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Ep11: Peter Hames, Founder of Big Health

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DOCSF 2021

Transcript

 

0:03 Eugene Borukhovich 

Welcome to the Digital Therapeutics (DTx) Edition of Digital Health Today, and I’m your host, Eugene Borukhovich. In the last episode, I absolutely loved getting to know Brent Vaughan, CEO of Cognito. In mid-January, Cognito received FDA breakthrough device designation for a next-generation digital therapeutic in Alzheimer’s disease.¬†

Today, I’m speaking with yet another trailblazer in the DTx industry, Peter Hames. Peter is the CEO and founder of Big Health. Big Health’s company mission is to help millions back to good mental health. And with dozens upon dozens of peer-reviewed publications, and at least 10 RCTs, Big Health is at the top of the list of most-studied digital health companies to date.¬†

But before we dive in, Peter and I met way back in London, when Big Health was just getting started. I am absolutely sure it was a dark and rainy evening in a small startup room where Peter and Dr. Colin Espie were showing off their initial go-to-market approach for their first product, Sleepio. And now we jump to my conversation with Peter Hames. 

I’m here with Peter Hames, co-founder of Big Health. Welcome to the show. And as we start getting to know about the people behind these brand names, like Big Health, I’d love to get a little bit of your history– what drew you to Sleepio– and a little bit of your background.¬†

 

1:29 Peter Hames  

Thanks Eugene. I was witness to some of these early developments. So it’s been a winding road. Yeah. So I’m right now in San Francisco. But we founded back in the UK, many, many years ago now, and the initial impetus was born out of my own experience of insomnia. I got hit by not being able to sleep, and I did everything I could to try and get access to non-drug therapies. Cognitive Behavioral Therapy– I know from my degree in experimental psychology– is the first-line recommended solution to chronic poor sleep, but I couldn’t get it. All I could get was sleeping pills from my doctor.¬†

So I ended up out of desperation, really, self-administering a course of CBT from a self-help book. It was a very manual process and involved a lot of photocopying out sleep diaries and doing math, and you know, all this quite arduous work. But in just six weeks, I was totally betterРsleeping like a baby. That blew my mind and opened my eyes to this totally insane situation, which is that hundreds of millions of people across the world are suffering from insomnia, but also anxiety, depression, these chronic, mental and behavioral health issues for which we have these proven non-drug interventions like CBT that no one can get. They are traditionally delivered by human therapists. So that is what inspired the idea that a pure software approach would buy us the scalability and consistency of drugs, and give us a vector to try and get effective care to the literally tens and hundreds of millions of people across the world with these problems, who currently get nothing. 



3:11 Eugene Borukhovich 

That was a big trigger for you. 

 

3:13 Peter Hames  

Yeah. And it wasn’t called digital therapeutics back then.

 

3:16 Eugene Borukhovich  

Yeah, I was just gonna get to that. But before we get to that, you mentioned that I witnessed some of it. We were reminiscing about when the last time was that we actually spent some time together, not just a few minutes here and there. And it was actually in the early days, in 2012 or 2013. Dr. Colin Espie, I think was in the room, and you guys were like, “this is what we’re trying to do. This is what we’re doing.” But I want the listeners to get to know you, Peter. So that’s what brought you here, but maybe give us a little bit of your background.¬†

 

3:50 Peter Hames  

I have the resume of a lunatic. It makes absolutely no sense whatsoever. Like I said, my degree was in experimental psychology. So I’m not a clinician, but I do know the science behind these non-drug interventions for these problems. I’ve had this winding path through everything from advertising and marketing to karaoke, believe it or not.

