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In health care, major drug makers have sought to collaborate with health tech up-and-comers. And on the surface, there’s good reason to think that these partnerships can translate into products that can benefit human health.
But the reality is that the interests of the two parties do not always align.
The latest example comes from Sanofi (SNY), which announced earlier this week that it would exit research on cardiovascular disease and diabetes.
As part of that strategic shift, the French drug giant will pull back from an ambitious venture to use digital tools to help patients manage their type 2 diabetes, the company told investors. That project is Onduo, a joint venture launched in 2016 with $500 million split equally by Sanofi and Alphabet life sciences unit Verily.
At the time, Sanofi said Onduo will focus “specifically on developing solutions that could help people make better decisions about their day to day health, ranging from improved medication management to improved habits and goals.”
But this week Sanofi CEO Paul Hudson said that his company had “over-invested” in Onduo and will no longer be involved in running the venture, though it will remain an investor in it.
The news seems to reinforce a trend: the apparent incompatibility between traditional players and new approaches to health tech.
It also comes just weeks after Novartis’ generics unit, Sandoz, ended a deal to commercialize Pear Therapeutics’ smartphone apps for substance use disorders.
At the same time, Sanofi’s restructuring news shows how established companies are borrowing — and trying to improve on — the strategies of tech-savvy startups. Sanofi hopes to sell Cialis, its erectile dysfunction drug, over the counter — which sounds a lot like a challenge to startups that market easy online prescriptions for such drugs, as Bloomberg columnist Max Nisen noted on Twitter.
Only time will tell which approaches to health tech end up working for traditional players in health care. But as illustrated by Sanofi’s decisions this week, that process is likely to continue to involve plenty of experimentation. The health care establishment may not yet have figured out how to make money from health tech, but it’s eager to keep trying.
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