market for portable medication compliance devices

THE MARKET FOR PORTABLE MEDICATION COMPLIANCE DEVICES

Drivers, Players and Challenges

Dr. Felix Beyeler and

Alok Narula

June, 2012

TABLE OF CONTENTS

1 Executive Summary ................................................................................................................. 1 2 Introduction............................................................................................................................... 3 3 Market Dynamics ..................................................................................................................... 5 3.1 SIMPHS Report on the Market for RMT/PHS Devices ........................................................ 5 3.1.1 Data Sources ................................................................................................................................................6 3.1.2 Analyses and Outcomes..........................................................................................................................7 3.1.2.1 Frost & Sullivan................................................................................................................................................... 8 3.1.2.2 Global Market Data............................................................................................................................................ 8 3.1.2.3 SIMPHS Research ............................................................................................................................................... 9

3.1.3 Conclusions ............................................................................................................................................... 10 3.2 OECD Demographic Drivers for RMT/PHS Devices ..........................................................12 3.2.1 Population above 65 Years................................................................................................................. 12 3.2.2 Public Funding of Healthcare............................................................................................................ 13 3.2.3 Healthcare Providers per 1000 Population ................................................................................ 15 3.2.4 Healthcare Resources per 1000 Population ............................................................................... 17 3.2.5 Prevalence of Chronic Diseases........................................................................................................ 18

3.3 Health Industry Drivers for RMT/PHS Devices..................................................................19 3.3.1 Missed Pharmaceutical Sales due to Medication Non-‐Adherence .................................... 19 3.3.2 New Revenue Opportunities for Smartphone Manufacturers and Mobile Network Operators .................................................................................................................................................................. 20

4 Competition............................................................................................................................. 22 4.1 Existing Products..........................................................................................................................22 4.1.1 Vitality GlowCaps ................................................................................................................................... 24 4.1.1.1 Operation............................................................................................................................................................ 24 4.1.1.2 Cost of Acquisition (Buy)............................................................................................................................. 24 4.1.1.3 Pros ....................................................................................................................................................................... 25 4.1.1.4 Cons....................................................................................................................................................................... 25 4.1.1.5 Distribution Channel ..................................................................................................................................... 25

4.1.2 Philips MD2............................................................................................................................................... 26 4.1.2.1 Operation............................................................................................................................................................ 27 4.1.2.2 Cost of Acquisition (Buy)............................................................................................................................. 27 4.1.2.3 Cost of Acquisition (Lease) ......................................................................................................................... 27 4.1.2.4 Pros ....................................................................................................................................................................... 27 4.1.2.5 Cons....................................................................................................................................................................... 28 4.1.2.6 Distribution Channel ..................................................................................................................................... 28

4.1.3 Healthonemed DAP ............................................................................................................................... 29 4.1.3.1 Operation............................................................................................................................................................ 29 4.1.3.2 Cost of Acquisition (Buy)............................................................................................................................. 30 4.1.3.3 Cost of Acquisition (Lease) ......................................................................................................................... 30 4.1.3.4 Pros ....................................................................................................................................................................... 30 4.1.3.5 Cons....................................................................................................................................................................... 30 4.1.3.6 Distribution Channel ..................................................................................................................................... 30

4.1.4 MedSmart MD2 Plus.............................................................................................................................. 31 4.1.4.1 Operation............................................................................................................................................................ 31 4.1.4.2 Cost of Acquisition (Buy)............................................................................................................................. 32 4.1.4.3 Pros ....................................................................................................................................................................... 32 4.1.4.4 Cons....................................................................................................................................................................... 32 4.1.4.5 Distribution Channel ..................................................................................................................................... 32

4.1.5 MedSignals ................................................................................................................................................ 33 4.1.5.1 Operation............................................................................................................................................................ 33 4.1.5.2 Cost of Acquisition (Buy)............................................................................................................................. 34 4.1.5.3 Cost of Acquisition (Lease) ......................................................................................................................... 34 4.1.5.4 Pros ....................................................................................................................................................................... 34

4.1.5.5 Cons....................................................................................................................................................................... 34 4.1.5.6 Distribution Channel ..................................................................................................................................... 35

4.2 Large Companies in the RMT/PHS Space .............................................................................38 4.2.1 Intel-‐GE Health Guide ........................................................................................................................... 39 4.2.2 Bosch Healthbuddy ............................................................................................................................... 40 4.2.3 Honeywell Hommed.............................................................................................................................. 41 4.2.4 Philips TeleStation................................................................................................................................. 42 4.2.5 Estimated Revenues of the 5 Big Players in RMT/PHS.......................................................... 43

4.3 Business Models ...........................................................................................................................44 4.3.1 Pharmacy Benefit Managers / Distributors................................................................................ 44 4.3.2 Healthcare Facilitator / Health Insurance Provider ............................................................... 45 4.3.3 Charitable / Mainstream Hospital .................................................................................................. 45 4.3.4 Mobile Network Operator .................................................................................................................. 46 4.3.5 Retirement Community ....................................................................................................................... 46 4.3.6 Seniors Homecare Provider............................................................................................................... 46 4.3.7 Medical Devices Developer ................................................................................................................ 47

5 Intellectual Property............................................................................................................ 48 5.1 Existing Patents ............................................................................................................................48 5.1.1 U.S. Pat #6,294,999................................................................................................................................ 49 5.1.1.1 Operation............................................................................................................................................................ 49 5.1.1.2 Distinguishing Claims (including Claim #1)........................................................................................ 50

5.1.2 U.S. Pat #7,928,835................................................................................................................................ 52 5.1.2.1 Operation............................................................................................................................................................ 53 5.1.2.2 Distinguishing Claims (including Claim #1)........................................................................................ 53

5.1.3 U.S. Pat #8,069,056................................................................................................................................ 55 5.1.3.1 Operation............................................................................................................................................................ 55 5.1.3.2 Distinguishing Claims (including Claim #1)........................................................................................ 56