 

4:16 Eugene Borukhovich   

We’re not going to practice here.¬†

 

4:18 Peter Hames  

No, it’s been a while, probably a bit rusty. But prior to what is now Big Health, I worked for someone called Martha Lane Fox. She is very prominent in the UK, as you know, and is a tech entrepreneur who is now part of the House of Lords and a pioneer that I learned a lot from. And that’s where I got my grounding in the ability to build digital products and take them to market. There’s a sort of logic to it, in the sense that it was what my education was based in. But there’s certainly not a straight line in terms of my background.¬†

 

4:52 Eugene Borukhovich   

But I think the beauty of you driving Big Health is that the premise of it was your own challenge and your own problem, and now you’ve got a partner to give you the clinical view of it. I’m also thinking back to that relatively dark room in 2012 or 2013. What were the fundraising efforts like when people thought, “what? Digitized sleep therapy? What the hell is that? How does it work?” How are you explaining this? What was the journey in the early days? Because to your point, the term of digital therapeutics was just coming on the scene, for lack of a better term.¬†

 

5:29 Peter Hames  

Completely. You remember in Europe in particular, in London, in those days, even the idea of digital health wasn’t really a thing. There certainly wasn’t a community, or there was a very small community. If today we talk about models being untested, back then it was a lot of vision-based work; a real belief in the fundamental needs that what we were doing related to. So to your point, we can talk about the move to the US, which was sort of pivotal, but we bootstrapped for a long time. And I think it wasn’t until 2014 that we raised our first institutional money. We run very lean, and that I think created a foundation of a culture, which still remains to this day at Big Health, of ingenuity and of using those constraints to drive creativity, which I really believe in. We didn’t take a stance where we tried to raise a ton of money, honestly. But there certainly wasn’t an environment in which it was a known sector that investors were piling into.¬†

 

6:36 Eugene Borukhovich   

And by the way, you are correct, it was 2014. I’m not a journalist, but I had to double-check some data beforehand.¬†

 

6:43 Peter Hames  

Yeah, a long time ago.

 

6:44 Eugene Borukhovich   

So talk to me about that market entry, because I know that you’re very much of a believer in consumer-driven health. There are still some companies around that we both know, the founders that have navigated through the NHS, and I think– and please correct me if I’m wrong– your concept was of a Boots partnership. I remember that was early on. Talk about that path to go to market and your early trials and tribulations.

 

7:15  Peter Hames  

You know, this is one of those things where I have the luxury of hindsight and can post-rationalize everything to make it look like it was a massive plan. And it wasn’t. It really was a winding case of trial and error and feeling our way through. Our first thought was, “let’s just take this direct to the consumer.” And as you say, we had a partnership with Boots, the pharmacy chain in the UK. We literally had physical boxed products on the shelf next to the sleep medications.¬†

It did work. It was a really valuable learning process, which eventually made me realize something very simple; interventions such as CBT, or cognitive behavioral-based approaches, the reason that they’re recommended as the preferred, first-line intervention for many of these issues is because they’re so effective at delivering long-term outcomes. A relatively short course of an intervention can yield outcomes that last for many, many years. The reason it’s so exciting is because it’s empowering– it’s about teaching the individual to be their own therapist.¬†

So in that context, it is a difficult truth to reconcile with consumer business models, right? Because if you think about it, our mission is to help millions back to good mental health– no asterisk, no T’s and C’s. Every decision in the company needs to be justifiable in a straight line as to how it gets us closer to that goal. So what I realized belatedly was if we are really sincere about that being our mission, our commercial incentives should be aligned with that; we should be incentivized commercially to get as many people healthy and not needing us as quickly as possible. What I realized was our customer is not the end user– our customer is whoever economically benefits from that individual being healthy as quickly as possible. That customer is, therefore, whoever pays their healthcare costs. And so that’s why now we work with the NHS in the UK, because, you know, we’re now aligned.¬†

The NHS wants to get folks in the population healthy and has greater economic benefit the faster you do it. And in the US, we are focused on large employers and health plans who are economically incentivized. All that to say that, those early forays into consumers were so helpful, because when we came to the US, we arrived here with the conviction that we knew where we were focused. So when you say consumer-focused, it’s interesting; I think you can dissociate who pays from the way in which you enroll individuals. When we enroll individuals, I believe it’s important that it’s not disintermediated necessarily by prescribers and by other potential barriers.

