Disruptive Business Models in Healthcare Delivering Profitability by 2020

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Over the next 20 years, great strides in medicine, technology, devices and healthcare are anticipated. The following, highlights some of the leading trends and business opportunities associated with major advancements, disruptive innovations and integrations anticipated in these sectors:

Personalized Medicine and Healthcare: Disruptive innovators in health care aim to shape a new system that provides a continuum of care focused on each individual patient’s needs, instead of focusing on crises

Personalized medicine offers the potential for revolutionary change in the practice of medicine. It also provides a unique window into the

relationship between new medical technologies, new business models for health care delivery, and role of government in this unique marketplace. Using personalized medicine as a test of disruptive innovation in health care, innovators are seeking a different approach to these technologies in order for them to achieve their full potential.1

Developments in technologies, such as genomics, nutrigenomics, proteomics, bioinformatics, pharmacogenetics, pharmacogenomics, and other biological applications, are enabling the march toward the practice of personalized medicine. Rapid advancements are expected to continue in the area of personalized medicine, leading to more efficient and cost-effective products and therapies.

An analysis of the future for the treatment of diseases with pharmaceuticals, focusing specifically on the field of pharmacogenomics, which uses the human genome to develop treatments, is also underway. One of the major aims of pharmacogenomics is to use each individual's own genome to develop a personalized drug treatment, thereby removing the variations and adverse reactions that currently occur when drugs are prescribed. A host of non-invasive personal health technology for self care, mobile care, and home care research is currently underway. For example, an experimental product which aims to combine genetic data and mobile devices to give people just-in-time recommendations about what they should and shouldn't consume, is in the works. It's an interesting concept--nutrigenomics meets mobile computing. In brief, this product works as follows:

The PGA [Personal Genome Assistant--marketing speak for a smart phone] uses a device’s bar code reader to capture product ingredient information and respond with personalized screens of recommendation advice and ratings that display on a scale of -10 to +10, corresponding to analysis of integrated data from multiple sources. The PGA user can automatically and immediately identify the personalized prevention efficacy of any product under consideration, as long as the product has a bar code for ingredients. Consumers are equipped to make quick, yet thorough, product comparisons that take into consideration personal health preferences and genomic information with special attention to a disease, syndrome, or health condition they wish to improve.

Combinatorial Innovation - New Biomedical Designs:

1 “Personalized medicine and disruptive innovation: Implications for technology assessment”, Schulman, Kevin A. MD; Vidal, Ana Valverde MBA; Ackerly, D Clay MD, Genetics in Medicine, Aug. 2009

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The potential to combine Internet components, along software, protocols, languages, and capabilities in ways that create totally new innovations is also being leveraged in personalized medicine research and development communities. In the coming decade the reliance on experimental methods will increasingly be as a means of validating the results obtained from computational methods. This will be driven by the emerging importance of empirical and computational methods in the design of new products and molecular entities for biomedical applications, such as the development of novel sensors, optimize stem cell manufacturing systems and other processes. There appears to be strategic opportunities to exploit the efficiencies these technologies offer throughout the healthcare service settings; from theatre acute hospital to assisted living facilities to the home. These combinations, coupled with on-demand supercomputing, could potentially enable real-time decision support tools for doctors, real-time information delivery for individual patients, and a tailoring of information to meet personalized needs. Market Growth Indications: While the market for diagnostic tests and therapies that leverage personalized medicine and related technologies is growing, the biggest opportunities exist outside of the traditional healthcare sector. The U.S. personalized medicine market is estimated at about $232 billion and is projected to grow 11% annually, nearly doubling in size by 2015 to over $450 billion. The core diagnostic and therapeutic segment of the market—comprised primarily of pharmaceutical, medical device and diagnostics companies—is estimated at $24 billion, and is expected to grow by 10% annually, reaching $42 billion by 2015. The personalized medical care portion of the market—including telemedicine, health information technology, and disease management services offered by traditional health and technology companies—is estimated at $4-12 billion and could grow tenfold to over $100 billion by 2015. And the related nutrition and wellness market—including retail, complementary and alternative medicine offered by consumer products, food and beverage, leisure and retail companies—is estimated at $196 billion and projected to grow by 7% annually to over $290 billion by 2015.2

