There appears to be a new Gold Rush in healthcare IT to leverage (sell) patient data to Life Science companies:
- Cerner is coming to market with its Learning Health Network (LHN);
- Fourteen health systems are coming together to launch Truveta;
- Allscripts has been at it for a few years with Veradigm;
- Health Catalyst is jumping in with Touchstone;
- Numerous payers, including Anthem and UHG;
- Best of breeds like stalwart IQVIA and relative newcomer TriNetX…
…and I’m sure many others are in the wings.
While the selling of patient data, predominantly claims and Rx data, has been going on for years (Anthem, IQVIA, Optum and others), this latest boom is being driven by the confluence of two factors. First, the FDA has provided recent guidance on use of Real World Data (RWD) and Real World Evidence (RWE) in regulatory submissions for drug development, which has the promise of lowering development costs and accelerating time to market for new therapeutics. Secondly, the ubiquitous use of EHRs has created approximately a decade’s worth of discrete clinical data that has far greater fidelity than claims data – the predominant data source in the past.
Quick Look at Past, Fast Forward to Present
Selling health data to third parties such as life sciences has been going on for years, if not decades. Data has always been de-identified with filters put in place to insure that in smaller communities, a patient is not easily identified but rarely if ever has a citizen been informed that their health data is being sold.
Cerner has been selling de-identified data since 1999 when it offered Health Facts (data on a hard drive sent to purchaser). Anthem and UHG/Optum have probably done something similar for at least as long, if not longer – but only claims data (including meds and maybe lab data). Then there is the market gorilla, IQVIA who’s reach is global and offering extensive. This data was bought from providers and payers and sold directly to life science companies. The data, particularly clinical, was a mess and extremely costly for life science companies to clean and make use of.
Then there was a start-up, Flatiron Health that figured out there was a potential gold mine if one could get clinical data (in their case, oncology data specifically), clean it and normalize it for clinical research and drug development. Flatiron acquired a specialty oncology EHR, renegotiated its rights to the clinical data with customers and created a rich repository of clinical data. This asset was deemed so valuable that Roche paid a whooping $2.1B in total for Flatiron. This caught everyone’s attention.
Unlike the offerings in the past that bought data from originators and sold it, today’s prevailing business model is shifting. It is fully cloud-based, and rather than selling the data, health systems give access to the data in return for their data to be cleansed, normalized and curated for internal research purposes. Some RWE/RWD vendors are even offering sophisticated data analytics tools to providers to assist them in analyzing their data and granting access to the complete repository of data. Lastly, providers may also have the opportunity to participate in clinical trials, an additional source of revenue.
At this time it is difficult to put a hard number to just how big this market opportunity is. In my research to date the market size numbers are all over the map from as little as $1.3B by 2022 to as high as some $40B by 2025. Obviously, I am going to need to do some more research here but there is at least one recent data point. At JPM’21, CEO Brent Shafer stated the company sees a potential for $1B in revenue in the next few years from its RWE/RWD initiative. Add that to the Roche acquisition of Flatiron clearly signals, there is gold in those mountains of clinical data.