5.2 FemtoTools PMU Design ............................................................................................................59 5.2.1 Operation ................................................................................................................................................... 59 5.2.2 Distinguishing Claims (including Claim #1) ............................................................................... 61 5.2.3 Comparing FemtoTools PMU with Other Patents .................................................................... 63 5.2.4 Crucial Gaps in the FemtoTools PMU Design ............................................................................. 66

6 FDA/CE and Continua Guidelines for PHS Devices .................................................... 72 6.1 FDA Guideline for PHS Devices ................................................................................................73 6.2 CE Guideline for PHS Devices ...................................................................................................75 6.3 Continua Guideline for PHS Devices ......................................................................................77

7 Deployment Issues with RMT/PHS Devices ................................................................. 81 7.1 Barriers in the Uptake of RMT/PHS Devices.......................................................................81 7.1.1 Cost ............................................................................................................................................................... 81 7.1.2 Complexity ................................................................................................................................................ 82 7.1.3 Privacy ........................................................................................................................................................ 82 7.1.4 Perception ................................................................................................................................................. 83 7.1.5 Interoperability....................................................................................................................................... 83 7.1.6 Scalability................................................................................................................................................... 84

7.2 Solutions for Increasing the Uptake of RMT/PHS Devices .............................................84 7.2.1 Strengthening the User Base ............................................................................................................. 84 7.2.2 Achieving Regulatory Support.......................................................................................................... 85 7.2.3 Increasing Government Involvement............................................................................................ 85 7.2.4 Increasing Physician Acceptance .................................................................................................... 86

8 References ............................................................................................................................... 87 9 Appendix .................................................................................................................................. 90

LIST OF TABLES Table 1: Philips Lifeline Channel Partners in the U.S. and Canada ............................................................. 28 Table 2: Comparison of FemtoTools Portable Medication Unit (PMU) against other Medication

Compliance Devices .............................................................................................................................................. 36 Table 3: Comparison between the FemtoTools PMU and other Patents embodying weight

sensing for measuring Drug Compliance .................................................................................................... 63 Table 4: Healthcare Expenditure by GDP in 30 OECD Countries in the Year 2000 and 2009 ........ 90 Table 5: Per Capita Healthcare Expenditure in 30 OECD Countries in the Year 2000 and 2009 .. 91 Table 6: Healthcare Expenditure by Provider in 30 OECD Countries in the Year 2009.................... 92 Table 7: Healthcare Expenditure by Function in 30 OECD Countries in the Year 2009.................... 93 Table 8: Healthcare Providers in 30 OECD Countries in the Year 2000 and 2009 .............................. 94 Table 9: Healthcare Resources in 30 OECD Countries in the Year 2000 and 2009 ............................. 95 Table 10: Prevalence of Dementia among 60+ in 30 OECD Countries ...................................................... 96 Table 11: Residential Status of Older People in Europe.................................................................................. 97 Table 12: Measured and Project Population over 65 Years in 30 OECD Countries (2010 thru

2030)........................................................................................................................................................................... 98 Table 13: Projected Change in Old Age Dependency Ratio in 30 OECD Countries between 2009

and 2030................................................................................................................................................................. 100 Table 14: Projected Public Funding on Healthcare as a percentage of GDP in 30 OECD Countries

.................................................................................................................................................................................... 102 Table 15: Estimated Prevalence of Diabetes in 30 OECD Countries, China and India in 2011.... 104 Table 16: Projected Prevalence of Diabetes in 30 OECD Countries, China and India in 2030..... 106 Table 17: Economic Burden of Chronic Disease in the United States (Past and Future)............... 108 Table 18: Prevalence of 4 Major Chronic Diseases in Germany, France, Italy, U.K. and Poland in

2007.......................................................................................................................................................................... 109 Table 19: Prevalence of 4 Major Chronic Diseases in the United States in 2007 .............................. 109 Table 20: Pharmacy-‐Related Waste in the United States in 2011............................................................ 110

LIST OF FIGURES Figure 1: Reimbursement Model for RMT Devices adopted by NHS, U.K.................................................................... 11 Figure 2: Overview of Personal Health System (PHS).......................................................................................................... 23 Figure 3: Smart Tray for Monitoring Drug Compliance – USPTO #6,294,999........................................................... 49 Figure 4: Portable Container for Monitoring Drug Compliance – USPTO #7,928,835 .......................................... 52 Figure 5: Smart Containers for Monitoring Drug Compliance -‐ USPTO #8,069,056 .............................................. 55 Figure 6: Cradle for Smart Containers -‐ USPTO #8,069,056 ............................................................................................. 56 Figure 7: FemtoTools PMU Setup.................................................................................................................................................. 59 Figure 8: FemtoTools PMU Buildup ............................................................................................................................................. 60 Figure 9: Medicpen Drug Handling Apparatus........................................................................................................................ 67 Figure 10: Medicpen Medication Compliance Device .......................................................................................................... 67 Figure 11: Medication Loading in the Interactive Medication ......................................................................................... 69 Figure 12: The Interactive Medication Dispensing Machine -‐ USPTO #6,611,733.................................................. 70 Figure 13: Systems and Apparatuses in the Interactive Medication Dispensing Machine -‐ USPTO

#6,611,733 .................................................................................................................................................................................. 71 Figure 14: Continua Interfaces and Standards........................................................................................................................ 77 Figure 15: Continua Reference Topology .................................................................................................................................. 78 Figure 16: Continua v1.0 Device Interconnectivity Standards......................................................................................... 79 Figure 17: Continua v1.0 WAN Scope.......................................................................................................................................... 80

