Tech Giants in the Healthcare industry
The principal value of the healthcare industry lies in products and services, be it drugs, vaccines, or medical devices. These products all have a so-called “lifecycle” during which the product undergoes many changes. The lifecycle of a classical pharmaceutical product goes through three stages: R&D, manufacturing, and distribution.
A great example of GAFAM involvement in healthcare R&D is the relatively new pharmaceutical companies Calico and Verily Life Sciences, sister companies of Google under the same mother Alphabet. Calico, together with AbbVie, runs an R&D facility that focuses on the treatment of age-related diseases, a promising field of research. Verily Life Sciences has partnered with many key pharmaceutical players (e.g., Johnson & Johnson, Sanofi, GSK) to develop innovative healthcare technologies, such as surgical robots, bioelectronic medicines and glucose monitors. In the case of manufacturing, Microsoft leads the Augmented Reality (AR) revolution with their HoloLens. HoloLens is a headset with integrated smart glasses that allows the user to interact with control systems and visualise manufacturing steps by a hand wave. This enables operators to train, perform routine checks, and troubleshoot on machinery without physically interacting with them. This will decrease the number of in-process events and the amount of downtime for the impacted machinery, which is desperately needed in the highly complex field of pharmaceutical manufacturing.
Lastly, pharmaceutical distribution has been impacted chiefly by Amazon. Amazon's already existing distribution network combined with the acquisition of the mail-order pharmacy PillPack has led to an, almost overnight, leadership position for the company's new spin-off: Amazon Pharmacy. Amazon Pharmacy is already being chosen by many retail pharmacies and customers as a better alternative to classical pharmaceutical supply chain management due to its higher level of customer service, discounted drug prices, and home delivery service. Moreover, Amazon aims to centralise all different products onto one easy-to-use platform, further increasing their level of customer service. It is expected that Amazon will soon offer a vastly improved customer experience when compared to classical healthcare companies, increasing their market share in the process.
Latest moves by the tech giants in healthcare
Conclusion | HealthCare & Tech Giants: Collaboration or Fight?
Today’s Tech Giants have ambitious plans to earn their share of the cake in the healthcare industry. They have already made their way into every facet of the healthcare industry and show great innovative potential and industry insight. If the current leaders of the pharmaceutical and healthcare industries wish to keep their positions at the top of their field, they must learn from the Tech Giants to remain competitively viable across the lifecycles of their products. Those that choose to stick to the old ways of doing business and not embrace the power of patient data-driven healthcare through digital solutions and devices will surely struggle to eat their Tech Giants. Those who learn to adapt and collaborate will most likely remain important players in the health industry. The leading question healthcare companies need to ask themselves should, therefore, not be if they want to work with GAFAM, but how they will work with GAFAM.