 

10:05 Eugene Borukhovich   

So was the “aha” moment to go to the US? When you started working with the NHS, through that channel? Or did that come later?¬†

 

10:19 Peter Hames   

I love the UK, obviously, and have a huge passion–

 

10:22 Eugene Borukhovich   

You still have the accent. 

 

10:24 Peter Hames  

Maybe it’s even got even stronger since I’ve been here. You get way too much credit in the US when you’ve got a British accent. But yes, I love the UK, I think the NHS is one of the wonders of the world, genuinely. And that’s why we’ve continued to invest in it through all these years. However historically, when we were around, it was a really challenging place to get innovation adopted to a significant scale in health care. So it has its strengths, and also its weaknesses.¬†

And so it was, honestly, a very top-down– kind of an [inaudible]. We’d raised this first institutional money from Index [Ventures]– to credit Neil Rimer and his team– to have that big vision. That gave us the springboard to say, “actually we have the resources now that we can make that leap.” We were still very small at that point (there were maybe like 10 or 12 of us) and we got on a plane to California and didn’t look back. This is where we’ve been able to drive the business to scale.¬†

 

11:23 Eugene Borukhovich 

It’s interesting because there’s a lot of discussion on this side of the pond in Europe about entrepreneurs scaling– why they focus on the US market instead of staying and spreading, which is probably a whole podcast on its own. But we keep talking about the consumer or health consumer, and what I want to try to do in this podcast series is also demystify what a digital therapeutic is. What is that experience? Maybe talk a little bit about Sleepio, which is your core product, but also Daylight. What does that experience look like for me as an end consumer that’s struggling to sleep? And then you can talk about Daylight.

 

12:02 Peter Hames

The intent is to bring together two elements here. So the problem, like I said, that we’re trying to address here is the fact that 60 to 70% of people with no clinical level of mental health issues get nothing. Zero. Not drugs, not anything. And so at a population scale, how do you meet that gap? That inequity in the way that mental health is delivered? The solution needs to have certain qualities: it needs to be really scalable, it needs to be really effective, clinically effective. And in order to effectively meet people where they are, and engage them, it needs to feel more like entertainment than medicine. That’s our philosophy. So the experience itself is via an app or via the web. Take Sleepio, for example– it’s very animation-rich. You get greeted by a virtual animated sleep expert, the “Prof,” and his narcoleptic dog, Pavlov, bounds in and then falls asleep.

 

12:04 Eugene Borukhovich

I still remember that.

 

12:38 Peter Hames

It asks you a bunch of questions, makes a profile, and based on that, creates a very personalized program of a multiple-week CBT program. You can connect your wearable devices (if you have them) to automatically import your sleep data, and then that will adjust and adapt the program based on your progress. So we are now teaming up with story artists from Pixar to help build Daylight, as well as Alan Horne, who was the founding executive producer of RadioLab, to help craft that audio experience. 

Daylight continues that insight of what we found worked really well with Sleepio, which is it’s a fully automated experience. But we focus on making it feel human through this very approachable animation– the human voice– and making it personalized and adaptable to each individual. So if you’ve had a really rough time, they’ll react in a way that will say, “Look, you’re only on step three of this journey. If you need help right now, let’s just take a step back and rehearse some of the things that we’ve practiced before.” So synthesizing that therapeutic alliance is a really key element of what we do. The experience should feel more like a consumer app but deliver a clinical-grade therapeutic benefit to the individual.

 

14:14 Eugene Borukhovich

I’m always curious how startups and companies evolve on the original hypothesis of the business model. From those early days sitting in London to where you are now, how has it evolved?

 

14:28 Peter Hames

As I mentioned, I think one of the biggest step change insights was the “who pays?” I’m a huge believer in the value of staying laser-focused on the North Star of your mission. This is the value we’re bringing to the world– helping millions to get back to mental health. That is of such enormous value, economically and socially, that if we stay laser-focused on that, we’ll be fine. That revelation was really key. So when we came to the US, it evolved hugely based on that foundation.