Executive Summary FemtoTools

Market for Portable Medication Compliance Devices 1

1 Executive Summary The cost of healthcare in all OECD countries is growing faster than the incomes of those who pay for it. Poor medication compliance is one of the leading reasons for spiraling health costs and premature death among the elderly. Poor medication adherence contributed to a loss of US$ 290 billion to the U.S. economy and also resulted in the avoidable death of 125,000 people in the United States in 2009. An improvement in drug adherence can help everybody touched by the healthcare industry. Pharmaceutical companies can gain up to 36% in extra sales by improved adherence only. OECD governments can reduce their public spending on healthcare and the general population can reduce their out-‐of-‐pocket expenses on healthcare. Portable medication compliance devices like the FemtoTools PMU can make a big difference in the quality of life of mobile patients taking regular medication. Unlike large and bulky medication compliance devices, the FemtoTools PMU is a small hand-‐held apparatus, which can be used on the move. Medication compliance devices fall in the domain of Personal Health Systems (PHS). PHS devices have been developed and introduced in the market for quite some time. However, it is only during the past 4-‐5 years that we’ve seen some traction in this field. To understand the market dynamics of PHS devices, we look at the market drivers of these devices and make a good guess at how many of these drivers will actually work. We analyze the market potential by referring to (1) SIMPHS reports published by the European Commission, (2) OECD Demographic Drivers and (3) Healthcare Industry Drivers. There are many variations of medication adherence systems available in the market. These adherence systems address some but not all of the issues surrounding medication compliance. The FemtoTools PMU does not have any serious challenger in the market because it embodies a state of the art design for enforcing drug adherence. The PMU measures drug consumption via a capacitive weight sensor fixed on a state of the art apparatus. The PMU can be used straight out of the box, as it does not need an expert an expert caregiver to load medicines into the PMU. The PMU snaps on to a standard 33mm drug enclosure and provides the means to calibrate the drug dose electronically. At the medication time, the PMU alerts the patient to consume the medication via visual/audio cues and records a missed dose if the patient did not respond to the medication alerts. The drug consumption records are shared with the patient’s caregivers so that appropriate action can be taken. Compared to the FemtoTools PMU, all the other medication compliance devices are either too bulky or too rudimentary to serve any purpose. Hundreds of patents for medication compliance devices have been filed. Among these, some patents have discussed the idea of using weight sensors to measure drug consumption. We analyzed three patents in detail (USPTO #6,294,999, USPTO #7,928,835 and USPTO #8,069,056) to establish whether there was any overlap in the method we’re using to measure drug consumption versus the method being used by any of these patents. Fortunately, we did not come across any claim that could impinge on our patent. The FemtoTools PMU design is unique in the class of drug compliance devices. It is the only portable design that can measure drug consumption in real time via its high-‐resolution capacitive weight sensor. All other designs are either non-‐portable and/or cannot measure drug consumption in real time. The full market exploitation and utilization of PHS requires certification processes ensuring stakeholders that their requirements on critical issues such as patient safety, high quality services and interoperability are satisfied. Individual components such as devices (sensors, medical devices, user interaction devices) and software (communications, DSS, UI) should adhere to respective industry standards and should be certified accordingly. The European Coordination Committee of the Radiological, Electromedical and Healthcare IT Industry (COCIR)

Executive Summary FemtoTools


has reported on certification expectations of primary and secondary stakeholders for Health IT products. Healthcare professionals and vendors have also provided their expectations for certification for PHS offering health monitoring and disease management applications. FDA and CE certification are prerequisites for marketing PHS products in the U.S. and Europe respectively. These certifications address safety issues for both medical devices and software. Additionally, Continua Design Guidelines are recommended to ensure interoperability of devices. There is big need for clinical validation standards addressing the quality of medical devices as well as the interpretation of measurements produced by intelligent processing modules. Interoperability advances beyond interconnection of devices to aspects such as standardization of objective and subjective measurements, and guidance for development of interoperable applications such as behavior management and patient empowerment. Although PHS devices have tremendous potential in improving the quality of medical services, the uptake of these devices has been very slow till now. PHS have failed to gain ground even though most of the technological hurdles in their development have been overcome for several years now. The principal reasons for the slow uptake of PHS devices include: cost, complexity, privacy, perception, interoperability and scalability. While there are good reasons for the slow uptake of these devices, there are better reasons why these forces will not be able to constrain the drive towards development and deployment of PHS devices. By strengthening the user base, achieving regulatory support, increasing government involvement and increasing physician acceptance all of these barriers can be overcome.

Introduction FemtoTools


2 Introduction Poor medication compliance is one of the leading reasons for spiraling health costs and premature death among the elderly. The New England Healthcare Institute reported in its 2009 publication “Thinking Outside the Pillbox” that non-‐adherence with suboptimal prescribing, drug administration, and diagnosis results in as much as $290 billion per year in avoidable medical spending or 13 percent of total U.S. healthcare expenditures. The latest Drug Trend Report by Express Scripts (a leading Pharmacy Benefits Manager in the U.S.) estimates that the loss due to non-‐adherence increased to US$ 317 billion in 2011. The cost of drug non-‐adherence in Europe has not been published as widely. But a recent report by the Friends of Europe indicated that that non-‐adherence to medication contributed to the premature death of 200,000 people and cost €125 billion in 2009. The World Health Organization (WHO) estimates that only 50 percent of patients follow their doctor's prescription. Further, WHO estimates that this figure goes down to 25 percent for elderly patients who are at the maximum risk of death and disability due to medication non-‐compliance. Poor medication compliance is attributed to many reasons. The most common ones are as follows: • High cost of medication • Unpleasant side effects of medicines • Forgetfulness in taking medicines • Difficulty in reordering of medicines • Poor visibility on the benefits of treatment to the healthcare provider • Mix-‐up of different medicines An improvement in drug adherence can help everybody touched by the healthcare industry. Pharmaceutical companies can gain up to 36% in extra sales by improved adherence only. In addition, every time a patient benefits from adhering to a drug regime, the pharmaceutical company gains in equity from the goodwill expressed by the patient and the healthcare provider. Adherence to drug regime helps in keeping both public and private health spending under control. A National Bureau of Economic Research (NBER) paper “Does Prescription Drug Adherence reduce Hospitalizations and Costs” reports that increasing diabetic drug adherence from 50% to 100% reduced the hospital admissions by 23.3% and emergency admissions by 46.2%. In-‐patient care typically cost US$ 2,000/visit and emergency care typically cost US$ 5,000/visit. Any reduction in hospitalization and/or emergency admission amounts to significant savings in healthcare. The government and the healthcare industry have responded to the challenge of non-‐adherence in bits and pieces, but never in a concerted manner. Most of the medication compliance devices available in the market are either too large or bulky to be carried around by a mobile worker or too rudimentary to serve its intended purpose. Even the latest (2010) patents on medication compliance devices, such as patent #7828147 awarded to Inrange Systems for Electronic Medication Management Assistant (EMMA) have resisted the transition to hand-‐held apparatuses, which can be used by mobile workers. Against this backdrop, the FemtoTools Portable Medication Unit (PMU) represents a quantum jump in the technology of medication compliance. If we compare the Inrange EMMA to the FemtoTools PMU, we find that EMMA is like the IBM-‐360 computer and the FemtoTools PMU is like the IPad. While both apparatuses achieve medication compliance by alerting the patient to take medicines at the appropriate time, the PMU achieves medication compliance in a form

