The Current and Future States of Digital Therapeutics

post image

The term “digital health” has become an umbrella under which many disparate technologies fall, but as the field has expanded, divergent sub-categories have emerged. In particular, the unique capabilities and impending growth of digital therapeutics (DTx) has proved it’s worthy of its own distinction.

What are digital therapeutics?

According to Digital Therapeutics Alliance, DTx refers to “evidence-based therapeutic interventions that are driven by high quality software programs to prevent, manage, or treat a medical disorder or disease.” Digital therapeutics differentiate themselves from other digital health technologies by adhering to rigorous standards of evidence and regulatory oversight. The underlying technologies range from services provided via mobile apps to drug supplements and replacements.

Digital therapeutics have been around for roughly a decade, but for much of that time, they were mainly studied and sponsored by academia, with little access to consumers. However, according to a 2020 study by Evidera, the number of digital therapeutics trials has grown from 12 in 2015 to 58 in 2019, and the private sector has taken notice with increased investment in those trials.

Digital psychiatric interventions have been a major focus area for the private sector in particular. In the past ten years, the industry has been behind 15 of the 45 trials for DTX psychiatric tools such as EndeavorRX, the first and only FDA-approved therapeutic treatment via video game. The game works as part of a treatment plan prescribed by a doctor to improve the attention function of children ages 8-12 dealing with ADHD or similar conditions.

Fields like psychiatry, addiction treatment and sleep medicine perhaps lend themselves most naturally to these sorts of digital interventions, as they’ve already found great success with telepsychiatry software; however, the tools are being deployed across a variety of therapeutic areas. Other areas of focus seeing increased attention include endocrinology, respiratory and cardiovascular digital tools.

How does the industry look now?

DTx has established itself as a viable treatment option with a lot of room to grow, and investors are taking notice. Just this month, Happify Health received $73 million as part of their Series D funding round. Pear Therapeutics - which is one of the first DTx companies to get FDA approval for substance abuse treatment- is up to $100 million in their Series D as they continue to roll out additional treatment tools targeting addiction and schizophrenia.

Companies have been breaking ground with their psychiatric tools, but players in other specialties are emerging as well. Welldoc’s BlueStar has been proven to effectively lower blood glucose levels for adults with type 1 and 2 diabetes. These tools aren’t just tech industry darlings; Welldoc recently announced they’re teaming up to develop diabetes tools with pharma giant Eli Lilly.

Investment in digital therapeutics is happening at a large scale right now, but the path to widespread adoption in healthcare is a bit more complicated.

What are the challenges to adoption?

Despite both the tangible success and clear promise that lie ahead, wide-scale patient access will only be possible with the help of regulatory bodies, as well as increased adoption rates by payers and physicians.

Fortunately, pandemic-induced emergency approvals from the FDA accelerated efforts to expand access for patients, but whether or not these relaxations become permanent is still unclear.

While DTx companies have a long road ahead in terms of public and private payer reimbursement, their ability to quickly collect data and measure efficacy at a relatively low cost is enticing for insurance plans.

Even with the expansion of coverage options, gaining the approval of physicians also poses challenges. A 2019 AMA study found that 87% of physicians see some advantage in digital tools, as evidenced by the ubiquity of medical practice management software and EHRs in recent years. But due to their recent entrance into the market coupled with the additional onboarding that is not traditionally required for a new medication, physicians need reassurance that they are effective through extensive data and clinical trials. Concerns of cybersecurity also will have to be addressed.

Overall, many trials lie ahead for digital therapeutics. The pandemic environment has certainly opened the door to faster adoption but the question remains whether that momentum will carry over into the post-pandemic world.

Where is the industry heading?

While the healthcare industry approaches change like a tortoise approaches rabbit races, valid concerns exist to protect patients and physicians. However, the opportunity in DTx has become difficult to ignore.

The global digital therapeutics market size is projected to reach USD 8.91 billion by 2027, a fairly significant increase from USD 2.1 billion in 2020. The financial opportunities are tantalizing, but the innovation of DTx towards providing care with tangible, verifiable results, in some cases independent of any prescription drugs, is as thrilling a prospect as any.