Benjamin Franklin, to misquote him, once said something like, “wisdom is knowledge of your own ignorance.” When we first started in the US, I thought I knew about US healthcare– and I knew absolutely nothing. Now I think I know less than I did. We fell on our feet focusing on employers, but didn’t really know why that was such a great idea until several years later. So in terms of evolving the business model, it was a case of getting to know that buyer and payer, and progressively refining the way in which we met their needs, as well as the millions that we’re trying to help get back to good mental health.

 

15:53 Eugene Borukhovich

I know you guys are now partners with Willis Group and you’re also on the formulary at CVS– and I’ve spent some time at a PBM, years back– and just because you’re in a formulary, that may not actually mean anything if you’re not “prescribed” or sold or recommended. So can you talk a little bit about your channels? I know your North Star is the consumer, but can you talk about your lessons learned to date? Through the channels?¬†

 

16:19 Peter Hames

Yeah. I’m like a scratched record, because it all falls out of that. If you think about the mission to help millions back to good mental health, what lives within that is an implicit, go-to-market perspective– which is, this is about volume. Distribution to those in need has to be a very high priority. So in that context, a lot of the moves we’ve made have been to reduce the friction in that process. How can we retain the ability to reach out to and enroll individuals more directly than a population, and yet allow ourselves to be administered in a very low-friction way as the therapeutic that we are?¬†

So the partnership with CVS– we were working with them on the overall concepts of a digital formulary for a couple of years prior to going live. This is where I do think having an external perspective can be really valuable. At that point, no one was talking to PBMs, as far as I was aware, about digital therapeutics. So I was like, yeah can we get this administered along with your therapeutics? That’s in a nutshell our partnership with CVS. What that means now is that we have an integration with the back end, and what it means for the buyer or customer is that it can be administered in the same way as other therapeutics. So when we get our monthly invoice from CVS Caremark, Sleepio and Daylight are itemized on it alongside all the other therapeutics that that population might have used in that previous month.

 

18:03 Eugene Borukhovich

This is super interesting. So I spent 10 years at a PBM, I don’t know if you knew that or not. That’s actually what brought me to Europe to begin with. We had call centers with pharmacists, thousands of them. The interesting part is, if you think about you guys being on the formulary, human beings are still involved. We started this discussion 10-15 minutes ago around self-administration and self-help; where’s your head around doctors, nurses, and even health coaches in the picture with your product specifically? Not to mention pharmacists that may get inbound calls or may need to adjust the dosage for lack of a better term?

 

18:44 Peter Hames 

Totally. To be clear, I think clinicians and the provider is obviously an irreplaceably important component of any patient’s health care journey. To take it to the extreme, in the NHS, general practitioners (GPs) are the gatekeepers for all health care, basically. So everything has to flow through appropriately to the GP.¬†

But again, my perspective on this is really driven by a couple things. Point one, the goal is to have a volume-level solution here. Point two is these interventions are in broader sense a low risk. They’re generally pretty safe, and you’ve seen that acknowledged by the FDA in the US. Even in the last month or so, in the emergency guidance they published around COVID, they said these solutions are accepted. And we have a lot of “in the wild” data now to support that, as well as prospective peer-reviewed data. So you put those two things together and say you believe in a time in the not-too-distant future where doctors will, as a matter of course, prescribe digital therapeutics. But we are quite a long way from that being true, and it’s going to be very expensive to get that to be the case.¬†

My view is that given the low technical risk, digital therapeutics are not a panacea (they have a lot of constraints) but there are also unique capabilities that pure software therapeutics bring you, such as being able to get instant access from the link in an email. That is something that most healthcare is not able to do. So that has really shaped my perspective on how clinicians and providers remain a really important stakeholder group and eventually will be a really significant distribution channel of digital therapeutics. But I think in the meantime, there are other avenues and more novel, inventive ways of reaching people in need that don’t rely on that whole group changing their behaviors and their workflows.