Introduction FemtoTools


factor tens of times smaller than EMMA and also provides a framework for extending the capabilities of the device. The FemtoTools PMU is a portable medication compliance device that monitors medicine consumption through a weight sensor featuring sub-‐milliNewton resolution. The PMU alerts the patient to take medication at the prescribed time through visual / audio cues and by triggering a telephonic reminder if the patient did not respond to the earlier alerts. Each time the patient removes the medication for consumption, the high-‐resolution weight sensor computes the remaining drug in the medication container (e.g. pill bottle, vial box, pill organizer). If the patient removes more than the prescribed medication, the PMU alerts the patient to an overdose. If the patient removes less than the prescribed medicine, the PMU alerts the patient to an underdose. Thus, the PMU ensures that the patient is adhering to the medication regime prescribed by its healthcare provider. The PMU is not limited in capability to medication alerts only. Since it measures drug consumption in real time, the PMU sends a reorder request to the nearest pharmacy before the medications run out. The PMU also compiles and shares the patient’s medication compliance reports with the healthcare providers and caregivers. Measuring drug compliance with the FemtoTools PMU is very easy. You can either snap a standard 33mm drug enclosure via the FemtoTools PMU clamp or you can insert the drug enclosure into the FemtoTools PMU enclosure. Since the FemtoTools PMU does not require the patient to transfer drug from the original container to the monitored container, there is no chance of a medication mixup. The PMU has a RFID reader and a Barcode reader to read the drug manufacturer’s information embedded in the medication container. To save the planned medication doses and consumption times, the system control electronics includes a timer and a memory such as an EEPROM. The memory can be programmed using the wireless transmitter. Alternatively, the planned medication doses and consumption times can be saved on a memory card (e.g. flash-‐cards, SD-‐cards) that can be inserted into the memory card reader of the portable system. The EEPROM or memory card may be used to save statistics about the drug consumption, which helps the doctor to optimize the treatment of the patient. Wireless communication using the wireless transmitter can be used to program the EEPROM or memory card as well. The transition to portable medication compliance devices is a necessity due to the fact that many chronic diseases such as type-‐2 diabetes are striking population at a much earlier age than before. The 2012 International Diabetes Federation (IDF) Diabetes Atlas shows that in 2011 there were 40 million confirmed diabetes patients of age 20-‐59 years in 30 OECD countries (Table 15). IDF is predicting that this figure will go up to 44 million patients in the same age group by 2030 (Table 16). Unless steps are taken both to prevent and manage chronic diseases through monitoring and regular medication, it is certain to overwhelm the healthcare budgets of all OECD countries. Portable medication compliance devices like the FemtoTools PMU have the potential to improve the quality of life of millions of people with chronic diseases by connecting them with the pharmacy and the healthcare providers in a closed loop. By periodically reminding the patient to consume its medications and warning against any overdose/underdose, the PMU can improve the prognosis of patients on regular medication.

Competition FemtoTools


4 Competition There are many variations of medication adherence systems available in the market. These adherence systems address some but not all of the issues surrounding medication compliance. Additionally, many medication adherence systems have been invented but not commercialized yet. The FemtoTools PMU design does not have any serious challenger in the market as of now. We can say this confidently because of the following reasons: 1. The current generation of medication compliance systems is mostly designed for retired

people (above 65 years) who do not maintain an active life outside their homes. The current systems can alert the patient to take medication only when they're in close proximity of the medication container. They don't address patients with a mobile lifestyle such as working professionals who take daily medication but also go to the office 5 days a week.

2. Many of these compliance systems are very bulky and need assistance from an expert caregiver to calibrate the device for dispensing the appropriate medicine dose and alert the patient to consume its medication at the prescribed time. Most of the existing systems cannot be used in combination with the original drug container provided by the Pharmacy or Doctor. The drugs have to be transferred into the medication compliance system, which is a source of error since the label (name of the drug, dosage, expiration date) of the original container is not transferred during that process. This results in the danger that the patient is accidentally taking incorrect medicine or incorrect dosage.

3. None of the existing compliance systems are capable of unambiguously measuring drug

removal from the medication container. Existing systems measure drug removal based on the number of times a medication container was opened and closed. This mechanism triggers false alarms and is unable to either prevent an accidental drug underdose or drug overdose.

4. None of the existing compliance systems can automatically issue a medication reorder

request before the medicines run out of stock. Since the existing compliance systems cannot measure drug removal via a weight sensor, it measures drug consumption based on the number of times a medication container was opened. When the open and close counter reaches a specified maximum, a drug reorder request is issued to the pharmacy. Alternatively, the compliance system provides a manual process to initiate drug reorder by pressing a push button at the underside of the medication compliance device.

5. None of the existing systems are capable of interacting with Vital Signs Monitors, Smart

Cards or the EMR (Electronic Medical Records) Cloud Gateway to provide better visibility on the patient’s health record to the healthcare providers and medical researchers.

