Building a business model in digital medicine

Journal name:
Nature Biotechnology
Year published:
Published online

Digital medicine companies can incorporate and build on existing business models in tech and biomedicine to bring transformational new products to market and eventually reshape medicine.

At a glance


  1. Percentage of total expenditures in 2014 spent on R&D and S,G&A for companies (with a market capitalization >[dollar]50 million and <[dollar]1 billion) that went public from January 1 to July 31, 2015 for biotech, device and tech.
    Figure 1: Percentage of total expenditures in 2014 spent on R&D and S,G&A for companies (with a market capitalization >$50 million and <$1 billion) that went public from January 1 to July 31, 2015 for biotech, device and tech.

    S,G&A, sales, general and administration.

  2. Building blocks of digital medicine business model.
    Figure 2: Building blocks of digital medicine business model.

    (a) Any company entering this space will have to consider, at a minimum, the product, technology, user/customer, data type, delivery, validation and economic model, and how these factors all fit together and complement one another to support a cohesive strategy. Each column is displayed in order of most 'medical' to most 'digital' (see color coded key at top of figure). (b) 23andMe is a personal genomics company whose stated goal is to help people access and understand their genome. It markets an at-home genetic test kit directly to self-quantifiers and provides an online interface through which users can view and interpret their results. The company is currently seeking FDA authorization for its tests and was recently authorized to market a test for Bloom syndrome. The power of the 23andMe business model comes from the value of aggregated data. In addition to the fee-for-service model, 23andMe has also entered into multimillion dollar deals with biopharma companies interested in accessing the aggregated data of their customers (database). (c) offers algorithms that decode mobile phone data (usage, communication and location patterns) to infer information about patient health risk. It markets mainly to providers but also to patients with chronic conditions. Providers receive reports that help them stratify patient risk and provide an opportunity to intervene earlier, improving outcomes and lowering costs. Although its business model is likely still evolving, the company is testing the product in hospitals through healthcare providers Kaiser Permanente and Novant Health network. (d) The Sync Project (Boston) is a company with the stated goal of harnessing the scientific potential of music for health. Sync hopes to isolate clinically validated musical signatures from physiological data gathered while patients wearing biometric sensors listen to music. The company's current model is based on the potential to collect massive amounts of data on a global scale.

  3. Cost/quality trade-off in clinical data collection.
    Figure 3: Cost/quality trade-off in clinical data collection.

    Traditionally, high-quality clinical data has been extremely expensive to collect. Digital health data are much cheaper but also unvalidated and unreliable. As sensor quality, data validation and analytical techniques improve, digital medicine data will improve with it, allowing the broad collection of high-quality, low-cost data.

  4. Digital medicine models strike a path between tech and medical (drug and device) businesses.
    Figure 4: Digital medicine models strike a path between tech and medical (drug and device) businesses.

    It will be difficult to succeed in digital medicine on either a traditional tech path alone (not enough validation) or a traditional drug/device path alone (too long and expensive). Successful digital medicine efforts will likely leverage the advantages of both models to do cheap, rapid prototyping, fairly in-depth clinical validation but with cheaper data collection and monitoring, and rely on that validation to gain advantages in regulation and reimbursement.


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Author information


  1. David Steinberg, Geoffrey Horwitz and Daphne Zohar are at PureTech, Boston, Massachusetts, USA.

Competing financial interests

D.S., G.H & D.Z. have interests in Akili and the Sync Project.

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