Healthcare activities of Big Tech and retail players in Q3 2023

Activities refer to initiatives by the above companies across industries under SPEEDA Edge’s Health & Wellness and Pharma & Life Sciences verticals

Source: Compiled by SPEEDA Edge

Key takeaways

• Adoption of GenAI in healthcare continues to grow, Big Tech competition heats up as Amazon makes major moves. While Alphabet and Microsoft continue to make steady progress in the healthcare GenAI space through their product offerings, Amazon’s consolidation through the launch of AWS HealthScribe (a HIPAA-compliant service that enables healthcare software vendors to build clinical applications that automatically generate clinical notes by analyzing patient-clinician conversations) and its strategic investment in Anthropic demonstrate intensifying competition in this space.

• Alphabet continued to lead healthcare activity. The tech giant accounted for ~32% of all Big Tech activity and nearly a quarter of all healthcare activity. Primary care remained the focus, with nearly 80% of its activities concentrated in the area. However, within primary care, Alphabet broadened its focus to improve preventive healthcare, hospital management and interoperability, AI drug discovery, and clinical decision support.

• Overall activity of retailers slowed in Q3 2023, accounting for 15% (down from 32% during Q2 2023). Walgreens continued its commitment to value-based care. Following a landmark investment in VillageMD, Walgreens announced its latest strategic partnership with Pearl Health to bring value-based primary care to communities across the country.

• No major acquisitions during the quarter, but reports suggest a multi-billion dollar move by Walmart is on the cards. The retail giant has shown interest in acquiring a majority stake in ChenMed—a chain of primary care clinics focused on health for older adults. If the deal goes through, it would be Walmart's largest healthcare acquisition to date. 

• Investment activity remained low. Alphabet and Intel, through their corporate venture capital arms, were the most active investors this quarter. Retail giants remained cautious amid uncertain economic conditions, making no investments during the quarter.

Number of activities by company

Acquisitions: Walmart rumored to make its biggest healthcare acquisition

Partnerships: Adoption of GenAI in healthcare continued to rise

Big Tech

• Alphabet’s focus on advancing GenAI into healthcare continued. During the quarter, Alphabet entered several partnerships with CareCloud, Hackensack Meridian Health, and HCA Healthcare to integrate Google Cloud's GenAI tools to enhance efficiencies in clinical operations and improve patient experiences. In addition, Google Cloud entered a partnership with Grifols to support the development of new medicines using the tech giant’s AI capabilities.

• Microsoft leveraged OpenAI links to ease administrative burdens in healthcare sector. The Big Tech giant leveraged its Azure OpenAI Service to enter a partnership with Mercy that aims to deploy GenAI-powered communication tools to help patients better understand their lab results and to recommend follow-up actions during initial patient calls. In addition, Microsoft partnered with Mayo Clinic to enable the latter to become one the first healthcare organizations to deploy Microsoft 365 Copilot to automate time-consuming administrative tasks. Further collaborations include 1) partnering with Teladoc to integrate its Azure OpenAI Service and its conversational AI platform Nuance to automate the creation of clinical documentation and 2) expanding its partnership with electronic health record (EHR) vendor Epic to integrate similar features.

• Microsoft is also supporting drug discovery efforts through its cloud service. The company is working with AI-powered pathology computing platform Paige to provide its cloud computing infrastructure to develop an image-based AI model configured with billions of parameters to capture the intricate nuances of cancer. These could be applied to new oncology and pathology use cases and deployed to hospitals globally via Azure Cloud.

• Oracle’s Cerna partnered with medical clinics to install EHR systems. This included partnerships with Vandalia Health and Universal Health Services to extend the system across their networks to enable more informed care decisions and improve patient safety practices. Oracle also tied up with 1) Syneos Health to leverage the Oracle Cerner Learning Health Network and elements of Oracle’s suite of study startup solutions to close gaps in clinical trial recruitment and with 2) TeleVox to deploy Oracle Cloud Infrastructure to provide customers easy access to TeleVox’s patient engagement solutions.

• Amazon expands its Clinic marketplace with a partnership following a delayed launch. The e-commerce giant accepted virtual care provider Curai Health on Amazon Clinic’s marketplace to provide message-based care. Amazon established the partnership following the nationwide launch of its virtual health platform Amazon Clinic, which was delayed several times owing to privacy concerns. In addition, Amazon partnered with Maven Clinic to provide Amazon employees access to its fertility and family-building support services.

Summary of Big Tech players’ partnerships in Q3 2023

Source: Compiled by SPEEDA Edge

Not illustrated is IBM Consulting’s collaboration with Microsoft to help companies accelerate the adoption of GenAI

Source: Compiled by SPEEDA Edge

Retail

• CVS Caremark partnered with GoodRx, aiming to reduce out-of-pocket prescription costs. The initiative came with the launch of the Caremark Cost Saver program. Through this program, Caremark members with commercial insurance would be provided automatic access to GoodRx’s discounted prescription pricing on generic medications when available. In addition, CVS Health partnered with Viome Life Sciences to sell its gut testing kits in more than 200 CVS locations across the US. It would be the first-ever gut test available in the national retail chain both online and in-store.

• Walgreens announced its partnership with Pearl Health to accelerate the expansion of value-based care in collaboration with community-based primary care physicians. The partnership opens an additional channel that will enhance the retail giant’s reach whilst offering a broader range of solutions to providers and health systems. In addition, Walgreens and VillageMD continued the expansion of the full-service primary care model with the opening of the first Village Medical at Walgreens’ primary care practice in Chicago.

• Best Buy extends partnership with Geisinger to improve at-home chronic disease management, building on a July 2022 agreement between the duo in which Best Buy provided specially trained Geek Squad agents to deliver, install, and activate remote care management devices for Geisinger patients. Through the expanded partnership, they will provide advanced technology and logistics services to empower patients and help healthcare organizations manage their own at-home chronic disease management programs.

Summary of retail players’ partnerships in Q3 2023

Source: Compiled by SPEEDA Edge

Source: Compiled by SPEEDA Edge

Investments: Retailers step back; Amazon–Anthropic deal could open up new healthcare use cases

• Amazon’s USD 4 billion deal with Anthropic stands out. The investment is part of a strategic collaboration between the companies to bring together their respective technologies and expertise in GenAI. The move also underscores Amazon’s aggressive push into the AI space as it looks to keep pace with its Big Tech rivals. Among other things, Amazon aims to open up use cases such as drug discovery for healthcare by making Anthropic’s model available through Bedrock, its generative AI service.

• Alphabet, through its venture capital arm Google Ventures (GV), continued its investment spree. During the quarter, GV co-led a USD 210 million private financing round of Nimbus Therapeutics, a clinical-stage company that designs and develops breakthrough medicines through its computational drug discovery engine. The funds will be used to advance Nimbus Therapeutics' pipeline of drugs for various disorders. GV also led Midi Health’s USD 25 million Series A round, which will be used to expand the latter’s operations across the US by January 2024 and to launch additional partnerships with major hospital systems and employers.

• Intel returned to the mix with two notable investments during the quarter. After sitting on the sidelines in the second quarter, Intel Capital led a USD 17 million Series A round for lab-grade at-home health testing startup SiPhox Health to enable team expansion as SiPhox Health worked toward FDA clearance for its SiPhox Home platform. In addition, Intel Capital participated in a USD 8.9 million investment round of senior living technology provider K4Connect to support the adoption of its technology.

Source: Compiled by SPEEDA Edge

Appendix

Large incumbents in primary care