Table of Contents

Executive Summary

Executive Summary

Digital solutions are top of mind for biopharma companies in 2022, and Software as a Medical Device (SaMD) is a crucial cornerstone for top-tier companies. Here’s why: SaMD is changing how patients and providers interact, and it’s streamlining the way data is shared, tracked and analyzed. This has huge implications for biopharma companies, whose success depends on pairing the right patients with the right treatments and making a compelling case for reimbursement with payers.

In partnership with HealthXL, a digital health community and advisory company, we surveyed the pharma industry about SaMD, interviewed top digital health leaders and analyzed publicly available data for the top 30 firms over a nearly three-year period.

These digital innovators—many of whom have successfully brought SaMD to market—provided candid insights on the costs and timelines associated with building, scaling and maintaining regulated digital health products. The realities that they outlined were very different from the expectations of digital leaders who haven’t yet launched a SaMD project.

And while the initial investments in SaMD can be large—and exceed both cost and time estimates—there’s an opportunity to make a big return if your solution resonates with patients and providers.

Looking to the future, the pill will no longer be sufficient. We will need to be able to understand the value to see improved outcomes."

Biopharma executive insight

The State of the SaMD Market

Our market analysis revealed that the top five pharmaceutical companies invested a combined $270 million in SaMD initiatives between January 2019 and October 2021. And most pharma companies rely on strategic partnerships to bring their SaMD solutions to market—among the companies we analyzed, 73% of deals were with strategic partners.

While the potential applications for SaMD are myriad, our survey respondents overwhelmingly said that disease management was the most promising use case, followed by patient adherence and patient diagnosis.

White paper Sa MD most promising use cases in Sa MD resource version v24

Our market analysis found that the most active therapeutic area across SaMD is undoubtedly metabolic diseases, which makes up close to 30% of engagements. The second-most common was oncology, followed by respiratory.

Regulated digital solutions for metabolic, respiratory and cardiovascular diseases have largely been focused on disease management, to help patients manage the daily ups and downs of chronic conditions. 

Meanwhile, the oncology and autoimmune fields have seen an avalanche of new and promising treatments in recent years. As a result, there’s a big opportunity for solutions that aid patient selection and help providers match individuals with the right treatments. Of course, these are just a few of many possible use cases across therapeutic areas.

Disease management holds the most promise given the holistic opportunity it provides: Allowing patients to see how they are doing with their disease. But diagnostics and monitoring are also big opportunities in this space."

Biopharma executive insight

White paper Sa MD most active therapeutic areas v24

Drilling down further, the most common indications within SaMD were diabetes, asthma, cancers and heart failure. Together, these four indications make up almost half of the diseases on which pharma companies are focusing their digital health initiatives.

White paper Sa MD top 10 indications for Sa MD v24

Oncology and hematology have big applications, as do autoimmune conditions, such as arthritis, and metabolic diseases like diabetes. Rare diseases also have potential, and we’re seeing progress here due to the competitive nature of these products.

Biopharma executive insight

Expectation vs. Reality: Cost and Time to Bring SaMD to Market

While our market analysis shows significant activity in SaMD across multiple use cases, therapeutic areas and indications, this data only shows the focus—not the significant time and investment required to successfully launch even a single SaMD solution.

We surveyed a range of global pharma companies, splitting up respondents into those who have experience bringing SaMD to market and those who have not yet brought SaMD to market.

What we found was that the expectation of what it would take to successfully launch a SaMD product was different from the reality in two important ways: cost and time.

When comparing the expectations of those who have not brought SaMD to market with the real-life experience of those who have, it’s clear that firms are dramatically underestimating the cost. And our interviews with digital health leaders confirmed this observation: 100% of pharma executives agreed that SaMD initiatives take longer and cost more than originally believed. They reported that the average cost to bring a SaMD project to market was five times more than expected.

Among those who have brought SaMD to market, 71.4% misestimated the cost of bringing a digital solution to market.

Among those who have not yet brought SaMD to market, nearly half of respondents (47.4%) had an estimated cost range of less than $1 million, and 68.5% predicted it would cost less than $5 million.

But among those that have brought SaMD to market, 57% reported the cost at $5 million or more, and 93% reported that the cost range was $1 million or more.

Our panel of digital health leaders reported an average time to market for SaMD of about three years, three times their original estimates. More than half (55%) of the digital health leaders we interviewed expected it to take just one to two years to develop their SaMD projects. But in reality it took three years or more for 66% of them.

White paper Sa MD cost expectations for Sa MD v24

It’s important to account for post-launch costs in a 3- to 5-year budget. The ongoing maintenance, feature upgrades, security testing, hosting and technical support are just a few areas to consider. For the first solution with a brand new platform, the yearly post-launch costs are generally similar to the development costs. The economy of scale for hosting multiple SaMD provides significant savings by utilizing the same platform for hosting, technical support team, etc."

Biopharma executive insight

White paper Sa MD expected cost of Sa MD v24
White paper Sa MD cost to bring Sa MD to market v24

Solving Cost and Time to Market Challenges

Leaders at biopharma companies see huge opportunities in SaMD, especially in disease management, patient adherence and patient diagnosis. But how do you control costs and expedite time to market?

  1. Don’t attempt to build from scratch: It’s complex and time consuming to build the underlying infrastructure in house. Instead, find a partner with expertise in SaMD and a platform that’s prebuilt.
  2. …but make sure the platform is configurable and customizable: Find a partner who’s willing and able to implement the customizations your use case requires.
  3. Develop with end users in mind: Don’t build SaMD for SaMD’s sake. Your ultimate success and scalability hinge on adoption from patients and providers.
  1. Prioritize expertise in regulatory requirements and compliance: This is especially important if you plan to launch in multiple geographies, either concurrently or over time. Don’t try to convert an unregulated product into a regulated SaMD solution. Instead, work with a platform partner who can ensure compliance from the start.
  2. Think about the big picture: Biopharma companies aren’t stopping at one SaMD offering. As you start launching, set up your platform and procedures in a way that allows you to scale—across both geographies and use cases.

External partners—like BrightInsight—can save about two thirds of the cost per SaMD solution."

Biopharma executive insight

A trusted partner and proven platform you can count on

Based in Silicon Valley with teams all over the globe, BrightInsight is backed by leading healthcare and technology VCs. Our leadership team brings over 100 years of combined digital health experience in the biopharma and medtech industries.

Our vision is to transform patient outcomes globally by bringing the power of digital technology to healthcare, and we work every day to achieve this by accelerating regulated digital health innovation for our customers through our scalable medical-grade platform.

We are the launch partner and underlying platform for the world’s leading biopharma companies. Our clients trust BrightInsight to accelerate time to market for their regulated digital health products, including apps, algorithms, medical devices, connected combination products, companion diagnostics and SaMD.

This research was conducted in partnership with HealthXL, a global company specializing exclusively in digital health. Through unique real world learnings from the HealthXL community, combined with expert insights from their advisory team, HealthXL supports clients to radically innovate and transform healthcare through technology.

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