Digital health CEO: One challenge in selling to Big Pharma is “Who else is doing it?”

There’s getting patients to take their medications, and then there’s convincing big pharmaceutical companies that they should invest in innovative ways to try to get patients to take their medications.

The latter, apparently, is more complicated than it sounds. That’s one thing I gleaned from a conversation with Tom Kottler, the CEO of a digital health company called HealthPrize.

HealthPrize’s medication adherence platform is used by pharmaceutical companies in an effort to recover some of the $564 billion HealthPrize estimates they lose because of nonadherence. The program allows drugmakers to reward patients who take their medications, have their prescriptions refilled and engage in educational quizzes and games with gift cards and other prizes.

Kottler said that four of the 20 biggest pharmaceutical companies are running HealthPrize programs, and an announcement about a pilot program with a large pharmacy benefit member is forthcoming. By the end of the year, he expects to have 40,000 to 50,000 people using the program.

But there’s one big challenge the company hasn’t yet been able to tackle, and that’s getting a top 10 Big Pharma as a customer. Three of them have expressed serious interest, he said, but they’re all asking the same question: “Who else is doing it?”

“None of them want to be first, but they don’t want to be last either,” he said.

There are plenty of innovative thinkers in pharma who are willing to take a risk and try innovative things, he said, but doing that in an industry that’s as serious and heavily regulated as pharma takes longer than it might in other places. But he thinks the industry is turning a corner. For starters, U.S. pharmaceutical companies’ budget allocations for patient adherence initiatives have jumped 281 percent since 2009, according to a survey by Cutting Edge Information.

“Pharma knows physicians really well, and they have for the longest period of time viewed physicians as their customers,” he said. “They’re just starting to understand they have two customers of equal value, but they don’t know anything about how to get patients to take their medication.”

Another part of the resistance probably comes from the industry’s awareness of its “big, bad Big Pharma” reputation. “They’re concerned about the perception of paying people to take their medicines,” he said, even though the rewards are only a fraction of what they offer in patient assistant programs.

He hopes to bring one of the top 10 biggest pharmaceutical companies on board this year, and releasing fleshed out pilot data in the coming months should help.

“One thing we’re finding that our platform allows brands to do is to learn about consumers,” he said. “We didn’t know it would be as important in generating data and insights.”

He also thinks the two-and-a-half-year-old company could hit another huge milestone this year by breaking even and positioning itself to turn a profit in 2014. In the meantime, he’s raising a $1.5 million round that should close by the end of the quarter.

There are tons of pill dispensers and apps aimed at boosting patient adherence. HealthPrize’s platform takes those tracking mechanisms and combines them with educational materials, certain elements of games and prizes.

But Kottler is hesitant to put HealthPrize in the “healthcare gaming” bucket. Gamification and gaming are different, he noted. The former involves incorporating certain elements of games in everyday life and is used so often that people don’t even notice it. LinkedIn uses it, for example, when it encourages users to complete their profile by showing a chart of how their profile completeness compares to others in their network.

The company will take that strategy and pursue different distribution channels, like health plans and pharmacy benefit managers, with the goal of improving adherence.

“If patients are more adherent, hospitals, employers, PBMs, everybody gains some benefit,” he said.