Israeli Pharma Stocks Will Benefit From Google Health

Google (GOOG), the search behemoth, is definitely working on something large in the healthcare space. I’ve been following the healthcare buzz on the Official Google Blog. Last week, Dr. Roni Zeiger, Google’s Product Manager for Healthcare was surprisingly very chatty about Google’s upcoming plans for Healthcare.

It’s been my experience that the success of new forays are very much correlated to the quality of the managers of the new product. Clearly, says Zeiger, “patients get better care when they are more informed about generally accepted standards of care, and know more when talking to their doctors.” Zeiger, an internist and specialist in Medical Informatics, is well-regarded in the Clinical Information industry.

I dug up a software package that Zeiger authored, called the 5-Minute Clinical Consult. The program provides an easy-to-use and rapid information retrieval for clinicians to access diagnosis, treatment, and medications for more than 600 diseases and disorders.

Along with Zeiger, Google Health will be spearheaded by VP Engineering or “Architect,” Adam Bosworth. It is worth checking out his Wikipedia profile as well as what he said recently about Google’s Health efforts. He is considered one of the pioneers of XML technology. He has had stints with BEA Systems Inc. (BEAS), Microsoft (MSFT), and Borland (BORL), and is a heavy hitter.

Let’s look at what the players themselves say about Google’s efforts:

Zeiger: Patients themselves should be able to input, “information such as age, gender or medications, learn about recommended screening tests and other preventive measures, or about harmful drug interactions.”

Bosworth: [Google’s focus is to] 1) better organize, and make medical
information accessible, 2) enable patients to “better coordinate and manage their own health
information,” and 3) “connect people with similar health interests.”

In short, it appears that Google is going to create a social network for consumers to manage their own medical profiles (not unlike how Guy Kawasaki manages his LinkedIn profile) and connect with others with similar profiles. I assume this is most useful in acute or chronic disease scenarios. Given Zeiger’s expertise, it also appears that doctors will be able to use Google Health for diagnostic purposes, in order to get a quick view of patient history (albeit from the patient's point of view), and perhaps input notes from the clinical visit.

This sounds strikingly similar to the aspirations HLTH Corporation (HLTH) (formally, Emdeon, Healtheon and WebMD) once had. This company now exists in 4 segments:

WebMD Health Corp (WBMD): a holding company for public and private online medical portals.

VIPS: deals with healthcare data management, analytics and provides decision support to payers.

Porex: deals in plastic medical products.

EBS: provides business automation for healthcare payers and providers

What does this mean for companies like TEVA (TEVA)? With better informed consumers and new marketing channels (both to consumer and to the medical provider) opening up, it looks like TEVA, and other generic drug manufacturers will have new revenue opportunities if Google can:

garner significant traffic on Google Health

get users to input their own health histories

co-opt Adsense into being able to monetize disease/condition profiling (not just keywords)

While it sounds kind of gross, if you were suffering from MS, wouldn’t you want to know that TEVA has a world-class product that was perfect for you, and that also fit your personal health profile? Wouldn’t you get better medical care knowing that you can ask your physician about all of your options?

I think Google is onto something. It will be interesting to watch the development of Google Health and see how it plays out.

Disclosure: Author is personally long TEVA and clients may also be long TEVA.