Integrated Digital
Health Systems
(IDHS)

Tech-enabled solutions for chronic conditions (non-communicable diseases) in Mexico including Diabetes, Hypertension, Dyslipidemia, and Obesity.

A digital hub that maximizes early diagnostic and disease management through integrated services that improve health outcomes of patients and adds value to key industry players like healthcare practitioners, pharmaceutical companies, and health insurance providers by deploying medical diagnostic tools, remote monitoring capabilities, and interconnecting medical clinics, clinical laboratories, and pharmacies or logistic operators (drug delivery).

A novel solution to medical prescription switch and low treatment adherence to significantly increase ROI of pharmaceutical companies and enable both real-world clinical data and detailed commercial data for medical, clinical studies, marketing, and sales (commercial) areas.

Patient Centric Solutions

Main strategic pain-points addressed through Integrated Digital Health Systems (IDHS).

Early Diagnosis

Mexican population (ENSANUT) shows very high prevalence of chronic conditions: diabetes (18%), hypertension (32%), dyslipidemia (37%), obesity (37%), and morbid obesity (6%).

Studies reveal severe underdiagnosis of up to 50% for these chronic conditions. Patients not timely identified are often diagnosed only when medical complications arise.

Complications can be severe and irreversible, such as end-organ damage including kidneys, eyes, heart and blood vessels, nerves, and liver.

There is a massive need for timely identification and diagnosis of chronic conditions.

Disease Management
(Control)

Even among diagnosed patients, control rates are estimated to be lower than 30%: 7/10 people with these chronic conditions are uncontrolled and will develop complications sooner or later.

Patients under medical treatment are also at risk of complications because average treatment adherence is well below 50%: medicated patients take less then half the pills/doses indicated.

This dynamic translates into premature deaths and unnecessary personal and family suffering.

The need to solve this issue is enormous and the benefits of doing so are significant in both human and financial/economic terms.

Integrated Solutions

To solve for Early Diagnosis and Disease Management, the health ecosystem needs to evolve into an integrated system (IDHS) driven by tech where key stakeholders act in coordination, for the benefit of the patient.

An independent actor is required to unify/coordinate/modernize the necessary services including remote monitoring and reporting, data integration, medical clinics, clinical laboratories, health insurance, and supply chain (drug delivery).

The only solution is to eliminate all excuses and limitations from the POV of the person at risk of developing chronic conditions or the patient that already lives with them.

Industry Centric Solutions

Main strategic pain-points addressed through Integrated Digital Health Systems (IDHS).

Prescription Switch and Treatment Adherence

Conflict of interest arises in countries that allow pharmacy chains to market own branded labels (OBL) because pharmacies have financial incentives to switch prescriptions to their higher-margin OBLs, potentially prioritizing profit over patient needs.

In Mexico, this issue is aggravated because there is no level playing field; pharmacy chains know who their customers are and can market their OBLs directly while pharmaceutical companies generally cannot access and use personal patient data.

This dynamic significantly limits what multinational pharmaceutical companies can do (directly) to reduce the negative impact of prescription switch and low treatment adherence.

There is a massive opportunity to help these organizations reduce impact of switch and low adherence, potentially protecting hundreds of millions of dollars in lost sales compared to prescriptions generated.

Improve Patient Outcomes
and increase ROI

An independent player operating as an Integrated Digital Health System (IDHS) has the potential to reconfigure the whole patient journey for improved health outcomes and value creation:

1. Enable mass early diagnosis outside of medical clinics and channel patients to a network of allied healthcare practitioners (HCP);
2. "Catch" patients when HCP diagnoses or prescribes medication: patient support programs (PSP), electronic health record (EHR), and digital medical prescription (eRx);
3. Bypass pharmacy chains (switch) by offering direct delivery of medicines with a PSP that offers lowest possible price for patients with high treatment adherence;
4. Enhance HCP practice: automate patient monitoring/reporting with simplified AI systems that enable remote readings, interactions (messages) and integrated clinical studies;

These tools/systems can positively impact health outcomes for the general population as they maximize prevention, early diagnosis, and control (disease management); they also reduce prescription switch and increase treatment adherence, which ultimately improves ROI
(sales per Rx generated).

