Fixes are needed to prevent failure in the brain health tech market – STAT

The world is in the midst an escalating global crisis of brain health, by which we mean all mental health and neurological disorders across the lifespan, from autism and schizophrenia to Alzheimer’s and Parkinson’s.

The existing workforce of health care providers cannot keep up with this brain health epidemic, and existing approaches to care are woefully inadequate. Screening is rarely implemented. Diagnosis is often subjective. Treatment is largely trial and error.

Brain health technologies are key to addressing the global brain health crisis. These technologies span the “omics,” digital therapeutics, artificial intelligence, robotics, and devices. They aim to improve the entire spectrum of care from prevention to screening, diagnosis, treatment, and continuing care. They can facilitate scale and equity (think apps and telehealth) along with personalization (think genetics).

Although the field of brain health technologies is booming today, it could easily implode.

Gartner’s “hype cycle” is a graphical depiction of a common pattern for new technologies. It has five phases: Technology Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity. We believe the hype cycle is relevant to the brain health technology field and offers a cautionary tale for it.

We are seeing signs of the Peak of Inflated Expectations in brain health technology. Midway through 2021, a record-setting $1.9 billion had been poured into brain-health-related startups. There have likewise been soaring valuations for early VC-backed companies and a record number of so-called unicorn companies — those valued at more than $1 billion — in the field. These ballooning valuations often contradict underlying fundamental problems brain health companies face.

These fad-like trends distract from deeper issues that numerous companies are facing. Some have deemed the field of digital brain health technology as the “lawless wild west,” citing concerns around false claims about health benefits and poor data privacy management practices. There is a common disconnect between commercially successful apps and those that have been clinically validated, leaving consumers and clinicians to differentiate which technologies will work and which are merely hype. These issues are worrisome for the sustainability of the brain health technology field.

There is significant risk that the field will enter the Trough of Disillusionment, which portends chilled interest from investors. This is especially problematic because the field needs decades of sustained growth, investment, and innovation to overcome the current brain health crisis. Market failure in the brain health technology space would be disastrous. Every company failure means the loss of potentially valuable products, services, and novel intellectual property that could help patients.

Given these dynamics, conventional venture capital may be suboptimal for the brain health technology field.