Apr 2, 2015 · 4 minutes

Two Boston companies have made news over the past couple of days in a rapidly-growing space: The intersection between technology-focused startups and the biotech and pharmaceuticals industries.

Both MediSafe and ZappRx are leveraging new software innovations to help patients with complex medication schedules and those who need to fight diseases in novel ways. While money is pouring into the biotech industry - for instance, unlike tech IPOs, 2015 has not seen any slowdown of biotech and pharma companies hitting the public markets, it’s safe to say that the same funding opportunities haven’t existed for companies at the end of the supply chain.

But that may be changing. The reason? All the data that is being collected by companies in the medication tracking and delivery space is becoming very, very valuable to everyone from the drug makers themselves to the massive health insurance industry.

MediSafe is a medication management platform that allows families to monitor older (and younger) family members to make sure they are following their drug schedules. The company announced yesterday that it has started to integrate biofeedback into its med tracking software service that can show patients, in real-time, how taking their medication is affecting their health. Using data points such as glucose level and blood pressure that can now be tracked using mobile devices, the company is not only keeping with its mission of making sure its 1.5 million users are staying on track with their medication schedules (and showing them the negative effects of missing a treatment).

“For many chronic conditions, MediSafe offers patients early feedback that their efforts are paying off, motivating them to continue taking their medications and undertake other healthy behaviors and lifestyle changes,” said Jon Michaeli, the company’s executive VP of marketing and business development in a statement.

For MediSafe, however, the real value in the new software feature is that the company is now able to gather a treasure trove of data on just the effectiveness of drug treatments, which they can anonymize and sell back to Big Pharma.

ZappRx is doing something similar, but in the specialty medications space. And like MediSafe, ZappRx shows that the biotech and pharma industries are taking note of what the small tech operators are doing.

Today, ZappRx announced it has received $5.6 million in new funding from GlaxoSmithKline's new venture arm SR One, and Atlas Venture (the life sciences VC firm, not the tech startup one that split from the firm and is seeking a new name). Additionally, the company revealed a long undisclosed partnership with biopharma company Zafgen, as well as another major partnership that it cannot reveal yet.

While ZappRx hasn't raised anything approaching the gaudy investment numbers you will often see attached to biotech companies, the company has raised a total of $8.8 million for what is currently a niche space but has the potential to be lucrative in the long term.

Often, the cost of specialty drugs can be in the thousands of dollars per month range and can even surpass $100,000 per year for some medications. Last year, specialty pharmaceuticals -- medications that fight rare diseases through often have complex delivery systems or multi-part preparation processes -- accounted for 25 percent of all drug spending. By 2019, that number is expected to be 50 percent of drug spend, a burden which will largely fall on insurance companies.

ZappRx’s platform makes it easier for patients with life-threatening diseases who need access to specialty drugs which oftentimes pharmacies don’t carry due to the high overhead costs.

With new funding and major partnerships, the company has positioned itself in the right place at the right time as the worlds of Big Data and Big Pharma are colliding to create new opportunities for shrewd entrepreneurs. According to founder and chief executive Zoë Barry, the company will be doubling down on innovating its technology and adding many new employees who have defected from Google's Cambridge office -- many of whom helped build the tech giant's airline tracking and flight deal finding capabilities as part of the acquired ITA Software group.

"We are a high tech company applied to hardcore life sciences," Barry said.

While improving the lives of the people living with rare diseases is part of ZappRx's mission, the company's bottom line relies on the data it too is collecting. Because specialty medications are so niche, there is not a lot of data on their usage, availability, and success rates. However, through its services, ZappRx has collected quite possibly the greatest data set of specialty drug usage, ever.

And that is where ZappRx is making money. It sells the data, which is often sold by the pharmacies; specifically, because due to the specialty nature of the drugs on its platform, ZappRx has specific insight into the the fulfillment data on medications. "Everything it takes to get a drug to a patient, and where the bottlenecks are, with our data, we can basically apply a lens of visibility to that process," explained Barry.

As prescription drugs become a greater pain point and financial burden, the data that ZappRx and MediSafe have access to will be of great value to both the pharmaceutical and insurance industries. It may also be the lucrative pathway to profitability for the startups taking advantage of the current opportunity.

[illustration by Hallie Bateman]