Real-World Clinical
and Commercial Data

Additionally, the Integrated Digital Health System (IDHS) can help pharmaceutical companies generate and access real-world clinical data and detailed commercial data in full regulatory compliance:

5. Design and implement protocols to gather real-world clinical data for scientific initiatives, and detailed commercial data for ROI analysis and decision making, which can be translated into improved value proposition to the patient through a highly measurable PSP;

6. Deploy "insulated" front-end applications to enable all areas to access relevant data (full regulatory compliance).

The implementation of this Integrated Digital Health System can (i) multiply the speed at which scientific/commercial actions are designed, implemented, tested, and improved; and (ii) generate unprecedented value for key stakeholders: patients, HCPs, and pharmaceutical companies.

How does an
IDHS look?

Integrated Digital Health System

There is no single answer to this question. An IDHS can take the form that best fits the needs of a population of patients and the key stakeholders in charge of providing healthcare solutions to them.

What an IDHS must be is a flexible and reliable system capable of interconnecting with a wide array of stakeholders through diverse tools such as APIs, personalized front-ends, specialized applications like EHR and eRx, and even WhatsApp messages with autonomous (AI) information exchange including remote monitoring.

The IDHS described in this paper is based on the identified needs of the chronic population here stated and the characteristics of the local healthcare ecosystem.

Step 1: Determine Size of Opportunity

For Chronic Diseases Segment, upside opportunity is estimated at USD 1.625 Bn over a base of USD 0.625 Bn or a 3.6X base multiplier.

Simplified back of the envelope market and opportunity sizing:

1. Total Pharmaceutical Market in Mexico has a value of USD 20 Bn;
2. Private Market accounts for 80% or about USD 16 Bn;

3. Chronic Diseases Segment (PM) worth close to USD 2.50 Bn:
+ Diabetes: USD 1.60 Bn,

+ Hypertension: USD 0.50 Bn,

+ Dyslipidemia: USD 0.30 Bn,

+ Obesity: USD 0.10 Bn;

4. Chronic Diseases Segment (PM) patent vs off-patent split:
+ Innovative Pharma: 25% value share, USD 0.625 Bn:

- Patent/Innovative: 60% value share, USD 0.37 Bn,

- Off-patent (switch risk): 40% value share, USD 0.25 Bn,

+ Generic Pharma: 75% value share, USD 1.875 Bn.

Note: Innovative Pharma category includes international pharmaceutical companies with innovative/patented products. Generic Pharma includes national and international pharmaceutical companies focused on selling generics.

5. Evaluate potential impact of a 50% improvement in diagnosis: from 50% diagnosis rate to 75%.

If diagnosis improves from 50% to 75%, then Chronic segment value +50% from USD 2.50 Bn to USD 3.75 Bn (+1.25 Bn); since Innovative Pharma drives this initiative, it captures 50% of growth (vs. 25% base market share):

+ Innovative Pharma: 33% value share, USD 1.25 Bn,

+ Generic Pharma: 67% value share, USD 2.50 Bn;

6. Evaluate potential impact of reduction in switch of medical prescriptions: from 50% switch to 25%.

If prescription switch is reduced from 50% to 25% for Innovative Pharma, then off-patent sales improve +50% from USD 0.50Bn to USD 0.75Bn:

+ Innovative Pharma: 40% value share, USD 1.50 Bn,

+ Generic Pharma: 60% value share, USD 2.25 Bn;

7. Evaluate potential impact of a 50% improvement in adherence of PSP beneficiaries: from 50% adherence to 75% adherence.

If adherence improves from 50% to 75% for Innovative Pharma, then the Chronic Diseases (PM) segment participation shifts to:

+ Innovative Pharma: 50% value share, USD 2.25 Bn,

+ Generic Pharma: 50% value share, USD 2.25 Bn;

Notes:
- This simplified analysis does not account for differences in ASP between Innovative and Generics, but is solid enough to estimate potential financial upside.