4.1 Existing Products PHS devices usually span across three sites as illustrated in Figure 2. At the remote patient environment, sensor devices record vital signals together with other context information that are transmitted to user interaction devices. User interaction devices (smart phones, PCs, TV set-‐top-‐boxes, standard phones) and Storage Server host patient-‐friendly applications that support the users for their daily disease management. They also provide communication software that transmits the collected data to a backend server at a medical center. The medical center also



hosts clinical applications that enable healthcare professionals to review the data provided by patients. Figure 2: Overview of Personal Health System (PHS)

Data processing occurs either at the site of acquisition (e.g. with on-‐body electronics) or at the medical centre. The processed and analyzed data are then communicated between various actors, in a loop that is from patient/individual to medical centre, from medical centre that analyzes the acquired data to doctor/hospital and then and back to the patient/individual from either directly through the data acquisition and/or data processing systems itself or through the doctor or the medical centre (e.g. in the form of personalized feedback and guidance to the patient, adjusted treatment via closed loop therapy, control of therapy devices). In the following section, we describe five products that embody some of the principles of PHS devices and share the same domain space as the FemtoTools PMU. At the end of the section, we compare the FemtoTools PMU against the five products. The five medication compliance systems described are as follows: • Vitality GlowCaps • Philips MD • Healthonemed DAP • MedSmart MD2 • Medsignals



4.1.1 Vitality GlowCaps GlowCaps by Vitality is a screw-‐on cap for a standard 33mm drug enclosure. The cap has a multi-‐color LED for signaling a medication reminder, a sensor for measuring the open-‐close cycles of the cap and transmitter to transmit the open-‐close data to a router/hub that is connected to a back office. The cap also has a push button at its underside that can be pushed to reorder medication from a pharmacy.

4.1.1.1 Operation GlowCaps are programmed via a home computer to send pill reminder alerts to the patient. The system works by flashing a light on the GlowCaps at the pill time. If the pill bottle is not opened within the next half-‐hour of pill time, a three-‐tone alert and then a five-‐tone alert is sounded. If the bottle is still not opened, the system makes an automated reminder phone call to the patient or a caregiver. The GlowCaps system compiles adherence data that anyone can be authorized to track. GlowCaps can send a pill order request to the pharmacy automatically or via the push button under the GlowCap. The GlowCaps ecosystem records the number of times the patient opens a drug container. When the open-‐close cycle reaches a specified maximum, the ecosystem sends a drug reorder request to the nearest pharmacy selected by the patient.

4.1.1.2 Cost of Acquisition (Buy) S.No. Particulars Fixed

Cost (US$)

Monthly Recurring Cost (US$)

Cost over 2 Yrs (US$)

1 Modem, Night Lamp, and 2 Glowcaps 99 0 99 2 Additional Glowcaps (2 Nos) 20 0 20 3 Missed Dose Reminders 4 Compliance Monitoring and Reporting 0 15 360

Total Operational Cost over 2 Years 479 Note: Item #3 and #4 are typically charged for monitoring 3 Glowcaps although we've assumed the same expense for 4 Glowcaps. If the patient is taking > 3 different medications, the monitoring fee will correspondingly increase.



4.1.1.3 Pros The GlowCaps medication compliance device is portable and also precludes any medication mix-‐up because the patient only replaces the original drug container cap with GlowCaps to get the system operational. GlowCaps is also economical to use. A patient using 4 GlowCaps runs a bill of only US$479 to achieve medication compliance for 2 yrs.

4.1.1.4 Cons Although GlowCaps is portable, its alerting mechanism is useful only when you’re in close proximity of the GlowCaps medication compliance system. GlowCaps reminds patients to consume their medication through a night lamp/modem that is linked to the AT&T telecommunication infrastructure through a wired connection. The telephonic reminder and automatic drug reorder works only when the GlowCaps fitted medication container is located in close proximity of the night lamp/modem that receives the open-‐close data from the GlowCaps container and transmits this information to a back office for processing. The GlowCaps mechanism of measuring drug consumption is also error prone and simply incapable of measuring a drug overdose or drug underdose. It is a known fact that drug overdose is a serious issue. The Center for Disease Control estimates that accidental overdose of painkillers killed 14,800 patients in the U.S. in 2008.

4.1.1.5 Distribution Channel GlowCaps is retailed by the leading PBMs (Pharmacy Benefits Managers): Express Scripts and Apothecary Shop. PBMs act as an intermediary between the payer and everyone else in the healthcare system. They generally make money through service fees from large customer contracts for processing prescriptions, operating mail-‐order pharmacies, and negotiating with pharmacies and drug makers. Their contracts can include incentives for cutting costs. Some of that savings gets passed on to customers and some of that become their earnings. PBMs are increasingly moving away from being just administrators and working to offer new services that can help save their clients money. These include increasing patient compliance with taking prescribed drugs, helping better manage drug formulations, and aiding drug-‐related decisions with the use of diagnostics and comparative effectiveness. There are also Internet reports that Vitality has partnered with four pharmaceutical manufacturers to distribute their product. Browsing on the Internet, we discovered that Vitality has partnered with Novartis to improve the adherence of their speciality drugs Glivec and Tasigna, which treat Chronic Myeloid Leukemia (CML) and Gastrointestinal Stromal Tumors (GST) respectively. We also discovered that Vitality has partnered with Pfizer to improve the adherence of their cholesterol-‐lowering drug Lipitor.



4.1.2 Philips MD2 The Philips MD2 medication dispenser (PMD) is sold as a part of the Philips Lifeline product. PMD is a reliable and easy to use medication dispensing system that fits on a kitchen counter top. It is perfect for adults who take multiple medications or who have difficulty remembering to take medications as prescribed. The PMD offers these patients peace of mind, convenience, flexibility, control and value. It holds 10-‐40 days of medications in pre-‐filled dosage cups and can dispense up to 6 times per day.

