The world of digital health could be entering a new phase this year, one in which execution matters as much as innovation, according to leaders at private and venture capital firm Breyer Capital.
Here are three industry trends that they believe will shape market dynamics in 2026.
The limitations of biotechnology are moving from biology to logistics
This year could mark a turning point in healthcare innovation where the biggest challenges are no longer scientific but practical, said Bret Bostwick, who joined Breyer as a risk advisor last month.
“In the past, the reason we were stuck in certain therapeutic areas was because the biology was not advanced enough for us to take the next step. We increasingly understand the biology very well, but we are limited by logistical barriers,” he said.
With the science largely established, the real opportunity is in technologies that make therapies easier to administer, cheaper to produce and easier to scale, Bostwick said.
A key opportunity is to move from ex vivo to in vivo approaches in cell engineering, he noted. This means that instead of removing a patient’s cells, engineering them in a lab for weeks, and then reinfusing them, doctors could deliver therapies directly into the body that reprogram the cells on the spot.
Bottom-up adoption
Healthcare startups’ go-to-market strategies are shifting from traditional enterprise sales to direct-to-doctor and direct-to-consumer models, said Morgan Cheatham, partner and head of healthcare and life sciences at Breyer.
Instead of navigating slow and complex procurement processes in health systems, companies are increasingly reaching users through product-based experiences that are adopted first by physicians and then extended to all institutions.
“I’ll use OpenEvidence as an example, but there are others: We’re starting to see upward movements in which companies are marketing compelling products that meet the needs of healthcare and life sciences users in a more accessible format,” Cheatham said.
The rise of AI is also helping startups create and launch products more quickly and interact directly with doctors and scientists, he added.
While this approach can accelerate adoption from the start, startups will eventually need to reintegrate into enterprise systems like EHR and claims platforms.
Consolidation is coming
The explosion of AI startups in the healthcare sector has created a saturated market, and Cheatham expects this year to be a big one for mergers and acquisitions, especially when it comes to software.
Many companies will have to face a strategic question: can they become a platform or category leader, or are they stuck in a niche that will be acquired or marginalized?
“It’s roll or be rolled,” Cheatham declared.
As healthcare organizations are reevaluating their technology stacks and AI capabilities, they increasingly prefer fewer, more integrated platforms rather than fragmented tools, Cheatham said. He believes that change will speed up trading and reveal which companies emerge as real winners.
Photo: MicroStockHub, Getty Images