Venture capital funding in the digital health space cooled significantly in 2022 following a red-hot 2021. Overall, digital health companies raised $15.3 billion last year, down substantially from the $29.1 billion raised in 2021—but still above the $14.1 billion raised in 2020, according to research from Rock Health, a seed fund that supports digital health startups.

Analysts predict investors will still put a good amount of money into digital health in 2023, particularly in alternative care, drug development technology, and software that reduces physician workload. But investors will likely pull dollars away from a few specific sectors this year.

“There is definitely more diligence, a little bit more skepticism in the investments that are made. So you tend to see investments go slower because diligence is taking longer or investors are being a little bit more conservative,” Adriana Krasniansky, head of research at Rock Health, told Healthcare Brew.

Direct-to-consumer products. The first sector in which Krasniansky expects to see funding slow this year is direct-to-consumer (DTC) products. One reason is that with recession fears, “Consumer spend is not as readily available,” Krasniansky said.

But Apple’s new data privacy rules are also partially to blame. As of April 2021, apps sold through Apple’s App Store must ask users for permission to track activity, and users can opt out. That tracking data is crucial for advertisers to create personalized ads.

“Apple's privacy measures have impacted customer acquisition costs, making the DTC channel more challenging for a lot of startups—and not just digital health startups,” said Krasniansky.

Keep reading here.—MA

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Drugmakers are rushing to develop the next needle-free generation of diabetes medications to meet the growing demand for injectables used off-label for weight loss.

Dan Skovronsky, the chief scientific and medical officer of Eli Lilly and Company, told investors in a February earnings call that oral medications will likely play a large role in treating the rising number of obesity cases across the globe.

The WHO estimates that more than 1.9 billion adults are considered overweight worldwide (including 650 million who are obese). Skovronsky argued that companies need to look beyond injectable drugs—like Lilly’s Trulicity and Mounjaro, which treat Type 2 diabetes—to find pharmaceutical solutions for potential weight loss treatments.

“Just given the scope of the problem around the world, we’re going to need orals,” he said, adding that since obesity is often chronic, patients may have to manage it for life. “A lot of times, in medicine, that doesn’t happen.”

Skovronsky, who also serves as EVP of science and technology and president of Lilly Research Laboratories, pointed to the company’s oral GLP-1 (glucagon-like peptide 1 receptor agonist) as one prospective pill that could one day “match the safety, tolerability, and efficacy of injectables”—a top priority for Lilly. Its oral GLP-1, orforglipron, is in Phase 2 trials for Type 2 diabetes and obesity, and the drug is expected to enter Phase 3 in 2023.

“You could bet we’re working on oral solutions that can bring additional incretin activity to patients in a pill. Nothing ready to disclose today, but we’re working hard,” he said.

Keep reading here.—SY

Do you work in healthcare or have information about the industry that we should know? Email Shannon at [email protected]. For completely confidential conversations, ask Shannon for her number on Signal.

French health IT firm Withings made a splash at CES ’23 in January with their U-Scan urine analyzer—but the product, which transfers personal medical information to the cloud, has raised questions about health data security.

U-Scan is a small, flat, circular device that sits in your toilet bowl. It analyzes your urine and sends that information to a medical cloud run by a third-party partner in Europe, ASIP Santé.

It’s that transfer of information—sensitive health information that could reveal private information about the patient’s personal well-being—that puts the data into a digital space where it could, potentially, be hacked.

Julius Dewavrin, a product manager at Withings, told IT Brew at CES that the company takes security seriously—not just for U-Scan but for its other medical products, like its scales and blood pressure monitors, as well. In 14 years of operations, Dewarvin claimed, Withings has never been shut down by a hack, attributing this to the work of the company’s IT department.

“We are audited on a regular basis to check if all data is safe and secure,” Dewavrin said. The data is also encrypted, he added, and not tied to a user’s name or identity.

You’re in luck. While it’s possible that a hacker could penetrate Withings, Dewarvin believes that’s unlikely.

“Many global companies are attacked on a daily basis,” Dewavrin said. “The team is prepared for the better or worse attack.”

Hip-HIPAA hooray. Questions surrounding health data come from a real uncertainty on the part of consumers and providers alike with respect to protections, according to Jon Moore, senior VP and chief risk officer at health IT security firm Clearwater.

“You’ve wandered into a bit of a gray area in terms of data privacy and regulation in the US,” Moore told IT Brew. “Most people in the US assume that their data is going to be secured, in particular data associated with their health.”

Read more in IT Brew.—EH

Today’s top healthcare reads.

Stat: Globally, one woman died every two minutes “from preventable causes related to pregnancy and childbirth” in 2020. (United Nations)

Quote: “Hospice can be an important part of a patient’s care, but only if it is operating as intended.”—Lawmakers in a letter calling for the Centers for Medicare and Medicaid to reform the inspection process for hospice providers (ProPublica)

Read: Medical malpractice policies make it difficult to sue a doctor for sexual assault. (ProPublica)

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