- Improving diagnosis grows the market segment for all incumbents and market share for Innovative Pharma grows as it drives this initiative.

- Reducing switch keeps market segment volume (units) stable and increases market share for Innovative Pharma.

- Improving adherence grows sales and market share for Innovative Pharma only as this initiative impacts patients that benefit from PSPs.

Conclusion: a well implemented strategy executed by Innovative Pharma to increase diagnosis, improve adherence and reduce prescription switch has the potential to grow the Chronic Diseases (PM) segment from USD 2.50 Bn to USD 5.50 Bn out of which Global Pharma may capture 50% value share of total segment which implies a growth/upside opportunity of USD 1.625Bn on top of a base of USD 0.625 (3.6X base multiplier). Financial upside is too large to ignore.

Similar game plans are a must for Innovative Pharma companies participating in the Chronic Diseases segment in Mexico. If no actions are taken in this direction, expect imminent value share degradation at segment level (patent cliff + off-patent switch) and downward pricing pressure for off-patent products.

Step 2:
Determine IDHS model and MVP

A complete IDHS model connects all relevant stakeholders and processes:

Stakeholders: Patients, HCPs, Clinical Labs, Pharmacies, Pharma Companies, Others.

Processes:
executing and interconnecting remote health, medical appointments, lab samples/results, medicine delivery, EHR, eRx, real-world clinical/commercial data data, others.

The global pharmaceutical industry has significant structural similarities to the banking industry:

1) Market dominated by global leaders that are highly traditional and complacent with status quo: perception that their position within a highly traditional/regulated industry is a bulletproof vest for their enormous P&Ls;

2) Potential new entrants that perceive a huge global market ripe for innovation: implementation of novel technologies/processes that improve customer experience, and business models that aim to monetize lethargic local regulation and incumbent's slow response/innovation speed;

3) Dominant global players "limited" by international regulations that make these organizations "fear-driven", wary of multi-billion fines/penalties; as opposed to local players that are less risk-averse because local regulation' enforcement is weaker.

4) Local markets are large and attractive enough to build multi-billion businesses without the need to become true global players: LATAM startups in FinTech can gain millions of customers by focusing on 2-3 markets: Mexico, Brazil, and Colombia.

In the banking industry, FinTechs achieved exponential growth during the last decade, fueled by investments from VC/PE firms, while operating under less strict regulations and are now transforming into regulated banks, effectively becoming the go-to option for young customers and disrupting an industry where most legacy incumbents are now playing catch-up.

In the healthcare industry in Mexico, pharmacy chains are already "eating the lunch" of Innovative Pharma and they achieved so without true technological disruption: just by taking advantage of regulation' asymmetries between local and international markets, they developed their Own Branded Labels and marketed them directly to their customers, quickly eroding market share and ROI of their "strategic partners" (Innovative Pharma). Through this dynamic, pharmacy chains became the true giants of the industry and they are set to establish a solid monopoly at the expense of Innovative Pharma unless technological disruption changes customer behavior (patient journey) and market dynamics.

The question is wether this technological disruption will be driven/supported by Innovative Pharma, improving health outcomes for patients while protecting their market share; or without its participation/leadership, resulting in further market share and ROI erosion.

The following diagram simplifies the main pain points to be solved from the POV of Innovative Pharma (MVP) regarding the implementation of new systems, processes and technologies to achieve previously defined targets:

The minimum value proposition (MVP) aims at achieving the following:

i. Increase diagnosis outside of Private Health infrastructure;
ii. Reduce prescription switch by pharmacy chains;
iii. Increase treatment adherence of prescribed patients;
iv. Generate real-world clinical/commercial data;

v. Enable actions to improve treatment outcomes.