The PMD system consists of six main components: 1. Medication Cups: Medication cups are reusable containers to store pills. Each reusable cup

can store 20-‐25 pills and as many as six cups/doses can be delivered per day. The number of days that can be loaded into the PMD depends on the number of doses taken per day. For example, if a patient consumes 3 doses per day, 20 days’ of medication can be loaded into the dispenser.

2. Dispensing Button: The dispensing button is prominently located at the front of the device. It is conveniently oversized and requires a gentle push for triggering a dose.

3. Medication Reminders: PMD provides medication reminders by sounding an audible alert via a built-‐in speaker. It can also initiate a telephonic reminder by sending a missed dose to a back office for processing.

4. Locking Storage Compartment: The PMD medication storage compartment is located in a locking compartment. The locking compartment keeps the medication safe and in order. It can be preloaded with a maximum of 60 medication cups.

5. Keypad: The keypad is located in the locking compartment to prevent accidental changes or tampering. It is used to calibrate the dosage and reminder service in the device.

6. Battery Backup: The rechargeable battery can keep the PMD operational for up to 18 hrs during a power outage.



4.1.2.1 Operation The PMD dispenses medications in pre-‐filled medication cups at a dispensing schedule chosen by the patient. The medication cups are manually filled with medicines either by the caregiver or by the patient. A loading tray (included in the package) is used to line up empty medication cups and then fill them with the appropriate medication. The filled medication cups are subsequently loaded into the PMD storage compartment. Finally, the medication dosage time is scheduled via the keypad located in the storage compartment. When it’s time for medications, the dispenser provides audible reminders. At the push of the dispensing button, medication is dispensed in the medication cup. If a dosage is missed, the dispenser can trigger a telephonic alert to the patient’s family and caregivers.

4.1.2.2 Cost of Acquisition (Buy) S.No. Component Fixed

Cost (US$)



1 Dispenser $845 0 845 2 Installation $50 0 50 3 Blank Cartridges / Cups (pack of 200) $40 600 4 Missed Dose Reminders 0 0 5 Compliance Monitoring and Reporting $30 720 6 Emergency Alert $38 912

Total Operational Cost over 2 Years 3,127

4.1.2.3 Cost of Acquisition (Lease) S.No. Component Fixed

Cost (US$)

Recurring Cost (US$)


1 Dispenser 0 75 1,800 2 Installation 50 0 50 3 Blank Cartridges / Cups (pack of 200) 40 600 4 Missed Dose Reminders 0 0 5 Compliance Monitoring and Reporting 30 720 6 Emergency Alert 38 912

Total Operational Cost over 2 Years 4,082 Note: 1. Cost of cartridges / cups have been computed assuming the patient draws 4 cups a day, thereby consuming 200 cups in 50 days or 3000 cups in 2 years. 2. In the lease scheme, item # 1, 5, and 6 are billed monthly.

4.1.2.4 Pros The PMD is a robust medication compliance device for people taking multiple medications. More than 700,000 patients in the U.S. and Canada subscribe to Lifeline services. PMD is backed by Philips Healthcare, which is one of the leading companies in the healthcare business. Philips Healthcare recorded sales of €8.9 billion in 2011. The PMD is also supported by trained personnel who are accessible by phone 24 hours a day to answer questions and assist in calibrating the device.



4.1.2.5 Cons PMD has two major drawbacks because of which this device has very limited usefulness. The first major drawback is that the product is not portable by any measure. The device measures 13” x 12” x 14” in size and 12 lbs in weight. Additionally, the device is very power hungry as it consumes 8 watts/hr. The second major drawback of this product is that it has a highly error prone method of calibrating the medication dose of the patient. Since the reusable medication cups are manually filled by transferring the medication from their original packing to the medication cups, there is a big chance of medication mix-‐up in the transferring process. Other drawbacks of this device include the fact that it is very expensive (costs US$ 3,127 to buy and US$ 4,082 to lease) to run and also it needs a landline telecommunications link to provide missed dose reminders.

4.1.2.6 Distribution Channel Philips sells the PMD dispenser as a part of the Lifeline services. The Lifeline services are offered by more than 2,500 health care and community organizations in the U.S. and Canada. It is also distributed through the American Red Cross. The following table lists some of the Lifeline channel partners in the U.S. and Canada. Table 1: Philips Lifeline Channel Partners in the U.S. and Canada S.No. Channel Type Company/Organization Region Country 1 Charitable Hospital Montefiore U.S. United States 2 Healthcare Facilitator Caregiver Partnership U.S. United States 3 Healthcare Facilitator Delta Health Technologies U.S. United States 4 Healthcare Facilitator Medicalert Foundation U.S. United States 5 Mainstream Hospital Palomar Health U.S. United States

6 Mainstream Hospital Northwestern Memorial Hospital U.S. United States

7 Retirement Community Assured Life Association U.S. United States 8 Retirement Community Red Cross U.S. United States 9 Seniors Homecare Provider Wellawaresystems U.S. United States

10 Seniors Homecare Provider Visiting Nurse Association of America U.S. United States

11 Seniors Homecare Provider Homeinstead U.S. United States 12 Mainstream Hospital Victoria General Hospital Canada Canada 13 Mainstream Hospital St. Joseph's Health Center Canada Canada 14 Veterans Health Affairs Royal Canadian Legion Canada Canada



4.1.3 Healthonemed DAP The Healthonemed Dispense-‐a-‐Pill (DAP) medication compliance device is very similar in design to the Philips MD2. This device weighs 10lbs and easily fits on top of a kitchen counter. The DAP device can store 90-‐day medicine supply of up to 8 different types of medication. The device can be programmed to alert the patient to consume medication at the prescribed time. It can also initiate a telephone reminder when the audio/visual alerts have failed to have the desired effect.

