which was introduced by UNICEF in 2017, has helped to curb the spread of malaria, which typically affects the people living in such areas at least 2-3 times a year.

MomConnect, a platform launched in 2014 by the Department of Health in South Africa, is helping millions of expectant mothers by providing essential information through a digital health desk.

While these are some of the pioneers in the health-tech industry, new companies such as Zuri Health, a telemedicine company founded in Kenya in 2020, and Ingress Healthcare, a doctor appointment booking platform launched in South Africa in 2019, are also strengthening the healthcare sector. A study published by WHO in 2020 indicated that telemedicine could reduce mortality rates by about 30% in Africa.

The rapid rise of health tech transforming the African healthcare landscape

Digital health solutions started to emerge during the late 2000’s in Africa. Wisepill, a South African smart pill box manufacturing company established in 2007, is one of the earliest African health tech success stories. The company developed smart storage containers that alert users on their mobile devices when they forget to take their medication. The product is widely used in South Africa and Uganda.

The industry gained momentum during the COVID-19 pandemic, with the emergence of several health tech companies offering remote health services. The market experienced about 300% increase in demand for remote healthcare services such as telemedicine, health monitoring, and medicine distribution.

According to WHO, the COVID pandemic resulted in the development of over 120 health tech innovations in Africa. Some of the health tech start-ups that emerged during the pandemic include Zuri Health (Kenya), Waspito (Cameroon), and Ilara Health (Kenya). Several established companies also developed specific solutions to tackle the spread of COVID-19 and increase their user base. For instance, Redbird, a Ghanaian health monitoring company founded in 2018, gained user attention by launching a COVID-19 symptom tracker during the pandemic. The company continues to provide remote health monitoring services for other ailments, such as diabetes and hypertension, which require regular health check-ups. Patients can visit the nearest pharmacy instead of a far-away hospital to conduct tests, and results will be regularly updated on their platform to track changes.

Scarcity Breeds Innovation – The Rising Adoption of Health Tech in Africa by EOS Intelligence

Start-ups offering advanced solutions based on AI and IoT have been also emerging successfully in recent years. For instance, Ilara Health, a Kenya-based company, founded during the COVID-19 pandemic, is providing affordable diagnostic services to rural population using AI-powered diagnostic devices.

With growing internet penetration (40% across Africa as of 2022) and a rise in investments, tech entrepreneurs are now able to develop solutions and expand their reach. For instance, mPharma, a Ghana-based pharmacy stock management company founded in 2013, is improving medicine supply by making prescription drugs easily accessible and affordable across nine countries in Africa. The company raised a US$35 million investment in January 2022 and is building a network of pharmacies and virtual clinics across the continent.

Currently, 42 out of 54 African countries have national eHealth strategies to support digital health initiatives. However, the maximum number of health tech companies are concentrated in countries such as South Africa, Nigeria, Egypt, and Kenya, which have the highest per capita pharma spending in the continent. Nigeria and South Africa jointly account for 46% of health tech start-ups in Africa. Telemedicine is the most offered service by start-ups founded in the past five years, especially during the COVID-19 pandemic. Some of the most popular telemedicine start-ups include Babylon Health (Rwanda), Vezeeta (Egypt), DRO Health (Nigeria), and Zuri Health (Kenya).

Other most offered services include medicine distribution, hospital/pharmacy management, and online booking and appointments. Medicine distribution start-ups have an immense impact on minimizing the prevalence of counterfeit medication by offering tech-enabled alternatives to sourcing medication from open drug markets. Many physical retail pharmacy chains, such as Goodlife Pharmacy (Kenya), HealthPlus (Nigeria), and MedPlus (Nigeria), are launching online pharmacy operations leveraging their established logistics infrastructure. Hospitals are increasingly adopting automation tools to streamline their operations. Electronic Medical Record (EMR) management tools offered by Helium Health, a provider of hospital automation tools based in Nigeria are widely adopted in six African countries.

Medicine distribution start-ups have an immense impact on minimizing the prevalence of counterfeit medication by offering tech-enabled alternatives to sourcing medication from open drug markets.

For any start-up in Africa, the key to success is to provide scalable, affordable, and accessible digital health solutions. Low-cost subscription plans offered by Mobihealth (a UK-based telehealth company founded in 2018) and Cardo Health (a Sweden-based telehealth company founded in 2021) are at least 50% more affordable than the average doctor consultation fee of US$25 in Africa. Telemedicine platforms such as Reliance HMO (Nigeria) and Rocket Health (Uganda) offer affordable health insurance that covers all medical expenses. Some governments have also taken initiatives in partnering with health tech companies to provide affordable healthcare to their people. For instance, the Rwandan government partnered with a digital health platform called Babylon Health in 2018 to deliver low-cost healthcare to the population of Rwanda. Babylon Health is able to reach the majority of the population through simple SMS codes.