Now, in order to achieve these goals, a number of ideas are proposed:

1. Improve Diagnosis Rate:

a. Captive Populations: first priority is to focus on captive populations, mainly large groups of employees and their families. Target allies include companies with +1,000 employees, healthcare/wellness service providers for these companies, worker unions representing employees, and other companies or non-profits performing health campaigns at large companies, inc. those focusing on eye care.

b. Other Populations: second priority is to team-up with Municipalities, States, Federal Government, and NGOs to support health campaigns where diagnosis tools may be implemented as part of the campaign.

c. Diagnosis Processes, Tools and Technology: integrate into a single platform. Rely on data and risk factors typically measured during healthcare campaigns (BMI & WHR indexes, family medical history, blood glucose & blood pressure readings) and introduce new tools such as fundus retinal photography for identification of blood vessel damage linked to diabetes/hypertension and other novel diagnosis technologies. Include blood and urine lab studies for diagnosis confirmation. Data from 3rd parties can be integrated through APIs, shared drives with CSV files, and/or direct processing of PDFs.

2. Reduce Prescription Switch,
3. Increase Treatment Adherence:

a. Channel potential patients to network of allied HCPs, medical clinics and hospitals, where diagnosis and medical treatment is confirmed. Offer these stakeholders free use/integration of EHR, eRx, and remote monitoring tools linked to Patient Support Programs (PSP) designed to facilitate work for the HCP and improve medical outcomes for the patient. Provide low-friction solutions like WhatsApp automated interactions for patients/HCPs unwilling to use specialized Apps, Websites, and software, as a means to maximize conversion to PSP.

b. Through maximized PSP conversion, "catch" patients before they set a foot at the pharmacy chain. Offer "best deal possible", clearly communicating that the lowest possible price is only available through the program. Sign-up patients and initiate PSP.

c. PSP includes direct delivery of prescribed medications, remote monitoring connected to the registered HCP, and automated analysis/reporting of lab test results. Delivery executed by company contractually obliged to avoid switch. Multi-channel remote monitoring including App, Website, WhatsApp, IoT devices, and phone calls. Consider that new technologies allow medical readings through video/audio captures. Lab studies possible directly at the patient's door (home/office). Eliminate all excuses (friction).

4. Generate Real-World Data:

a. IDHS is a closed-loop system that integrates all necessary stakeholders to actively manage the health of diagnosed patients enrolled to the PSP; as such, it contains all critical information within itself and is capable of interacting with the different stakeholders through diverse channels, exchanging only the necessary information at every step.

b. For patients, the system (IDHS) executes a predefined monitoring protocol that gathers specific data points from different sources, including the patient itself, to continually update the patient' profile and identify positive and negative trends, and act on them accordingly: congratulating the patient and providing advice related to concerns; updating and alerting the HCP in charge; and triggering tasks like phone calls, messages, and requests for medical appointments, medicine delivery, and lab tests.

c. For HCPs, the system (IDHS) offers different value propositions that range from EHR & eRx solutions linked to PSP; App & Web PSP platforms; and low-friction WhatsApp PSP integration; all of them designed to facilitate work for the HCP. The objective is to ensure that at least one of these tools aligns with the needs of the HCP and thus allows the PSP to integrate the HCP and create a closed-loop system where remote/automated monitoring is the engine.

d. For Innovative Pharma companies, this closed-loop system creates the perfect environment for real-world data gathering for both clinical data and commercial data. Changes and variables introduced to the system can be measured in terms of medical and commercial outcomes, which becomes a very powerful tool for these organizations. Full compliance with local and international regulations is ensured as data lives outside of the pharmaceutical company, which is able to access it though front-ends designed for this purpose, limiting and/or modifying data as needed.

So, now that the basic system' architecture is defined, how complicated is it to move to partial (pilot and MVP) and full implementation?

With an agile and flexible design, a pilot and MVP can be implemented within months as there are numerous tasks that do not require an automated system (IDHS) to be up and running; in fact, many tasks can be executed "manually" by the Remote Monitoring and PSP Manager (external provider) while assumptions are validated, project scope is confirmed, and approvals are gathered.

The next section explores proven options in terms of system' development, support technologies, and integration of providers/operators and their data.

*Section under development.

Section under development

System design and development.

Integrated Digital Health Systems (IDHS)