- The digitalization of health data and the connection of the entire country’s medical information is Canada’s largest health tech opportunity. Our social healthcare system would enable us to implement this change leading to the emergence of many sub-sectors within health.
- We must eliminate provincial barriers and silos that reduce our ability to innovate and to provide all Canadians with life improving home grown health innovations.
- When it comes to health talent, it is increasingly important to strengthen connections between the companies in the health innovation industry and academia, to ensure our curricula and work experience programs are producing the best health graduates and innovators possible.
We need to be more harmonized as a country and reduce barriers to innovation across provinces. Much duplication of effort can be reduced from a procurement, regulatory as well as programmatic standpoint. If it is not possible to break down silos at the constitutional level, we have to pull certain levers at the federal and provincial levels to align them. It does not make sense that people in certain provinces cannot access Canadian health innovations while others in the country can. The federal and provincial governments just need to make a decision to align and enable health innovation.
What do you assess as the state of health innovation in Canada and how does Canada compare globally?
When I think of health innovation, the first thing that comes to my mind is digital health, which affects everything from healthcare delivery to the advancement of innovation – digitization will modernize healthcare in ways that most of us can’t even envision.
“Digital health affects everything from healthcare delivery to the advancement of innovation – digitization will modernize healthcare in ways that most of us can’t even envision.”
For example, our company, Augurex, is in the diagnostic space; we develop blood tests. It is generally believed that all testing that is currently done in diagnostic labs will eventually be done on our phones; it’s just a matter of time, technology and reduction of regulatory barriers. Canada is behind other countries that are leveraging this convergence of health and information technology because we are using our constitutional provincial authority over healthcare, privacy and data security as a distraction. Why can we get this right in financial tech and not in health tech? In my opinion, this series of political excuses are getting in the way of progress for better health, disease prevention and an opportunity for Canada to own the global podium on something meaningful in the innovation space.
Why is Canada falling behind other jurisdictions in health innovation and what must we do to catch up?
One of the conclusions of the Health and Biosciences Economic Strategy Roundtable was that provincial silos hold us back. We need to be more harmonized as a country and eliminate barriers to innovation across provinces. From a procurement, regulatory as well as programmatic standpoint, we can increase our progress and access to novel, life changing, Canadian-conceived technology.
The regulations we have around health data digitization are concerned with breach of privacy. However, it is really easy to “pick up” a physical paper chart on any ward in a hospital, that has the patient’s name written right across the spine of a binder. Many of the red herrings that people put up around health data privacy are excuses for not implementing a proper integrated digital health system. Financial technology has been digitized and created a burgeoning financial segment that piggybacks onto various payment systems. Our health data is similarly critical to our financial data, so if the financial sector can be digitalized, why can’t healthcare? There is no better environment than the one that we have in Canada to digitalize health since we have a social healthcare system and can make an expedient switch to digital systems, given the right political will. I think we can catch up with our international peers and surpass them; we just need smart people to make the right decisions. Northern European countries like Denmark and Norway, as well as the UK, have been successful at this. Nobody in the world has it completely figured out, but many countries are on track – so Canada must get there, too and ideally lead the way.
“There is no better environment than the one that we have in Canada to digitalize health since we have a social healthcare system and can make an expedient switch to digital systems, given the right political will.”
We should also augment and streamline our funding processes to make Canada a place where people want to invest in companies and talent. Accel-Rx is a great accelerator with one of the best programs for mentorship of entrepreneurs and CEOs. Universities are trying to change their curricula to better support industry because they know that their graduates need to be employable and relevant. However, funders ultimately end up sprinkling money instead of properly funding the development of talent and accelerators. Another cultural shift we could benefit from is to have various players in the health ecosystem leverage each other’s technical expertise and access to capital. I think many of us could perform much better combined than apart. I’m not aware of any meaningful, low-involvement programs that incent this type of intra-sectorial collaboration. Joining forces and creating a culture where collaboration is rewarded through tax breaks and other mechanisms above and beyond the current Scientific Research and Experimental Development (SR&ED) tax credits would help us achieve more scale.
To get more money into the ecosystem, I would pitch to philanthropists who are donating hundreds of millions of dollars to charitable causes, and I would ask them to focus their giving on something that is going to move the needle in health, in partnership with public and private funders.
Which are Canada’s best global and national opportunities in the health innovation sector?
Certainly, the United States is still the highest reimbursement market. It is capitalistic, not scared to innovate and happy to do business with Canadians. Hands down, just due to its reimbursement model and the people’s willingness to pay make the US the go-to market for Canadian innovations. The exchange rate is also highly favourable for Canadian companies exporting to the US. They are working with 30% more than they would have, if they were just selling to Canada.
