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Ambrosia — a New York-based startup that filled consumers’ veins with "young blood" with claims that the method could beat back aging — shutits doors after a tumultuous 2019. The FDA raised concerns about t he lack of clinical benefits of procedures like Ambrosia’s in February, and the startup pressed pause on offering its procedure that same month. 
But the hiatus didn’t last long: It was up and running in San Francisco and Tampa by June. Now, Ambrosia is closed for good, but its founder Jesse Karmazin has launched a new firm called Ivy Plasma — which will offer a near-identical procedure, but transfusion donors won’t necessarily be "young."
Ambrosia is the latest embattled healthcare firm to signal that greater regulatory enforcement is needed to keep startups in check. Flashy startups like women’s health prescription service Nurx and microbiome-testing company uBiome have gotten tangled up in scandals recently. And like Ambrosia, uBiome’s operations screeched to a halt after it was forced to close following an FBI investigation earlier this summer.
But we’ve seen a push within the healthcare industry to clamp down on the shady and opaque practices of digital health startups. Pharmacy benefits managers Express Scripts and CVS Caremark have both released platforms to catalog effective digital solutions — like digital therapeutics — to steer payers toward investing in effective products that improve health outcomes.
And we saw MDisrupt break onto the scene lask week — a consultancy venture aiming to determine whether healthcare startups have the evidence to back up their scientific claims. These efforts will likely come as a relief, considering digital health products are seldom put through rigorous studies to determine efficacy.
The bigger picture: Providers and payers are taking a more active role in healthcare funding — so startups touting clinical efficacy could be more likely to be the recipients of their cash.
Hospitals shoveled $1.3 billion into healthcare startups in 2018 — almost triple the amount recorded five years prior. And we’ve seen health insurers flexing their VC muscles recently, too — pouring capital into a range of healthcare startups.
It’s likely providers and payers will want to invest in companies that can demonstrate that their products can improve outcomes. And since we expect provider- and payer-led funding rounds to tick up, it should up the pressure for startups to prove that their products and services live up to their scientific claims — or risk being left high and dry for funding.
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Source: Business Insider – zlarock@businessinsider.com (Zoë LaRock)