 

21:00 Eugene Borukhovich 

Well it’s time for a question from my journalistic partner on this podcast, Brian Dolan, who is the founder of Exits & Outcomes and– as I like to call him– the digital health detective. Let’s see what question Brian has for our guest today.

 

21:15 Brian Dolan  

The last time I checked, Big Health’s offerings have been part of 30 peer-reviewed papers and 10 RCTs. That has to put your company toward the top of the list of digital health companies with the most studies. How did Big Health manage to generate so much evidence? What is Big Health’s evidence strategy? And how is it evolved?

 

21:35 Peter Hames

Thanks, Brian. Yeah I appreciate you acknowledging that. It’s a little bit more now. We now have 53 peer-reviewed papers and 13 randomized controlled trials. But you’re absolutely right. To my knowledge, there is not another digital therapeutic in the world that has a larger evidence base of this rigor and quality. And that’s really why we have been featured in leading clinical guidelines globally, from the American College of Physicians to working closely with the NHS in the UK. I appreciate you acknowledging that.¬†

So our approach to clinical evidence collection started from the very earliest days. You might remember from the early days that we probably had our first RCT in our very first meeting back in 2012/2013. My co-founder, Professor Colin Espie– who incidentally is the guy that wrote the book that I used to tackle my insomnia– takes all the credit for that. He’s at the University of Oxford. From day one, given the mission, our perspective is really bottom-up versus top-down. This was not about a commercial strategy, it was about a philosophy, which was if we are striving to create true therapeutics, then we need to apply the same standards and rigor to them, whether digital or pharmacological. So clinical evidence was always– from an ethical perspective– a big part of what we believe is important. And so point one is the way in which we generate that much evidence is we support science– the answer is almost too banal.¬†

Colin, being a leading academic was very mindful. His colleagues thought he’d joined the “dark side” by getting involved in a commercial entity. So one of the first things that we did was publish a list of research principles publicly that we would commit to, such as, we will support independent investigators if their protocols are IRB-approved, and they’re rigorous. We will not have any control over publication, publishing be damned, and if it shows it doesn’t work, that’s science. And that gives us a direction to improve or change what we do.¬†

Over the years, it has created this virtuous cycle of good will with the clinical and research community, which has meant we’ve attracted and collaborated with the leading researchers in the world, because they know we’re committed to good science and they’re papers get published in the top, high-impact journals. They’re very highly cited, and as a result, more researchers want to work with us in support of their research. So it’s one of these things that you can’t really shortcut. It’s been the product of a very sincere commitment over many years to the value of science and true, unbiased clinical evidence. It’s snowballed, so the momentum has built year over year over year. I can’t remember the number of studies we have live now, but it’s an incredible acceleration of evidence collection.

 

24:26 Eugene Borukhovich

I’ll jump in here. If I go back eight to 10 years ago, when a lot of the digital health startups were forming, there were a number of just “geeks.” But you brought Dr. Colin Espie on board from day one, and that allows you now to publish. Sleepio drives greater cost savings than group CBT or drug therapy. Having science at the core of it, and very early on, was the tack that you guys took that obviously benefited your scaling efforts. You know I spent some time in pharma, and I’ve been asking pretty much every guest this; are digital therapeutic companies like yourselves potentially “swallow the pill” inside? So you have a self-help offering that’s better than a drug, but maybe there are pills– I don’t want to pick any particular pills– that can go with you or not? Or is it the other way around? Once you guys get large enough and have substantial revenues, a pharma company that may have molecular therapies for this could end up buying you. What are your thoughts and visions of the future on where the market is going to go with this? And its relationship with pharma?

 

26:05 Peter Hames   

So again, my lens is what is going to help the most people as quickly as possible. How are we going to help millions back to mental health? Pharmacotherapy is a really important component of that; the world would be a lot worse place without effective pharmacotherapies. But my experience that led to the founding of what is now Big Health speaks to the fact that they are clearly insufficient to meet the breadth of need and preference in the population. If you think of the service design level, the end state here is going to be some combination of pharmacotherapy, digital therapeutics, but also human-delivered talk therapy. It’s going to be about a holistic solution, where hopefully, more gaps are filled by virtue of the digital therapeutics being brought to bear.