Government support and Public-Private Partnerships (PPPs)

With a mission to have a digital-first universal primary care (a nationwide program that provides primary care through digital tools), the Rwandan government is setting an example by collaborating with Babylon Health, a telemedicine service that offers online consultations, appointments, and treatments.

As part of nationwide digitization efforts, the government has established broadband infrastructure that reaches 90% population of the country. Apart from this, the country has a robust health insurance named Mutuelle de Santé, which reaches more than 90% of the population. In December 2022, the government of Ghana launched a nationwide e-pharmacy platform to regulate and support digital pharmacies. Similarly, in Uganda, the government implemented a national e-health policy that recognizes the potential of technology in the healthcare sector.

MomConnect, a mobile initiative launched by the South African government with the support of Johnson and Johnson in 2014 for educating expectant and new mothers, is another example of a successful PPP. However, apart from a few countries in the region, there are not enough initiatives undertaken by the governments to improve health systems.

Private and foreign investments

In 2021, health tech start-ups in Africa raised US$392 million. The sustainability of investments became a concern when the investments dropped to US$189 million in 2022 amid the global decline in start-up funding.

However, experts predict that the investment flow will improve in 2023. Recently, in March 2023, South African e-health startup Envisionit Deep AI raised US$1.65 million from New GX Ventures SA, a South African-based venture capital company. Nigerian e-health company, Famasi, is also amongst the start-ups that raised investments during the first quarter of 2023. The company offers doorstep delivery of medicines and flexible payment plans for medicine bills.

The companies that have raised investments in recent years offer mostly telemedicine and distribution services and are based in South Africa, Nigeria, Egypt, and Kenya. That being said, start-ups in the space of wearable devices, AI, and IoT are also gaining the attention of investors. Vitls, a South African-based wearable device developer, raised US$1.3 million in funding in November 2022.

Africa-based incubators and accelerators, such as Villgro, The Baobab Network, and GrowthAfrica Accelerator, are also supporting e-health start-ups with funding and technical guidance. Villgro has launched a US$30 million fund for health tech start-ups in March 2023. Google has also committed US$4 million to fund health tech start-ups in Africa in 2023.

Digital future for healthcare in Africa

There were over 1,700 health tech start-ups in Africa as of January 2023, compared with about 1,200 start-ups in 2020. The rapid emergence of health tech companies is addressing long-running challenges of health systems and are offering tailored solutions to meet the specific needs of the African market.

Mobile penetration is higher than internet penetration, and health tech companies are encouraged to use SMS messaging to promote healthcare access. However, Africa is expected to have at least 65% internet penetration by 2025. With growing awareness of the benefits of health tech solutions, tech companies would be able to address new markets, especially in rural areas.

Companies that offer new technologies such as AI chatbots, drones, wearable devices for remote patient monitoring, hospital automation systems, e-learning platforms for health workers, the Internet of Medical Things (IoMT), and predictive analytics are expected to gain more attention in the coming years. Digitally enabled, locally-led innovations will have a huge impact on tackling the availability, affordability, and quality of health products and services.

Digitally enabled, locally-led innovations will have a huge impact on tackling the availability, affordability, and quality of health products and services.

Challenges faced by the health tech sector  

While the African health tech industry has significantly evolved over the last few years, there are still significant challenges with regard to infrastructure, computer literacy, costs, and adaptability.

For instance, in Africa, only private hospitals have switched to digital records. Many hospitals still operate without computer systems or internet connections. About 40% of the population are internet users, with countries such as Nigeria, Egypt, South Africa, Morocco, Ghana, Kenya, and Algeria being the ones with the highest number of internet users (60-80% of the population). However, 23 countries in Africa still have low internet penetration (less than 25%). This is the major reason why tech companies concentrate in the continent’s largest tech hubs.

On the other hand, the majority of the rural population prefers face-to-face contact due to the lack of digital literacy. Electricity and internet connectivity are yet to reach all parts of the region and the cost of the internet is a burden for many people. Low-spending power is a challenge, as people refuse to undergo medical treatment due to a lack of insurance schemes to cover their medical expenses. Insurance schemes provided in Africa only cover 60% of their healthcare expenses. Even though health tech solutions bring medical costs down, these services still remain unaffordable for people in low-income countries. Therefore, start-ups do not prefer to establish or expand their services in such regions.

