A view from the desk: Global innovation in healthcare
“In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.”
Whilst the US-based German Economist Dornbusch was referring to economics, he could very well have been talking about investment. Indeed, you could probably substitute “economics” and replace it with the word “life” too.
Set against the backdrop of the Coronavirus pandemic, one of the most intriguing developments in the world of investments over the first half of 2020 has been the rise of what have come to be called the “megatrends”. Although a discussion of global change and megatrends can be traced back to the 1970s and 1980s, the pace of these changes is accelerating. The global impact of the pandemic has served as another accelerant, a catalyst for, perhaps, more rapid upheaval than could have been envisaged just 100 days ago. And as Dornbusch suggested these changes seem to be taking place far "faster" than anyone "thought they could".
"Megatrends" can be distilled down to four broad categories: -
Environmental challenges
Technological transformation
Globalisation and shifting geo-politics
Society & demographics
From a purely investment perspective issues concerning the environment, technology, globalisation and demographics can all be seen to impact upon the long-term macro-economic trends, and, consequently, if we can invest correctly in these themes through the cycle then we can expect to create positive outcomes.
It is not simply a case that each of these trends remain distinct and run parallel to each other. They are not independent and, instead, they form a sort of Venn diagram, interlocking and overlapping, and technological transformation sits at centre of this as an enabler. The ability to utilise the power of new technology is changing the way we live our lives.
At the most basic level, we can use an App on our smartphone to order and pay for hot food delivered to our door without the need to speak to anyone. Indeed, in the current environment this can all be done without any interaction at all as the food will be left on our doorstep! However, technology is, of course, far more significant than that as it brings a genuine hope that solutions can be found to dealing with the pandemic more rapidly than ever possible before now. And it is the world of healthcare and the rise of biotechnology that I want to focus on.
Please be reassured this will not be a piece heavy on the science. The only academic examination I have failed (which is perhaps surprising given my appalling handwriting) was my O Level Physics paper.....my brain is not wired to work in a scientific way. However, what it can understand, is the potential progress and pace of change technology is bringing, and will bring, to the world of healthcare, and this is likely to be one of the most positive legacies of the pandemic once we get to the other side. We are at the intersection of two of the longest megatrends in history as humans continue to innovate and are living for longer. Opportunities are arising as Coronavirus accelerates many of the developments within the world of healthcare that had already been taking place. Medical innovation is flourishing.
I consider myself quite fortunate that if I need to see my GP I can usually get an appointment within a few days, even if it is not with “my” doctor. An emergency will see me squeezed in more rapidly. However, I appreciate this is not the experience of most people who suffer the frustration of long delays when seeking appointments. However, the global rise of “tele-medicine” in just a few short months already indicates a positive direction of travel here.
The adoption of a new technology is rarely linear; it is usually slow at first, then accelerates until it reaches saturation. Video-conferencing (and the ubiquitous “Zoom”) is having its moment of acceleration and the advent of video calls during the COVID crisis will have a lasting impact on health care. Patients are discovering that treatment for a wide range of specialties, like diabetes, may be easily monitored via a tele-medicine visit and are happy with how this new medium is working for them. US research at the end of April tells its own story – 93% of patients who had used tele-medicine for the first time said that they were likely to use it again and 66% said that they would actually prefer it to a face to face visit in the future. Physicians are also happy because their patients are happy, and it keeps their practices vibrant.
Healthcare innovation is thriving. A whole eco-system around tele-medicine is developing including life sciences and personalised medicine. Diagnostic testing infrastructure is like the back-end robotics for the healthcare system. The leading companies are working on miniaturising the technology to bring the developments closer to the patient and away from laboratories. At the same time, ‘Big Data’ and Artificial Intelligence are being utilised to spot and stop pathogens developing, and hopefully, quicken the pace by which a coronavirus vaccine (or more likely vaccines) can be tested and distributed.
In his excellent book “How Innovation Works”, Matt Ridley highlights how little transformation we have actually seen in the world of medicine. If this coronavirus pandemic had occurred 20 years ago some things would have been very different. That was before the iPhone, Skype, Facebook, Twitter, YouTube, Netflix, Bluetooth, Kindle and Zoom. Google was not yet a public company, Amazon a struggling dotcom. “Other things” he writes “would have been much the same. The development of vaccines almost as difficult, slow and uncertain today as it was then. Antiviral pills barely existed then and barely exist today. We are largely defenceless against a lethal virus”.
He continues “Imagine how much better off we would be if biology and medicine had seen the same advances in recent years as computing and communication?”. There have, of course, been great scientific advancements in the past 20 years. We can, for example, read the entire genome of the coronavirus. However, discoveries and inventions have not delivered innovation – that is to say, “make something available, reliable and affordable enough to change our lives”.
Not yet anyway. Biotech could be about to have its long-awaited acceleration. Political will and policy reforms will be needed help make this happen. Ridley continues “the triumphant advance of computing and communication in recent decades was not an accident. It happened partly because of a series of policy decisions, the effect of which was to make innovation in digital ‘bits’ almost permission less, while innovation in physical ‘atoms’ remained wrapped in red tape”. Was it this lack of regulation that perhaps diverted innovators away from developing new drugs or devices and into the world of developing new apps?
In the US political support is much more likely than ever before. The 21st Century Cures Act was one of the last pieces of legislation signed into law by the outgoing President Obama in December 2016 and is designed to help accelerate medical product development and bring new innovations and advances to patients who need them faster and more efficiently. Closer to home, speaking on the day he became prime minster last year, Boris Johnson spoke specifically of biotechnology: “It is here in Britain that we are using gene therapy, for the first time, to treat the most common form of blindness.....let’s start to liberate the UK’s extraordinary bioscience sector from anti-genetic modification rules”.
“If we are investing for today and tomorrow, and not the past, then this is innovation we need to embrace.”