“This is a whole new modality of care. If you think about the biggest subjects addressed by these apps, it’s behavioral health, and that’s where access is our biggest problem. And, here we are pushing behavioral health out to everyone’s phone. So that’s a lot of potential.”Matt Fickie, M.D., Senior Medical Director, Highmark
Digital therapeutics, or DTx, is a rapidly growing field that is poised to revolutionize the way we deliver remote patient care. By utilizing mobile apps and other digital technologies, DTx offers a convenient and cost-effective alternative to traditional in-person therapies, empowering patients to take control of their health and wellness. I’ve written on the topic in a previous blog post, but advances in the field make me believe that 2023 will be an important year in the area’s development.
Most current DTx solutions address the monitoring or treatment of chronic diseases, which are the leading driver of the nation’s $4.1 trillion annual healthcare spending. DTx solutions are typically delivered through smartphone apps. This makes them more accessible by providing treatment directly to patients’ homes and removing any stigma that some individuals, for example, may associate with substance abuse and mental health.
Five years ago, the Food and Drug Administration (FDA) cleared the first Prescription Digital Therapeutic (PDTx). PDTx are digital therapeutics prescribed by a physician and paid for by the individual’s health insurance. They are used to treat a wide range of conditions, from schizophrenia, atopic dermatitis, chronic insomnia, attention-deficit/hyperactivity disorder, and substance and opioid addiction. In 2022 CMS implemented a new Level II Healthcare Common Procedure Coding System (HCPCS) code for “prescription digital behavioral therapy,” which makes it easier for commercial and Medicaid plans to cover these therapies. Additionally, Congress is considering legislation called the Access to Prescription Digital Therapeutics Act. This bipartisan bill would establish benefit categories for certain digital therapeutics, so Medicare, Medicaid, and other public payers could reimburse them. This critical roadblock is currently blocking the way toward further adoption.
Software mobile health apps are now classified as medical devices in Europe, requiring increased regulation and safety verification. These regulatory changes encourage consumer trust, uptake, and acceptance of these products as a legitimate form of medical care. In Germany, there is now a system for reimbursing patients who purchase DTx apps as a form of treatment. This could be a valuable incentive for patient adoption of remote care. This DTx adoption trend is expected to continue, with GlobalData predicting the approval of 70 new Class II mobile health apps in 2023.
Despite its potential to transform healthcare, bringing DTx to patients is complex. Companies must provide robust clinical trial data to be approved by regulatory agencies, including the U.S. Food & Drug Administration (FDA), which can sometimes take years and require a large amount of capital. It’s essential to remember that even before physicians prescribe prescription digital therapeutics, they want to know that they deliver results – and that they are covered by insurance. Much of this can be accomplished by providing figures that prove DTx can reduce costs for payers, but it is often time-consuming to pull the data together, adding yet another hurdle to overcome. Currently, one-off contracts with state Medicaid plans remain the only public coverage of PDTx, and large commercial payers have remained hesitant to cover digital therapeutics. To be successful, business models should allow for reimbursement so that therapeutics are accessible to those in need.
It is important to note that the success of DTx will depend on several factors, including the development of effective and user-friendly technologies, the availability of reliable and secure data systems, and the ability to demonstrate clinical effectiveness and cost-effectiveness. It will also be essential to ensure that these technologies are accessible and affordable for all individuals, regardless of their location or socio-economic status.
While the use of DTx is still in its early stages, it has the potential to revolutionize the way healthcare is delivered and received. We’re looking at a world that eliminates the need for syringes and needles, supports more remote monitoring, focuses on older adults’ health and wellness, and deploys behavioral health to solve complex health problems.
The potential for DTx to improve patient outcomes and reduce healthcare costs has not gone unnoticed by investors. Venture financing in the field reached nearly $500 million in 2021. GlobalData’s TMT Predictions report for 2023 anticipates that digital therapeutics will be a key emerging health tech theme for investment.
Big Pharma has also noticed, with many major pharmaceutical companies investing in DTx platforms to tap into this growing market. DTx offers the next significant form of remote treatment and will continue to grow in importance as we look to improve healthcare delivery in the digital age. As the field continues to evolve and mature, it will be interesting to see how DTx is integrated into the broader healthcare ecosystem and its impact on patient outcomes and care delivery. With significant investment from both the private and public sectors and regulatory changes facilitating the adoption of DTx, we will likely see even more innovative and effective digital therapeutics solutions emerge in the coming years. By adopting and embracing digital therapeutics at scale, pharma, healthcare providers, and other life science players can improve the quality of lives of patients across the globe.
Current market map – Digital Therapeutics companies – From CB Insights, December, 2022
Although they may not currently be as widespread options as traditional therapies, researchers expect digital therapeutics to have a significant impact across multiple medical specialties. As such digital-based tools and programs gain more backing from clinical tests, they will be seen as viable alternatives for practitioners who can turn their use into everyday practice. Just like physicians have been prescribing lifestyle changes for appropriate ailments for centuries, they will similarly prescribe smartphone apps and digital health technologies. And this shift towards DTx will not be because of the technology itself but because they have been proven to work for patients.