The 3 trends that will shape the health industry in 2015
At the start of 2014, the Market Intelligence team looked ahead and identified three hot trends (wearables, Obamacare and next-generation sequencing) that would have a significant impact on the life sciences and health sector for the year. With 2014 in the rearview mirror, how did our health predictions turn out and where is 2015 headed?
2014 predictions: How did we do?
In the health information technology sector, wearables dominated the headlines in 2014. MaRS covered the trend, including far-reaching implications on Canadian innovation, the quantified patient and ingestible smart pills. During the summer of last year, Google Glass became available to the public as an open beta, which helped propel the conversation and hype around wearables. Unfortunately for Google, the Glass was a dud. It failed to attract mainstream consumers, predominantly due to its expensive price tag, its short battery life and the social awkwardness of wearing a computer on your face.
Regardless of Google Glass’ failure, the industry as a whole grew rapidly. IDC estimated that 21 million units of wearables were shipped worldwide in 2014. This is a 240% increase from 2013, when only 6.2 million units were shipped.
In 2014, wearables in the health vertical were heavily focused on the fitness and lifestyle market and very few devices had truly medical focuses. In order for this vertical to continue to grow and to maintain customer engagement, wearable devices must be able to contextualize the data they gather and provide meaningful feedback that can be applied in a defined manner. Simply providing data without context will result in a decrease in customer engagement and an eventual decline in usage. In 2015, look out for devices that provide more clinically meaningful metrics and claims that are supported by a robust set of evidence.
Analysis by PwC’s Health Research Institute predicted that the Affordable Care Act (ACA or “Obamacare”) would result in a net loss of $140 billion over the next decade for branded pharmaceuticals. However, low enrollment in 2014 resulted in effects that were neither definitively positive nor definitively negative.
In 2015, enrollment is expected to spike as the February 15 deadline approaches. After this deadline, those without healthcare plans will be subjected to escalating financial penalties. It will be interesting to see how enrollment in 2015 and the following years will affect pharmaceutical companies and other major players in the health ecosystem.
An unexpected benefit has arisen from the ACA. In addition to making healthcare more affordable and accessible to Americans, Obamacare may have also enabled an entrepreneurship boom. The underlying theory is that many Americans who wished to start their own companies were unable to because they were reliant on their “day jobs” for employer-sponsored family health insurance. Obamacare grants individuals access to the same benefits, while allowing entrepreneurs to venture out on their own. Additionally, startups have a greater ability to attract talent because the ACA has enabled them to offer benefits that are competitive with those of larger corporations.
The next-generation sequencing (NGS) market has grown rapidly over the last few years due to the emergence of fast, inexpensive and accurate sequencing technology. A recent report by MarketsandMarkets estimated that the global NGS market would be worth $2.5 billion by the end of 2014.
Market leader Illumina, which currently occupies 74% of the market, predicted that approximately 228,000 human genomes would be sequenced in 2014. The company also created news last year when it announced that its HiSeq X Ten System would be capable of delivering 18,000 human genomes per year at the price of $1,000 per genome. The $1,000 price tag has been a coveted goal among manufacturers in the industry.
Currently, the majority of genomic sequencing is for research purposes. However, 2015 might be the year that DNA sequencing enters the clinic, as Illumina and other manufacturers announced last year that they are pivoting to this market segment. The introduction of DNA sequencing in clinical practice will dramatically change the way that physicians diagnose and treat diseases.
2015 predictions: Where are we headed?
From the new technologies and trends that emerged in 2014, it is increasingly evident that the life sciences and health sector is undergoing a massive transformation. This means that 2015 is bound to be an exciting year full of incredible advancements for the sector. In the following section, we list some of the trends and technologies that we believe will shape and define the sector this year.
Genome editing: CRISPR
In 2014, a team of scientists was able to create genetically modified monkeys using a new method of DNA engineering called CRISPR/Cas9. This was the first time that this form of precision gene editing was accomplished in a primate. Genetic engineering has been around for decades, but not to this level of precision and accuracy. The CRISPR/Cas9 technique for gene editing created enormous excitement last year, as many researchers in the field believed that it would revolutionize the way we study and find cures for complex diseases.
Last year, scientists were able to utilize this technique in mice to get rid of muscular dystrophy, cure a rare form of liver disease and make human cells immune to HIV. The discovery of this technique has spurred the creation of many startups that are currently in a fierce patent battle.
There is currently no drug developed using this technique; however, that might change in the coming years. In 2015, expect more advances related to the CRISPR/Cas9 gene editing technique and potential cures for complex genetic diseases.
Refocusing efforts on infectious diseases
Last year’s news included extensive coverage of the Ebola outbreak in West Africa, including how companies such as Chematria and PlantForm are offering new and innovative ways to help in the fight against outbreaks. Closer to home, we saw enterovirus, measles and mumps outbreaks that took the public by surprise. These recent incidents have raised the alarm and drawn attention to what could become the world’s biggest crisis.
In 2015, we expect to see renewed efforts in the area of infectious diseases. These efforts will likely be seen in a breadth of areas, including prevention (new vaccines and vaccination policies), treatment (novel antibiotics) and preparedness (BlueDot’s big data analytics to predict the global spread of disease).
The diseases targeted vary by region, but are often those at top of mind. In West Africa, preventing the transmission of Ebola remains a top priority. The Canadian Center for Vaccinology has human trials underway to determine the effectiveness of its Ebola vaccine. It is hoped that, by mid-2015, thousands of doses will be available in the affected regions.
In North America, measles are a renewed target. In 2014, the United States saw its highest number of cases (over 288) since elimination. These cases usually originated from unvaccinated US travellers returning from abroad who went on to infect other unvaccinated members of their communities. Given the vaccination programs, which have been underway for years, this uptick in cases highlights the need to allay American and Canadian parents’ fears about the measles, mumps and rubella vaccine.
With the emergence of wearables, medical apps and genetic testing services, patients in 2015 will be more empowered than ever before to take full control of their health.
Individuals will have more access to their health data and will be more knowledgeable about their well-being. We’ve started seeing it in 2014 and we will continue seeing it in 2015: healthcare will expand from the confinement of hospitals and doctors’ offices into the community and home. Individuals will be able to access care in non-traditional settings and provide self-care, which will further empower them.
So it’s not surprising that patient empowerment is also the theme of HealthKick 2015, Canada’s largest health venture showcase in May. Speakers at the forum will explore how innovative technologies are empowering patients to become the “CEO of their own health.”
With healthcare and health data more accessible to individuals, the hope is that people will start to live healthier lives and work toward preventing and/or delaying the onset of chronic diseases.
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Emily MacIntosh is a market research analyst with MaRS Market Intelligence, helping startups and entrepreneurs in the life sciences and healthcare and cleantech sectors. See more…
Nirusan is a life sciences and healthcare analyst with the MaRS Market Intelligence. He provides market insight services to entrepreneurs and the technology transfer community in Ontario. See more…