Another hurdle tech companies face is the diversity of languages in Africa. Africa is home to one-third of the world’s languages and has over 1,000 languages. This makes it difficult for companies to customize content to reach all populations.

Amidst all these challenges, there is very little support from the governments. The companies face unfavorable policies and regulations that hinder the implementation of digital solutions. Only 8% of African countries have online pharmacy regulations. In Nigeria, regulatory guidelines for online pharmacies only came into effect in January 2022, and there are still unresolved concerns around its implementation.

Lack of public investment and comprehensive government support also discourage the local players. Public initiatives are rare in providing funding, research support, and regulatory approval for technology innovations in the health sector. Private investment flow is low for start-ups in this sector compared to other industries. Health tech start-ups raised a total investment of US$189 million in 2022, which is not even 10% of the total investments raised by start-ups in other sectors in Africa. Also, funding is favored towards the ones established in high-income countries. Founders who don’t have ties to high-income countries struggle to raise funds.

EOS Perspective

The emergence of tech health can be referred to as a necessary rise to deal with perennial gaps in the African healthcare system. Undoubtedly, many of these successful companies could transform the health sector, making quality health services available to the mass population. The pandemic has spurred the adoption of digital health, and the trend experienced during the pandemic continues to grow with the developments in the use of advanced technologies such as AI and IoT. Telemedicine and distribution have been the fastest-growing sectors driven by the demand for remote healthcare services during the pandemic. Home-based care is likely to keep gaining momentum with the development of advanced solutions for remote health monitoring and diagnostic services.

Home-based care is likely to keep gaining momentum with the development of advanced solutions for remote health monitoring and diagnostic services.

With the increasing internet penetration and acceptance of digital healthcare, health tech companies are likely to be able to expand their reach to rural areas. Right policies, PPPs, and infrastructure development are expected to catalyze the health tech adoption in Africa. Companies that offer advanced technologies such as IoT-enabled integrated medical devices, AI chatbots, drones, wearable devices for remote patient monitoring, hospital automation systems, e-learning platforms for health workers, and predictive analytics for health monitoring are expected to emerge successfully in the coming years.

by EOS Intelligence EOS Intelligence No Comments

High Production Costs Dampen Camel Milk Market Potential

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Over the past few years, dairy-caused allergies and the growing debate regarding the inherent benefits and disadvantages of consumption of cow milk and its products have made consumers look for alternative sources to traditional dairy products. One product that has been growing in popularity owing to this is camel milk. Deemed to be the most expensive milk in the market, camel milk is known to have several medicinal values, especially for the treatment of diabetes, orthopedic problems, and autoimmune diseases. Few studies also claim that it is beneficial for the treatment of autism. While camel milk remains a niche product at the moment, it will be interesting to see if this product can make a dent in the massive dairy-milk industry, especially with the presence of several other healthy plant-based milk alternatives.

Growing demand and expanding production

Camel milk is not a new product as it has been consumed in the Middle East for ages, however, it is only recently that it has sparked global interest. Owing to its significant health benefits (primarily for diabetes), the product has found traction especially in developed countries, such as the USA, parts of Europe, Singapore, and Australia. The global market, which was valued at about US$4.24 billion in 2017 is estimated to register a CAGR of about 7% during 2018-2022.

Investments to expand Australian camel milk production

In response to the growing demand, several companies (especially across Australia) are entering the camel milk space and are increasing their investments in the sector.

Australia’s Wild Camel Corporation has expressed plans to increase its herd size five-fold from 450 camels to 2,500 camels over the next two years.

Similarly, Western Australia-based Good Earth dairy, which in mind-2018 had about 100 camels, plans to expand to 3,300 camels by June 2020, which would help the dairy produce about 10,000 liters of camel milk in a day.

Victoria-based The Camel Milk Co. doubled its milk output in 2017 to reach 250 liters a day from a herd of 250 camels. It has also maintained a scope for further expansion by moving to a farm that can house a herd of 1,000 camels, planning to increase its herd size along with growing demand.

International investments are also pouring into Australia’s camel milk market. In 2017, UAE-based investors funded a US$6 million (AUD8 million) pilot camel milk farm at Rochester, Australia. Several Chinese investors are also reported to be interested in investing in the camel milk business in the country.High Production Costs Dampen Camel Milk Market Potential

India’s camel milk production grows as well

In addition to Australia, India (and a few African countries, such as Kenya and Ethiopia) has also focused on increasing camel milk production.