The biggest opportunity for Canada in health tech would be if the government could connect the whole country’s medical information. It is not about getting specific patient data; this is about understanding segmented, aggregated and convergent data that informs the development of specific drugs, diagnostics and various interventions based on anonymized subgroups of patient profiles, their diseases and the health care journey. Connecting our data across the country alone would lead to the emergence of an astronomical number of innovations, educational tools, interventions and sub-sectors within health, and the data would be leverageable for research, insurance and population health benefits.
How can Canada better graduate, attract and retain the top talent in the health sector?
We need more initiatives like the Business/Higher Education Roundtable (BHER). Today, work experience is less valuable than being bright-eyed, bushy-tailed and skilled. People with a lot of experience will tell you the way industry has always been and why something will not work. In innovation, we need people who are not scared of anything, actually have a blank slate and can imagine how things could be. This is why I really like the idea of companies working closely with academia. Because if we can build the skills that are needed for our economy in IT-related health fields, we will be unstoppable. We have a lot of experienced business people who are not scared of anything, but a lot of the time, it is conservative technical experts that hold back the modernization of healthcare. The more the health innovation industry can work with academia in terms of curriculum development and cross-semination, the more we are going to have a fertile soil yielding unstoppable talent.
Health technology involves machine learning, artificial intelligence and other advanced technologies. When people visit their doctor, sometimes doctors do not even physically touch them by the time they leave. They ask patients a series of questions and give them a requisition for a lab test or x-ray. A machine learning algorithm could do the same and is already being developed. This isn’t about replacing doctors, but rather equipping them with information and decision tools to help them do the higher order functions that machines can’t do. The development of technologies that support concepts like this are very exciting to young people who are IT-savvy, curious, determined, fearless and skilled.
“One of the things we recommended in the Health and Biosciences Economic Strategy Roundtable is a program to help offset the cost of hiring C-suite professionals, which is competitive and can be cost prohibitive.”
When it comes to talent attraction, one of Canada’s challenges is its high cost of living and lack of critical mass of companies, which leaves few alternatives for employment if the initial job does not work out. The high cost of living makes it difficult for people to move their families over, so the company usually has to incur some of that expense. At the same time, Canadian companies don’t have access to substantial capital, so it is hard to recruit the best global talent, pay their salaries and keep them here.
One of the things we recommended in the Health and Biosciences Economic Strategy Roundtable is a program to help offset the cost of hiring C-suite professionals, which is competitive and can be cost prohibitive. It is not the $40,000 entry-level positions that are most unaffordable for companies, but the high-level strategic ones. So, I am not necessarily talking about people who have been in the industry for 25 years but those people who have 15 or 20 years of experience and have run, launched and taken other companies public or to a successful outcome.
Looking back on your journey as a health entrepreneur what would you have done differently if given a second chance – and what would your advice be for Canada’s future health entrepreneurs?
We started Augurex in 2008, at the time not knowing that we were entering one of the lowest economic times of the last two decades. It was harder to raise capital and a lot of “deal-making” companies were tightening their purse strings. But we just focused and innovated because we had to keep moving forward. It was our first time starting a company, so we got to work and bootstrapped it.
If there is one thing that I might have done differently given a second chance, it would be raising more capital as soon as we emerged in the market around 2012 or 2013. That could have given us buffer rather than living hand to mouth over several years. We did start generating revenues shortly afterwards, but with growth capital, we could have advanced our pipeline assets much faster, thereby delivering more innovations and benefits to patients and Canadians. So, I would encourage new health entrepreneurs to get as much funding as they possibly can early on, by building the vision, get people to see it, get to work, and stop worrying about your next round of financing.
“I would encourage new health entrepreneurs to get as much funding as they possibly can early on, by building the vision, get people to see it, get to work, and stop worrying about your next round of financing.”
Augurex partners with large diagnostic companies that have the reach and the depth of access to the market that we did not set out to have. For example, LifeLabs, Quest and LabCorp already have patient service centers, so we sell them our material or kits, and they can perform the test for their patients. That is the business model that we have reduced to practice both in Canada and the US. We are very proud of having a Canadian innovation that came out of the University of British Columbia and University of Alberta, advanced by Augurex, a Canadian biotech company, mostly funded by Canadian shareholders, that delivers a meaningful clinical benefit to Canadian clinicians and patients. Hundreds of thousands of patients have been tested with our JOINTstat 14-3-3η blood test in rheumatoid arthritis and we would never have been able to do that with a different business model in this amount of time. This is an example of how working to various companies’ strengths in the ecosystem benefits everyone. Canada’s future health entrepreneurs need to be in alignment on the purpose of their innovation, their target patients, and the most effective way to reach them and the clinicians.