Biomarkers: Every disease leaves a signature of molecular "biomarkers" in our body — genes that turn on and off or proteins released into the bloodstream. Biomarkers measured in blood and other samples can tell us the state of our health and how we might respond to treatment. They are powerful tools that can detect certain diseases at their earliest stages before symptoms appear, when they are most treatable. Biomarkers can also

guide the physician to prescribe an effective drug that will be free of side effects. Biomarkers represent the future of medicine, in which disease diagnosis, treatment, monitoring and prevention will be guided by a continual readout of our molecular make-up.

2 “The New Science of Personalized Medicine”, PriceWaterHouseCoopers, 2009

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Convergence of Medical Device, Drugs, Molecular Medicine and Bioinformatics: Convergence is expected to be one of the leading trends going forward and is being made possible by enabling technologies, such as bioinformatics. Implications of such convergence of medical devices with molecular medicine include early and faster diagnosis, better prognosis, and tailored therapy with higher efficacy and diminished side effects. This is expected to further lead to developments in preventive and personalized medicine. Convergence will also be taking place across healthcare products and industry segments that are anticipated to transform the medical device industry. The convergence of devices with molecular medicine, data processing, and communication technology is allowing significant advances in many aspects of device technology.

Convergence/Advanced Applications of Nanotechnology in Medicine, Healthcare, Devices, and Cosmeceuticals: Perhaps the boldest application of nanotechnology lays in medicine, healthcare, and cosmeceuticals. Most sickness, injury and stress can be traced to cellular malfunction. Current medicine does not allow doctors to treat selective cells. Instead, today's medical solutions focus primarily on symptoms that sometimes provide negative side effects. Surgery saves lives, but it also causes trauma. Chemotherapy destroys cancer, but healthy cells

often die in the process; and far too often, the cancer returns.

Nanomedicine: Nanomedicine, the medical application of advanced nanotechnology also promises a bold future that will enable people to enjoy life without sickness, disease, and aging. By as early as mid-2020s, scientists hope to construct tiny nanorobots that can manipulate atoms inside cells. Injected into the blood, these clever ‘bots would repair tissues, clean arteries, attack cancer; even reverse the effects of aging.3 More than ten years ago, simple low-cost techniques improved the design and manufacture of nano-microchips. That unlocked a multitude of methodologies for their manufacture in a wide-range of applications including optical, biological, and electronic devices. The joint use of nanoelectronics, photolithography, and new biomaterials, has enabled the required manufacturing technology towards nanorobots for common medical applications, such as surgical instrumentation, diagnosis and drug delivery. Nanotechnology deals with structures smaller than one micrometer (less than 1/30th the width of a human hair), and involves developing materials or devices within that size. To put the size of a nanometer in perspective, it is 100,000 times smaller than the width of a human hair. In clinical trials, doctors have injected nanoparticles that seek out cancer cells and destroy them without harming normal cells. Although these particles cannot be programmed like nanorobots, they are a major reason for optimism at the National Cancer Institute, whose former director stated that all deaths from this dreaded disease will be preventable by 2015. Nanorobots work like tiny surgeons as they flow through damaged bodies making repairs. On command, they can erase wrinkles, eliminate excess fat, strengthen muscles and bone, restore hair, replace missing teeth, erase plaque

3 ‘Nanomedicine could end sickness, disease, and old age by mid-2020s, experts say” February 29 2008, Futuretalk

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buildup; even correct failing vision.4

Nanotechnology and Cosmetic/Skin Care Products: There are growing markets in nano-cosmetics, which are estimated to gross $27 trillion (domestic) by year 2010. All of the major cosmetics companies like L’Oreal, Estee Lauder, and Shisedio have nanoparticles already in many of their

products, which are already generating excitement for its potential use in anti-aging products. When properly engineered, nanomaterials may be able to topically deliver retinoids, antioxidants and drugs such as botulinum toxin or growth factors for rejuvenation of the skin in the future. Experts state that in anti-aging products, nanotechnology may allow active ingredients that would not normally penetrate the skin to be delivered to it. For example, vitamin C is an antioxidant that helps fight age-related skin damage which works best below the top layer of skin. In bulk form, vitamin C is not very stable and is difficult to penetrate the skin. However, in future formulations, nanotechnology may increase the stability of vitamin C and enhance its ability to penetrate the skin.