4.1.3.1 Operation The DAP device contains 8 separate chambers for storing medicines. These chambers are loaded with medicines at the start of a monitoring cycle. When it’s time for medication, DAP alerts the patient to press the dispensing button to receive the correct medication dose. The DAP uses patented dispensing technology (USPTO # 7,213,721) to sort the correct number of pills for each dose of each medication. The dispensing system selects the correct medicine from each medicine chamber and places them into a dispensing cup for consumption. The DAP plugs into the household electricity and is intended to be run on household electricity. If there is a power outage, the system reverts to a battery backup that can last up to 24 hrs depending on usage. For missed dose reminders, the DAP device needs a landline telecommunication link so that a telephonic reminder can be sent to the patient. The DAP device can dispense medicine pills. For other types of medicines like liquids, injections and topical creams, the patient can set up reminders. These reminders are triggered just like pill reminders.




Cost (US$)



1 Dispenser with 1yr Warranty 995 0 995 2 Extended Warranty for 2 more years 195 0 195 3 Missed Dose Reminders 0 0 4 Compliance Monitoring and Reporting 0 0



Cost (US$)



1 Dispenser with 1yr Warranty 304 55 1,569 2 Extended Warranty for 2 more years 195 0 195 3 Missed Dose Reminders 0 0 4 Compliance Monitoring and Reporting 0 0


4.1.3.4 Pros The DAP device is better than PMD because it eliminates the burden of sorting pills into individual dosage cups. The device automatically selects the correct medicine from each storage chamber and places them into a dispensing cup for consumption. At the outset, it appears that the device is also cheaper than PMD. However, we must add that we haven’t been able to confirm that the reminder and monitoring fee is embedded in the cost of the product. If the reminder and monitoring fee is separately charged, the cost of acquisition will drastically change.

4.1.3.5 Cons The DAP device shares the drawbacks with PMD. The device measures 9.5” x 8” x 8.5” in size and weighs 10 lbs. The system also needs a landline telecommunications link to provide missed dose reminders. Both these attributes make the device unsuitable for a mobile patient. The DAP device is also very new in the market and the company selling the product does not have a long history of making healthcare products. Consequently, the product does not have the same credibility as PMD.

4.1.3.6 Distribution Channel The DAP device can be purchased online through the company's website. We have no information if this product is being retailed through any other channel.



4.1.4 MedSmart MD2 Plus MedSmart MD2 Plus is a user-‐friendly medication compliance device that organizes, stores, reminds and dispenses pills in accordance with prescribed regimens. The dispensing unit contains a circular tray that has cells to organize and store medications to be taken from 1 to 6 times per day. MedSmart MD2 Plus is calibrated through a programming keypad embedded in the device. The device can remind patients to take their pills through visual and audio alarms. When it’s medication time, the device plays the visual and audio alerts for a maximum of 90 minutes. The visual and audio alarms are turned off when the MedSmart unit is turned over and the pills are dispensed. MedSmart MD2 Plus can transmit dispensing history and device information to a secure website via the Event Reporting Docking Base / Modem. It can also trigger telephonic reminder to the patient when a dose is missed. The dispensing history can be accessed by authorized individuals, caregivers, or healthcare professionals.

4.1.4.1 Operation MedSmart MD2 Plus stores medicines in a circular tray that has cells to organize medications to be taken from 1 to 6 times per day. The circular tray is loaded with the correct medication dose by lining up each cell against a guide device (loading guide disc). Once the circular tray is loaded with medication, the device is programmed to play audio/visual alerts and send a telephonic reminder when the alerts haven’t had the intended effect. At the medication time, MedSmart MD2 Plus "beeps" and then rotates to open a compartment revealing the correct pills to take. To turn off the "beeping", the patient picks up the dispenser and pours out the pills. The pill dispenser then automatically resets for the next set of medications.



4.1.4.2 Cost of Acquisition (Buy) S.No. Particulars Fixed

Cost (US$)



1 Dispenser including 2 Medication Trays 790 0 790 2 Additional 2 Medication Trays 25 50 3 Missed Dose Reminders 0 0 4 Compliance Monitoring and Reporting 0 0

Total Operational Cost over 2 Years 840 Note: Additional Medication Trays have been added to factor any breakage during the 2-year period.

4.1.4.3 Pros The MedSmart MD2 Plus is a user-‐friendly compliance device for people taking multiple medications. The device can be easily loaded with the prescribed medication. Programming the device also appears to be a simple task. Although not many people have commented on the product on Amazon, the available reviews suggest that the people are happy with it. MedSmart MD2 Plus is also considerably cheaper than PMD because the reminder and monitoring fee is embedded in the cost of the product.

4.1.4.4 Cons MedSmart MD2 Plus has several drawbacks that limit its usefulness. The first major drawback is that the product is not portable. MedSmart MD2 Plus needs a landline telecommunications link to provide missed dose reminders. Additionally, the device is fairly large in size (8 1/2” x 2 1/2”) and weight (793 gms) to be carried around freely. The second major drawback of this product is that it has a highly error prone method of calibrating the medication dose of the patient. To calibrate the medicine dose, the patient or the caregiver manually loads the circular medication tray with the medication for the week/month. This process introduces a big chance of medication mix-‐up.

4.1.4.5 Distribution Channel MedSmart MD2 Plus can be purchased online from epill.com and other retailers such as Amazon.com and medicalwatches.com. We have no information if this product is being retailed through any other channel.



4.1.5 MedSignals MedSignals is an integrated pill reminder system that alerts the patient via four distinct signals (beep, flashing light, voice, and text) to take the pill at pill time. The device automatically detects the opening of the pillbox and maintains a history of lid openings during the week. MedSignals provides a personalized web page to the patient and authorized health providers showing the patient's monthly pill adherence.

