Next Steps for Digital Therapeutics Market: Global Leaders Share Views on Permanency and Adoption

Megan Coder, Pharm.D., M.B.A.

All new industries face important questions, and the digital therapeutics (DTx) industry is no exception: Are these products a permanent fixture in healthcare or just a passing fad? What indicates a legitimate DTx therapy? Will patients and clinicians directly benefit from digital therapeutics?

The future of healthcare will unquestionably include products that generate and deliver medical interventions directly to patients using software to treat, manage, and prevent diseases and disorders.

Due to their critical functionality, digital therapeutics must be clinically validated to ensure safety and effectiveness, and are subject to greater clinical, security, and regulatory scrutiny than general digital health apps and products.

Looking to 2021 and Beyond

The sooner patients, clinicians, and payers want to see these products scaled and integrated into healthcare systems, the more urgently these four critical obstacles must be addressed and overcome:

Policymakers

First, policymakers require a common framework to categorize DTx products based on intended use and risk. However, since nations often layer-in additional country-specific clinical and economic outcome requirements, there are no globally consistent pathways to market.

“Policymakers should aim for evaluation frameworks that enable companies to consistently bring DTx products to market and be reimbursed accordingly for the therapeutic interventions they deliver,” shared Jim O’Donoghue, president of S3 Connected Health. “We envisage a future where DTx won't need to be classified as digital solutions but rather, they will sit alongside a range of therapeutic treatment options available within healthcare systems and across the provision of care.”

Payers

Second, payers require cohesive frameworks to evaluate and cover DTx products. Without consistent requirements of clinical trial data, real-world outcomes, and data governance requirements, DTx product scalability across local, regional, and national systems will be greatly limited, potentially depriving entire populations of access to new therapies.

“In the United States, insurers such as Express Scripts, CVS Health, and Cigna are developing digital health formularies, and in Europe and Asia, national governments are creating access pathways, but there are still gaps for major populations that could benefit from DTx,” explained Owen McCarthy, president and co-founder of MedRhythms. “Finding ways for additional insurers to provide coverage will benefit the entire system, improve patient and population-level clinical outcomes, and decrease the overall economic burden of medical conditions.”

Clinicians

Clinicians face steep learning curves and therefore require clinical guidelines related to the appropriate use of DTx products, technical training for authorizing and optimizing product use, and support to integrate digital therapeutics into practice settings and clinical workflows.

“Digital therapeutics are helping meet healthcare demand that has long been higher than supply even before the pandemic and reduce barriers that often prevent people from seeking care in traditional settings,” said Ken Cahill, CEO, SilverCloud Health. “It is now time for the power and clinical outcomes of these proven programs to be realized, and our hope is for evidence standards to be developed that enable the broad adoption of truly effective, safe, and equitable tools across global healthcare systems.”

Patients

For patients to directly benefit from digital therapeutics, they typically require access to these products through a clinical decision maker. Although the technology platforms that enable DTx product scalability and patient access are readily available, these resources will continue to be underutilized until clinicians, employers, and healthcare payors grant patient and population-level access.

“DTx products deliver personalized interventions for medical conditions, so unlike over-the-counter products or smartphone apps, patients must receive DTx access through their care teams to reap the benefits of these targeted therapies,” shared Sean Kang, Welt, Corp. “Once access is granted, it is important for patients to develop a clear understanding of what to expect, how to use the product, and benefit most from their therapy.”

Building on a Strong 2020

For how much work still needs to be done to enable efficient patient access to digital therapeutics, significant progress was made across the industry in 2020.

Increased utilization

COVID-19 provided a heightened awareness of how digital therapeutics can help patients manage their chronic conditions within home settings, in addition to improving the efficiency of mental health services and extending effective treatment to the millions of individuals who are otherwise unable to access treatment.

In 2020, for example, Kaia Health saw a six-fold year-over-year growth for their MSK/COPD product. Freespira saw demand for their panic attack and PTSD treatments increase significantly, leading to a 30% year-over-year growth. And Welldoc’s BlueStar solution for the management of diabetes witnessed nearly 80% and 60% in usage of key functions, such as the recording of blood glucose and blood pressure entries respectively. Additionally, the 180% increase in SmartVisit Reports sent from BlueStar to the patients’ healthcare providers signals the importance of communication between patients and providers to align with the best treatment options while being physically distanced.

Demonstrated outcomes

Since all DTx products must publish peer-reviewed research to demonstrate product efficacy and safety, in 2020, Akili Interactive, Big Health, Cognoa, DarioHealth, Freespira, Pear Therapeutics, Propeller, SilverCloud, and Welldoc released new data related to DTx product clinical or economic outcomes, while Better Therapeutics, HERINGS, and JOGO Health released data for products under development.

Regulatory oversight

Regulatory pathways and product clearances significantly grew in 2020. In the United States, the FDA granted clearances to DTx products for ADHD (Akili Interactive), irritable bowel syndrome (Mahana Therapeutics), chronic insomnia (Pear Therapeutics), and long-acting insulin support (Welldoc), in addition to a breakthrough designation for chronic stroke (MedRhythms). DTx devices for depression and alcohol use disorder (Orexo) and schizophrenia (Pear Therapeutics) gained market access through the FDA’s Emergency Use Authorization for the duration of the COVID-19 public health emergency.

In Europe, DTx products for ADHD (Akili Interactive), anxiety (Big Health), and oncology (Voluntis) received CE Marking. Additionally, Germany and Belgium implemented a national framework for the reimbursement of digital health applications, reaching more than 75 million and 11 million citizens, respectively. In Asia, new regulatory pathways for digital therapeutics were developed in South Korean and Japan.

Investment landscape

Investors continue to see long-term value in DTx companies. Kaiku Health was acquired by Elekta. Big Health closed a Series B round of $39 million, Freespira raised $10 million, Kaia Health closed $26 million in Series B funding, Lucine closed a €5.5 million seed funding round, S-Alpha Therapeutics received nearly $3 million in seed funding, and SilverCloud raised $16 million in Series B funding. Industry partnerships were also on the rise, as demonstrated by BehaVR, Boehringer Ingelheim, Happify Health, Sumitomo Dainippon Pharma, and Voluntis.

Next Step: Collaboration

COVID-19 shined a light on the power of technology to improve care now and in the future. Tools such as digital therapeutics will continue to play a valuable role in supporting safe, effective, and ongoing patient care. As healthcare continues to prepare for a technology-focused shift in care delivery, it’s vital that industry leaders recognize the value these products provide and collaborate to develop harmonized pathways and frameworks that enable DTx scalability and beneficial impacts on patient care.

About the Author

Megan Coder, Pharm.D., M.B.A., is executive director of the Digital Therapeutics Alliance. DTA’s mission is to broaden the understanding, adoption, and integration of clinically-evaluated digital therapeutics into mainstream healthcare through education, advocacy, and research.