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A Year in Review and a Look Forward in Connected Health

By Andrea Jackson, Director of Program Development, WLSA

2014 will be remembered as the year that Digital and Connected Health became mainstream, seeing record levels of investment and notable acquisitions, along with a large number of FDA clearances.  Dollar investment in early stage digital and connected health companies more than doubled over 2013.

According to StartUp Health’s year-end report, $6.5 billion was invested in Connected Health companies in 2014, compared with $2.9 billion in 2013.  A similar report from Rock Health, which  includes U.S. deals over $2 million, put the number at $4.1 billion in 2014, compared with $1.8 billion in 2013.  Qualcomm Ventures and Khosla Ventures were most active by the number of investments, closing 12 and 10 deals respectively, closely followed by KPCB and Merck.  Unlike the very early years in this sector, dozens of additional investors are also active.  According to Rock Health, M&A also increased in 2014, with 95 deals disclosed over the course of the year at a total valuation of $20 billion.

By Rock Health’s tally, nearly half of all funding went to six categories – analytics and big data, healthcare consumer engagement, digital medical devices, telemedicine, personalized medicine, and population health management.  WLSA has long advocated for the development of solutions that engage consumers and allow them to better manage their own health and health care, so we’re excited to see so much investment in this category.   WLSA’s point of view is that the future belongs to health care incumbents and newcomers who create:

  • Medical grade platforms,
  • Using state of the art knowledge and analytics,
  • Distributed in consumer friendly business models, and
  • Transparently reporting real world outcomes.

We are happy to see so many notable FDA clearances for connected health apps and devices in 2014 despite continued confusion and controversy over some regulatory matters.  Solutions such as Dexcom’s SHARE cradle and AliveCor’s atrial fibrillation detection algorithm are indicative of the huge leaps in innovation that the industry has seen in the past few years.  2015 will be a hyperactive year on the FDA front as alternative Congressional efforts to change the agency’s authority are considered.  FDA is expected to issue formal guidance on several topics that are critical to digital and connected health, including clinical decision support systems and the dividing line between (regulated) medical devices and (unregulated) wellness apps. WLSA’s proposal for an improved approach to the regulation of the field is linked here.

In 2015, we expect that increased activity from consumer technology companies like Apple, Google, and Samsung will drive further innovation in consumer health engagement.  We also expect to see more activity from biotech and pharma, now that major players like Sanofi have shown their commitment to connected health solutions.

We hope that you will join us at the 10th Annual Convergence Summit, where speakers such as Glenn Steele, Eric Topol, Brian Otis, and Daniel Kraft will reflect on recent advances and share their visions for the future of connected Health.