I personally never say never. I am not anti-drug, I’m pro-evidence, and to the extent that anybody from any industry is truly aligned with the mission to help millions back to mental health, I think it’s worth exploring how we can complement each other’s assets and skills.

In terms of the forward path here, you probably know better than me, given your experience at Bayer. My experience of pharma has been that pharma is such an enormous juggernaut with such deeply established ways of doing things and thought processes. I think it’s going to take a bit of time for organizational learning to happen and for confidence to happen at scale, where the true potential of any pairing will really be brought to bear. I don’t know what you think, but pharma still, like so many of us, is understanding this space, just getting its head around it.

 

27:56 Eugene Borukhovich   

That’s why my going title for the book that I’m writing is Hard Pill to Swallow. That’s a separate podcast and discussion.

 

28:05 Peter Hames  

Totally. My point is it’ll happen eventually. But I don’t know the exact path that that will take. And I think it’s going to take a bit of time. My view is that in digital therapeutics, we need to invent our own new models. Start from every new therapeutic class, from biologics in the late 70s to more genetic innovations recently, they lend themselves a completely fresh thinking about the value chain. I think with digital therapeutics, more than most, there’s so much opportunity that I think that as innovators, it’s incumbent on us to demonstrate that. I think folks like pharma will then find it a lot easier to come along that journey. I don’t think pharma is necessarily gonna solve it, if that makes any sense.

 

29:02  Eugene Borukhovich  

Yep. And myself included, there is no right or wrong answer. I think the field will play out, but this is part of the reason why I wanted to explore trailblazers like yourself. There are many paths to take, including more on the disease management 2.0 side, etc. 

But we started with who you are and how you got there, and I’d love to conclude this with what gets you up in the morning. What is your “why?‚ÄĚ I think I know the answer. But I’ll let you speak for yourself.

 

29:37 Peter Hames 

I almost have a glib answer there, like world domination. No.

 

29:41 Eugene Borukhovich   

Yeah, that’s exactly what I thought you would answer.

 

29:43 Peter Hames   

No, obviously not. It will probably be no surprise that that purpose of helping millions get back to mental health is the thing that excites me and gets me out of bed. When I look ahead at the enormous need– I viscerally experienced it myself. I think most folks listening to this will have either personally experienced issues around sleep or mental health or know someone close to them who has and seen the impact that it has. And now knowing that we have a technology, a therapeutic technology that is only a few clicks away from genuinely being able to transform the lives of tens, hundreds of millions of people, that is the thing that excites me. Creating these new pathways, creating these new models, but most importantly, seeing the impacts as a result. So that’s the thing that gets me out of bed in the morning. Very well slept, obviously, when I get out of bed in the morning.

 

30:39 Eugene Borukhovich   

Perfect, perfect. Exactly. Well, Peter, thank you very much for making the time and I am sure that our listeners learned quite a lot from you.

 

30:47 Peter Hames   

Thanks so much, likewise, really appreciate it. Thanks.

 

30:51 Eugene Borukhovich   

Thanks so much for tuning into Digital Therapeutics Edition of Digital Health Today, a production of Mission Based Media. Be sure to hit that subscribe button to this podcast on your favorite podcast player, so you’re then automatically notified when we post our upcoming episodes where I speak with dozens of leaders and trailblazers who are forging the path for digital therapeutics. If you’d like to learn more about Your Coach Health, or Brian Dolan’s Exit & Outcomes, you can always find the links to this and more in the show notes for this episode. You can connect with me personally on Twitter @HealthEugene, or follow my journey of writing my first book, Hard Pill to Swallow at hardpilltoswallow.substack.com. I’m Eugene Borukhovich, and catch you next time.

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