Ten years after dropping out of college, an unknown entrepreneur named Rishi Shah has become tech’s newest billionaire.
The source of his $3.6-billion estimated net worth: his 80% stake in his startup Outcome Health, which places iPad-like tablets and large-format touch screens in doctor’s waiting rooms and offices. This morning, Outcome says it is raising just under $600 million from august names like Goldman Sachs, the Google-affiliated CapitalG, Pritzker Group, and dozens of strategic healthcare investors at a stunning $5 billion pre-money valuation. (Forbes’ estimate of Shah’s worth includes no liquid assets beyond his ownership stake in Outcome.)
Shah, 31, says Outcome Health will help patients stay healthy (a video on Outcome’s website boasts: “That wallboard saved my patient’s life”) and will garner money from food marketers, hospital systems, and, most of all, health insurance companies, who will pay to use Outcome’s tablets. But right now the biggest source of Outcome Health’s sales – which Shah says approached $200 million last year and are growing at more than 100% a year – come mostly from the pharmaceutical industry. Outcome’s clients include Allergan, Bristol-Myers Squibb, GlaxoSmithKline, Merck, and Pfizer. “We expect accelerating growth going forward,” Shah says.
For drug companies, the value proposition is obvious: reach patients when they are thinking about their health, in the doctor’s waiting room or in the exam room itself. Outcome Health claims it has tablets or wall-mounted screens in 40,000 or so doctor’s offices, which it says accounts for 20% of U.S. doctor’s offices. About 100 content partners provide what Shah boasts is the largest English language health library in the world. Doctors can pay for the screens, but they usually opt for an ad-supported product instead.
How does this work? Take, for example, Outcome’s offering for infusions centers, where cancer patients sit for hours as chemotherapy is infused into their bloodstreams. Nurses make sure each tablet is set up with information relevant to a patient’s cancer. The tablets also offer meditation apps, and allow patients to watch movies. They also get drug ads. “The tablet’s user experience also provides a number of opportunities for partner messaging, such as banner ads and full-screen interstitials,” an Outcome Health marketing video says.
Shah claims the company is one of the largest purchasers of large-format touch screens, which it puts on walls in exam rooms. Instead of the 3-D models that drug and device companies once gave to doctors, the new products allows them to move 3-D models on a screen. Outcome also offers drug companies opportunities not only to market their brands, but to recruit patients into clinical trials, potentially helping the patient but also driving down the cost of research.
“Maybe this is the new substitution for the promotional items pharmaceutical companies used to give away,” says Adriane Fugh-Berman, a professor in the department of pharmacology at Georgetown University and a critic of pharma marketing. She says she worries about specific drugs being mentioned in the doctor’s office. “By being handed the tablet, that’s an endorsement by that [doctor’s] office.”
[Source”timesofindia”]
