Is tech set to invade pharma?

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In recent months we are hearing more and more of traditionally tech companies staking out new ground in the land of big pharma.

Facebook CEO pledges $3bn

Mark Zuckerberg has said he wants to “cure, prevent or manage” all disease in one generation. This bold claim is backed by $3bn of capital, though it pales in comparison to the annual ~$150bn R&D budget that pharma companies spend every year in the search for new drugs. Can a tech approach make a difference here?

And the rest…

Last year, Google announced a $500m collaboration with drugs giant Sanofi, to investigate ways of improving diabetes management using analytics, electronics and software. Apple have been pushing their health app (compulsory on iPhones) since 2014. And Microsoft have partnered with Novartis, helping them to screen patients to work out whether their latest MS drugs are having an effect.

Rumours of Amazon interest

Amazon is strong in logistics. Using their distribution network, they could disrupt the supply chain of big pharma, currently outsourced to wholesalers, who take a cut of the revenues. Amazon could even threaten the future of Pharmacy Benefit Managers (PBMs).

Are tech firms a threat to pharma’s profits?

Not right now. Tech still has a long way to go before they can find solutions even to treating disease, let alone curing them. That said, they have put a first foot in the pharma door and we expect to see them attempt to get over the threshold in the coming years.

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