4.1.5.1 Operation The MedSignals multi-‐function dispenser can store up to 4 drugs in separate, programmable compartments, each with associated signals. Each compartment has an associated recessed button that serves two purposes: displaying that pill’s relevant information on the LCD, and programming the compartment. A press of the button sequentially announces and displays usage information for each compartment: (1) time since last lid opening, (2) time until next dose, and (3) number of pills taken in 24 hours. The portable device rests in a cradle, which allows connection through its adapter to electrical power and by telephone line to a host server plugged to the user’s phone. The patient’s medication dose can be programmed manually through the buttons of each medication container or via a web interface. At medication time, MedSignals signals a beep corresponding to the number of pills to be taken and flashes an LED over the bin containing the drug that the patient needs to take. Subsequently, a text message is displayed on the unit’s LCD screen indicating how many pills to take and what instruction or warning to heed. If the time isn’t convenient, the patient can press the Snooze button for a 30-‐minute delay. Or, if the patient wishes to skip the dose, it can press the Snooze button twice to silence it until the next scheduled dose. Each time the patient opens the lid of the medicine compartment, the time is recorded in memory. The device subsequently auto-‐dials a toll-‐free number to upload the patient’s usage data to the database where it is captured in the patient’s secured record. MedSignals can upload the patient’s pill consumption data immediately or at a scheduled interval based on the monitoring scheme selected by the patient. The device can also be removed from its cradle and taken away. During this time, the unit runs on its battery power and records the pill removal times in its memory.



When the device is returned to the cradle, the device makes contact with sensors that automatically begin recharging the batteries and detecting a phone line. It then auto-‐dials a pre-‐programmed 1-‐800 number to transmit lid opening records to the secured database, based on the chosen upload frequency.


Cost (US$)



1 Dispenser 200 0 200 2 Setup 0 3 Daily Missed Dose Reminders 15 360 4 Compliance Monitoring and Reporting 0 0

Total Operational Cost over 2 Years 560


Cost (US$)



1 Dispenser 0 29 348 2 Setup 50 0 50 3 Daily Missed Dose Reminders 0 15 360 4 Compliance Monitoring and Reporting 0 0

Total Operational Cost over 2 Years 758 Note: 1. When the unit is leased, the cost of the Dispenser is amortized over 1 year @ $29 / month. 2. When the unit is leased, there is a one-‐time setup fee of US$ 50. 3. Scheduled monitoring costs US$15 /month. Immediate monitoring costs US$ 30/month.

4.1.5.4 Pros MedSignals is a sleek and portable medication compliance device. It measures 5" x 3" x 1" and easily fits into most purses or pockets. The unit’s large bins can store up to a month’s supply of small tablets and as much as a week of large ones. The device can monitor 4 different drugs. Among all the devices reviewed, only MedSignals has implemented a wireless (Bluetooth) interface to collect data from vital signs monitors, thus allowing it to work as a hub. MedSignals consolidates the data on the patient’s medication behavior and the data from vital signs monitors. It then compiles a set of integrated charts where patients and caregivers can view readings from blood pressure monitors, glucose meters, and precision weight scales in relationship to each other and to the patient’s medication records.

4.1.5.5 Cons Although MedSignals is portable, its alerting mechanism is useful only when you’re in close proximity of the MedSignals medication compliance system. MedSignals uses a fixed line telecommunication link to connect to its back office. This arrangement precludes the device from sending a missed dose telephonic reminder when the patient is mobile and carrying the device with it. The MedSignals mechanism of measuring drug consumption is also error prone and simply incapable of measuring a drug overdose or drug underdose. It is a known fact that drug



overdose is a serious issue. The Center for Disease Control estimates that accidental overdose of painkillers killed 14,800 patients in the U.S. in 2008.

4.1.5.6 Distribution Channel MedSignals can be purchased online through the company’s website and from Amazon.com. We have no information if this product is being retailed through any other channel.



Table 2: Comparison of FemtoTools Portable Medication Unit (PMU) against other Medication Compliance Devices S.No. Feature Component FemtoTools

PMU Vitality Glowcaps

Philips MD2

Healthonemed DAP

MedSmart MD2

Medsignals

Preconfigured Medication Cartridges / Cups N N Y N Y N

1 Device Setup

Universal Clamping / Housing Mechanism Y Y N N N N RFID Reader Y N N N N N Barcode Reader Y N N N N N Wireless Transceivers (802.11, Bluetooth) Y N N N N N Smartcard Reader Y N N N N N

2 Device Calibration

Ethernet Link N Y Y Y N Y Rechargeable Lithium Ion Battery Y N Y Y N Y 3 Power Supply A/C Power Adaptor / Cradle Y N Y Y Y Y USB Y N N N N N 4 Battery Charging Photovoltaic Cells Y N N N N N Pills Y Y Y Y Y Y Liquids Y N N N N N

5 Drug Handling

Powder Y N N N N N Incorrect Medication Y N N N N N Drug Overdose Y N Y Y Y N Drug Underdose Y N Y Y Y N

6 Compliance Management

Medication Mix-‐up Y N N N N N Missed Dose Recording Y Y Y Y Y Y 7 Record Management Remote Event Monitoring Y Y Y Y Y Y Anywhere Notification/Alerting Y N N N N N Biometric Based Emergency Alert Y N N N N N Telephonic Missed Dose Alert Y Y Y Y Y Y Device Non-‐operational Alert Y N Y Y Y Y

8 Event Management

Visual Alarm Y Y Y Y Y Y



S.No. Feature Component FemtoTools PMU

Vitality Glowcaps

Philips MD2

Healthonemed DAP

MedSmart MD2

Medsignals

Audible Alarm Y Y Y Y Y Y Battery Low Alarm Y N Y Y Y Y Digital Clock Y N Y Y Y Y 9 Status Display LCD Readout Y N Y Y Y Y GPS Locator Y N N N N N Proximity Sensor Y N N N N N Temperature Monitor Y N N N N N

10 Sensing

Weight Sensor Y N N N N N 11 Reordering Automatic Medication Reorder Y N N N N N

Childproof Lock Y Y Y Y Y N 12 Access Control Biometric Lock N N N N N N Adaptive Drug Delivery thru Direct Physician Intervention Y N N N N N Software I/F with EMR Cloud to Read/Write Patient Records Y N N N N N

13 Extensibility

Wireless I/F to Capture Vital Stats from Health Monitoring Devices Y N N N Y N