Nanorobotics-Future Medical Treatment at the Cellular Level: In the future, nanorobots may perform all kinds of important jobs for humans, including health-related jobs such as molecular repair. For example, many bacteria come equipped with flagella propellers which are powered by nanomotors. Nanorobotics may assist in functions related to sensing and detecting, communications, disease, aging, and genetics. Nanorobots

Initial uses of nanorobots to health care are likely to emerge within the next ten years with potentially broad biomedical applications. The ongoing developments of molecular-scale electronics, sensors and motors are expected to enable microscopic robots with dimensions comparable to bacteria. Recent developments on the field of biomolecular computing has demonstrated positively the feasibility of processing logic tasks by bio-computers, which is a promising first step to enable future nanoprocessors with increasingly complexity. Studies in the sense of building biosensors and nano-kinetic devices, which is required to enable nanorobots operation and locomotion, has been advanced recently too. Moreover, classical objections related to the real feasibility of nanotechnology, such as quantum mechanics, thermal motions and friction, has been considered and resolved and discussions about the manufacturing of nanodevises is growing up. Developing nanoscale robots presents difficult fabrication and control challenges. The control design and the development of complex integrated nanosystems with high performance can be well analyzed and addressed via simulation to help pave the way for future use of nanorobots in biomedical engineering problems.5

4 “Nanotech promises wealth, efficient healthcare’, Dick Pelletier, Jan., 2010, Futuretalk

5 Center for Automation in NanoBiotech, 2010

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Nanodevices:

Nanorobots are also nanodevices that will also be used for the purpose of maintaining and protecting the human body against pathogens. They will have a diameter of about 0.5 to 3 microns and will be constructed out of parts with dimensions in the range of 1 to 100 nanometers. Such devices have been designed in recent years but no working model has been built so far.

Nanorobots

The powering of the nanorobots can be done by metabolizing local glucose and oxygen for energy. In a clinical environment, another option would be externally supplied acoustic energy. Other sources of energy within the body can also be used to supply the necessary energy for the devices. They will have simple onboard computers capable of performing around 1000 or fewer computations per second. This is because their computing needs are simple. Communication with the device can be achieved by broadcast-type acoustic signaling.

A navigational network may be installed in the body, with station keeping navigational elements providing high positional accuracy to all passing nanorobots that interrogate them, wanting to know their location. This will enable the physician to keep track of the various devices in the body. These nanorobots will be able to distinguish between different cell types by checking their surface antigens (they are different for each type of cell). This is accomplished by the use of chemotactic sensors keyed to the specific antigens on the target cells. When the task of the nanorobots is completed, they can be retrieved by allowing them to exfuse themselves via the usual human excretory channels. They can also be removed by active scavenger systems.

Some possible applications using nanorobots are as follows:

--To cure skin diseases, a cream containing nanorobots may be used. It could remove the right amount of dead skin, remove excess oils, add missing oils, apply the right amounts of natural moisturizing compounds, and even achieve the elusive goal of 'deep pore cleaning' by actually reaching down into pores and cleaning them out. The cream could be a smart material with smooth-on, peel-off convenience.

--A mouthwash full of smart nanomachines could identify and destroy pathogenic bacteria while allowing the harmless flora of the mouth to flourish in a healthy ecosystem. Further, the devices would identify particles of food, plaque, or tartar, and lift them from teeth to be rinsed away. Being suspended in liquid and able to swim about, devices would be able to reach surfaces beyond reach of toothbrush bristles or the fibers of floss. As short-lifetime medical nanodevices, they could be built to last only a few minutes in the body before falling apart into materials of the sort found in foods (such as fiber).