India-based Aadvik Foods and Products, which procures raw camel milk from Indian camel breeders and herders and processes and markets it, has significantly increased its scale of operations. It started with procuring and processing 80-100 liters milk per month in 2015 and moved on to procuring and processing close to 8,000 liters per month in 2017.

In January 2018, Rajasthan’s State Government (in partnership with Jaipur-based Saras Dairy) announced its plans to set up a mini camel milk plant in Jaipur. The plant will cost US$1 million (INR 70 million) and is expected to be set up by the end of the year. Post the establishment of the Jaipur plan, the government plans to open another mini plant in Bikaner.

Expanding food product lines

In addition to processing and marketing camel milk, several companies across the globe are expanding their product base to include camel milk products such as milk powder, chocolate, cheese, infant formula, ice cream, etc.

In 2016, Desert Farms, a US-based camel milk company, added camel milk soaps and camel milk powder to its product range.

In 2017, India-based Aadvik Foods, also extended its camel milk product line to include camel milk chocolates and milk powder.

In a similar move, Amul, one of India’s largest dairy cooperatives, launched camel milk chocolates in late 2017. Unlike most other players in the market, Amul has first started with chocolates and then wishes to enter the packaged camel milk market in the near future.

In 2018, Australia’s QCamel announced its plan to launch camel-milk chocolates for the Australian as well as international markets.

In February 2018, UAE-based Camelicious launched the world’s first camel milk infant formula for children aged one to three, an alternative for children who are lactose-intolerant.

The camel products for children are praised for their benefits, as camel milk is the closest alternative to mother’s milk in terms of nutritional value. Since camel milk is beneficial for children as it has higher iron and vitamin C content compared with other milk options, products such as chocolates, infant formula, and ice cream, seem to be smart product extensions, especially if such benefits are highlighted through marketing.

Moreover, product extensions help companies reach a greater audience for their camel milk. Since camel milk is saltier than the largely consumed cow milk, products such as chocolates, help garner users that otherwise may reject camel milk due to taste preferences.

High retail prices hamper demand growth

While camel milk as a product is gaining popularity and acceptance globally, it is not without its share of challenges. Camel milk is the most expensive type of milk in the market.

In the USA, Desert Farms sells one gallon of camel milk for US$144 (US$38 per liter), while it sells a kg of camel milk powder for about US$370. In comparison, a gallon of cow milk sells for about US$3.50 in the USA.

In Singapore, a liter of camel milk sells for about US$19 per liter (US$72 per gallon). In comparison, cow milk sells for close to US$8 per gallon in Singapore.

Similarly, camel milk in India costs about US$7 per liter and camel milk powder costs close to US$87 per kg, whereas cow milk retails for about US$0.6 per liter.

While the benefits of camel milk are plentiful, they do not always justify the high price in the eyes of the consumer. The high cost can be attributed to the high production cost and low yield compared with dairy cattle produce.

In Australia, the cost of producing one liter of camel milk is around US$13 (AUD17), while in India a liter of camel milk cost US$5-6 (INR 350-400) to produce – in comparison to this, producing one liter of cow milk costs farmers about US$0.27-0.32 (AUD0.37-0.44) per liter in Australia and US$0.2-0.27 (INR 14-22) per liter in India.

Camels also produce less milk in comparison with cows. While cows produce around 16 liters a day, a camel usually produces only 6 liters a day.

While the benefits of camel milk are plentiful, they do not always justify the high price in the eyes of the consumer.

In addition to the barrier of high price and costs, camel milk also faces significant competition from plant-based milk alternatives, such as soy, almond, and coconut milk. These milk options are also considered to be a healthy alternative to cow milk and have the added benefit of being vegan. Moreover, while these milk options are more expensive in comparison with cow milk, their prices are still considered more reasonable when compared with camel milk price.

EOS Perspective

Camel milk has a lot of inherent benefits, which are expected to ensure steady sales growth over the next decade. While there are no doubts regarding the growing popularity of camel milk, it is too far-fetched to say that this market can dent the dairy mega-industry. Camel milk market is standing at the beginning of its promising growth curve, however, it must work towards pushing the production costs down to become more mainstream rather than niche, which will not be achieved by simply marketing the medicinal properties of the product.

Camel milk market is standing at the beginning of its promising growth curve, however, it must work towards pushing the production costs down to become more mainstream.

Several dairy farms across the globe have realized this aspect and are working towards achieving economies of scale and getting costs down through increasing operations size and venturing into extended product lines. While it is certain that the industry will continue to grow, it is yet to be seen whether it can create a shelf space for itself across large retail stores or whether it remains a primarily niche premium online sales product mostly for affluent consumers.

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