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One step forward and 10 steps back. The downfall of a key US Femtech segment in 2022

Did we just miss the bus?

Dr Siddhartha Dutta, Practice Head-Healthcare

Disclaimer: The views presented in this article are the author’s personal views and do not reflect the position of an organisation, society or company.

The most developed country in the world, the US, recently passed a law that will impact the lives and choices of millions of American women. It will also impact entrepreneurs and start-ups who are currently offering services in the fertility and period-tracking segment in the Femtech space or were planning to enter the market in 2022. In this thought-piece, I want to discuss about the losses this industry segment is about to weather 2022 onwards, in the US alone. I am here to address the issues of data integrity and the right to privacy, irrespective of where the service provider is from and talk about a scenario where other countries might also decide to replicate similar laws. The idea itself is extremely distressing as it completely infringes one’s agency over their bodies, reducing ‘My body my choice’ to a mere lip service. Recent developments in the US have pushed women and their choices back by at least a few decades.

How it all started?

With the implementation of the ‘Abortion laws in the US’, we are about to witness a major disruption in the US Femtech market. I am anticipating a shift or migration of fertility app users in the US who might want to switch to European or other region service providers. The service providers in the US are bound to face losses due to this migration and most of them are start-ups. Women’s rights and women’s bodily autonomy do not matter in the most developed economy in the world, it seems. Femtech started as a revolution a few years back, but now it has been pushed back by decades.

This decision impacts the industry as well. The global women’s health app market was valued at USD2.7 billion in 2021. (Source Grandview research)

Assuming that the US enjoys 50–55% of the market share, are we ready to let go USD1.48–1.62 billion worth of the market segment in 2022? Simple maths, isn’t it?

Since June 2022, every day, multiple companies are pledging their support towards their female employees for abortion-led travel outside of the US on social media platforms including LinkedIn. I have some serious concerns about this ‘Abortion-driven medical tourism’ as it can create many negative implications.

  1. Women opting for such procedures must disclose this to their employers who then decide whether to approve such travel or not. If they are putting such cases on records, don’t they just automatically share the company data with others (HR, payroll, ethics committee, etc). Doesn’t the privacy of the person get compromised?

  2. I am also concerned that whether the same person is visiting a gynaecologist in the US (assuming she is under insurance cover), there are high chances that going forward all the pregnancies will be tracked by the federal government through insurance companies unless the woman is ready to pay out-of-pocket once she finds out that she is pregnant?

In both the scenarios, do women face the law of the state for terminating their pregnancies (in case they want to), even if they are moving out of state. As per the company policy (those who sponsor employees to travel), there will still be records of such events.

  1. A third scenario is where women use fertility trackers or health trackers to regularly update their menstrual cycle on such apps. What if they stop updating the same due to pregnancy and plan an abortion? Won’t the discontinuity of data updates on these apps raise suspicion and get them in trouble with the state or the federal government through the service providers?

Big Brother is watching you…are you tracking your fertility?

Period tracker apps such as Flo and Clue (most popular in the US) have more than 55 million users combined (Flo claims to have 230 million global users on its website). Flo charges USD9.99 for a monthly subscription, a 3-month subscription for USD19.99, a 6-month subscription for USD39.99 and 1-year subscription for USD49.99. Considering that Flo has 30 million users based out of the US and assuming ~50% of these users opt for an annual subscription, isn’t the company then headed towards a loss of close to USD500-750 million in the coming days (from annual subscribers)?

Let us also consider the second most popular period tracker app Clue that charges USD39.99 per user for an annual subscription. Considering that 25 million US users are opting for Clue and 50% are currently taking an annual subscription. Then, a rough estimate could indicate that this company is headed towards a loss close to USD500 million. Clue, a Berlin-based company, had recently assured its users that there will be complete data privacy. Is this assurance from Clue fool proof? Let us look at the US scenario from a legal perspective.

Source: Clue’s Twitter handle (June 2022)

I would like to quote a section published (28 June 2022) in ‘The Guardian’: “The fact that GDPR applies is not that relevant in this case. When it comes to a legitimate legal request from the US authorities, European companies usually comply. Also, a European company may be hosting data outside the EU, making it subject to different legal frameworks and cross-border agreements,” by Lucie Audibert. Lucie is a lawyer at Privacy International, a global NGO that conducts research studies, litigates and advocates against abuses of technology and data by governments and corporations.

Who wins, who loses?

The fertility segment of Femtech loses the most. Clue, Cycle, Ovia, Flo, Fertility Friend and every other service provider associated with fertility and reproductive health are set to be impacted the most by one judgement. Users will have no choice but to opt out or hide data. The losses will mount up to billions of dollars in the US along with low confidence among the industry. The fertility segment has been pushed back by decades and there is no immediate solution. Is this not a human rights issue? Can we just ignore it? Or can we happily lead double lives? Now that is something we need to think about.



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