--Medical nanodevices could augment the immune system by finding and disabling unwanted bacteria and viruses. When an invader is identified, it can be punctured, letting its contents spill out and ending its effectiveness. If the contents were known to be hazardous by themselves, then the immune machine could hold on to it long enough to dismantle it more completely.

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--Devices working in the bloodstream could nibble away at arteriosclerotic deposits, widening the affected blood vessels. Cell herding devices could restore artery walls and artery linings to health, by ensuring that the right cells and supporting structures are in the right places. This would prevent most heart attacks.6

M-Health: In the future Mobile Health (M-Health) applications will take advantage of technological advances such as nanotechnology, device miniaturizations, device convergence, high-speed mobile networks, and advanced medical sensors. This will lead to the increased diffusion of clinical M-Health

systems and services which will have a powerful impact on the health care sector (Health monitoring is repeatedly mentioned as one of the main application areas for Pervasive computing. Mobile Health Care is the integration of mobile computing and health monitoring. It is the application of mobile computing technologies for improving communication among patients, physicians, and other health care workers. As mobile devices have become an inseparable part of our life it can integrate health care more seamlessly to our everyday life. It enables the delivery of accurate medical information anytime anywhere by means of mobile devices. Recent technological advances in sensors, low-power integrated circuits, and wireless communications have enabled the design of low-cost, miniature, lightweight and intelligent bio-sensor nodes. These nodes, capable of sensing, processing, and communicating one or more vital signs, can be seamlessly integrated into wireless personal or body area networks for mobile health monitoring. In this paper we present Intelligent Mobile Health Monitoring System (IMHMS), which can provide medical feedback to the patients through mobile devices based on the biomedical and environmental data collected by deployed sensors.7

As more smart health solutions and medical devices compete for clinician and consumer adoption, questions about measurable benefits for health are coming to the fore. Widespread adoption of the iPhone and other smart phones by physicians may well lead to a new acceptance of devices and applications that across the industry. Mobile application developers report that several mobile applications are now used by more than 900,000 physicians globally and a recent survey of about 350 clinicians found 60 percent are interested in the iPad and 20 percent intend to buy one immediately. Transforming the role of patients and empowering them to manage their own conditions are being spearheaded by new products and tools to help patients prevent and control chronic diseases. Analysts have estimated that by 2020, that one of every 5 dollars of the GDP will go to healthcare, and 75 percent of those costs are from chronic diseases.

6 NanoRobots; ShortCircuit; Newsletter of IEEE Bombay Section; 1999

7 Intelligent Mobile Health Monitoring System (IMHMS) - Lecture Notes of the Institute for Computer Sciences, Social Informatics and Telecommunications Engineering; Department of Computer Science and Engineering, Bangladesh University of Engineering and Technology; Rifat Shahriyar, Md. Faizul Bari, Gourab Kundu, Sheikh Iqbal Ahamed, and Md. Mostofa Akbar; 2010

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The intersection of three important technologies –biosensors, data aggregation and social networking—gives patients access to information and control over their healthcare. Examples include a number of new products and applications that leverage the technologies and lead to the “observer effect” where merely being watched leads to behavior modification, such as:

A prototype patch that offers real time data about the wearer's caloric intake--and the number of calories burned in the past 24 hours--such a potentially disruptive technology. The patch is still being developed and works as follows: It consists of a single chip surrounded by numerous sensors, electrodes, and accelerometers, embedded in a foam adhesive patch. The system, which is designed to be replaced once a week, measures a variety of things (temperature, heart rate, respiratory rate, skin conductivity, possibly even the amount of fluid in the body), then throws the data into an algorithm to calculate the number of calories consumed, the number burned, and the net yield. Caloric-intake measurements are accurate only to about 500 calories. The patch sends this data via a Bluetooth wireless connection to a dieter's cell phone, where an application tracks the totals and provides support. "You missed your goal for today, but you can make it up tomorrow by taking a 15-minute walk or having a salad for dinner," it might suggest. Both the concept--the ability to track calories consumed and burned with relative accuracy, assuming it pans out--as well as the integration with mobile technology point to how significant this sort of device could be in motivating behavior change. It has the potential to be much more accurate in determining net gain or loss and is most useful for measuring trends over the course of a week or a month.