Smartphones essentially have become an extension of our bodies. Many, if not most, of us, are never without one, and it feels strange if we are. They control our home thermostats, unlock doors, dim or brighten lighting, make appointments, play music, tell jokes. Their technology even tracks our biometrics, steps and sleep.
So, can they help us treat our diseases?
A growing cadre of software developers is betting they can.
The class of mobile healthcare apps known as digital therapeutics is growing rapidly. The market for these apps is projected to grow to $35.8 billion by 2030 — a 1,085% increase over 2021, at $3.02 billion.
Digital therapeutics, or DTx, are evidence-based software programs designed to treat a variety of medical disorders or diseases. They require prescriptions, can be used in conjunction with traditional therapies or in place of them. Many operate using cognitive behavioral therapy, and have been used to treat conditions including Type 2 diabetes, obesity, Alzheimer's disease, dementia, asthma, substance abuse, ADHD, hypertension, anxiety and depression.
The rise of digital therapeutics comes as more people than ever are diagnosed with chronic diseases: Four in 10 adults now have two or more ongoing healthcare conditions that require treatment. And technology is pervasive and advanced. The vast majority (85%) of American adults own a smartphone.
However, there are market challenges for the developers of digital therapeutics. They must jump through the hurdles of proving their effectiveness to the medical community and gaining regulatory approval on their path to revenue and profitability. Insurance plans are only beginning to accept and cover these therapeutic options. And providers have been slow to prescribe them.
Digital therapeutics go beyond mainstream health apps in that they require a prescription and have undergone regulatory scrutiny to prove their medical effectiveness.
What are DTx?
The landscape of healthcare smartphone apps is vast. The most recent data suggests more than 350,000 mobile health apps are available. They include patient portals, fitness trackers, weight-loss programs, medication adherence apps, prescription savings apps and many more.
Digital therapeutics go beyond mainstream health apps in that they require a prescription from a provider and have undergone some level of regulatory scrutiny to prove their effectiveness as bona fide medical treatments.
The Digital Therapeutics Alliance, an Arlington, Virginia-based trade association, defines DTx as software used by itself or with devices, medications or therapies that is:
- Real world evidence-based, or evaluated for benefits and risks using clinical evidence
- Reviewed by regulatory bodies
- Inclusive of privacy and security protections
- With trial results published in peer-reviewed journals.
The applications can vary, with some taking the form of video games, while others use a virtual reality platform. Many of them address mental health conditions, including ADHD, depression and anxiety, or they aim for behavioral modification that treats conditions such as Type 2 diabetes, obesity and substance abuse. Respiratory and cardiovascular diseases are seen as major areas for market growth in the future.
At least 23 DTx are on the market, and another 25 have gained regulatory approval from bodies in the United States, Europe and Japan. Nearly 90 more were in development as of July 2021, the latest count available.
The prospects for the growth of DTx are strong. Healthcare consumers have embraced technology as it applies to their healthcare, even more so since the onset of the COVID-19 pandemic. In our annual survey of patients, providers and pharmacists, CoverMyMeds found 90% of patients said they had electronic access to medical labs, tests and data. The 2022 Medication Access Report also found 84% of patients had participated in a telehealth appointment in the preceding 12 months.
Benefits of digital therapeutics
Healthcare stakeholders might find DTx products appealing for several reasons, including safety and lower costs.
Standalone DTx are not drugs, so they have minimal risk of interactions with other therapies. Those prescribed in concert with a drug regimen pose no additional risk of interaction than standard drug therapy, but are targeting behavioral shifts that can yield better outcomes for that therapy.
The first-ever safety study done with DTx, which involved 14,000 patients using physical therapy app Kaia, found no adverse effects from the program, which treats people suffering with low-back pain.
Digital therapeutics also might hold the promise of lower healthcare costs. A randomized controlled trial involving Kaia showed it reduced claims costs by 80% when compared with a standard physical therapy course of treatment.
Since DTx exist on a digital platform, data collection is built in. Knowing how often a patient is engaging with their therapy can give payers, pharma and providers visibility into adherence. And data can help stakeholders know more about how well a treatment works.
For patients, DTx, like healthcare apps in general, are empowering. The onus is on the patient to open the program and engage with it in search of better health. That can activate the consumer as the leader of their own healthcare journey, which has the potential to increase adherence and boost healthcare outcomes.
Patient healthcare apps hold tremendous promise — if patients use them. Learn more about their future in Part 1 of our series on digital healthcare innovations.
Challenges for digital therapeutics
Digital therapeutics have been lauded as a new healthcare treatment modality, and they have distinct benefits. They also face challenges to market viability and widespread adoption.
Establishing clinical evidence of their effectiveness to gain regulatory clearance and hence the ability to be covered by insurance plans is hurdle No. 1 for DTx. International bodies, including the U.S. Food and Drug Administration, are working through their responses to this rising class of healthcare treatments. The challenge is in adapting quality-control models and logic used for clearing pharmaceuticals and hardware-based medical devices to this very different field of applicants.
Convincing payers to cover DTx has been a slow process, however some progress has been made recently. Express Scripts, which is part of Cigna, has a list of DTx “on formulary,” or covered by its plan. In October, Pittsburgh-based Highmark became the first insurance company to cover the treatments. The plan said its 6 million members can get coverage for DTx if they’re FDA-approved and prescribed by a provider.
Digital therapeutics’ path to the consumer is complicated for additional reasons. An analysis by McKinsey points out one obvious way DTx products could leap into the mainstream would be acquisition by or partnership with pharma companies. However, acquisitions could present more risk than potential acquirers care to take on.
As an alternative, partnerships between pharma and software startups could prove fruitful, with DTx developers bringing innovation and nimble business models to pharma, and pharma bringing its scale and audience.
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Providers represent a major way for DTx to get in front of healthcare consumers. The challenge is the number of DTx on the market and getting providers to remember their existence, let alone their names, when prescribing a treatment to a patient. To put it simply, there is no Prescriber’s Digital Reference for digital therapeutics.
Unless the DTx option is integrated into providers’ workflow with as little friction as possible — without making the clinician switch in and out of multiple programs — the chances of it being prescribed are lower.
A DTx touchpoint within provider workflow and a patient app that presents DTx options could go a long way toward bridging the communication gap between patients and providers, helping DTx gain more widespread adoption. The Xealth platform is one such integrator for digital health products.
What’s the future for digital therapeutics?
Industry watchers expect that as more companies get their DTx treatments approved by regulators, getting them on providers’ and patients’ radars, the market will grow quickly. In the United States, it’s seen growing tenfold in the next three to five years.
The CEO of Boston-based Pear Therapeutics, which trades on the Nasdaq as PEAR, said he hopes its three FDA-approved DTx will become the standard of care for substance use disorder and insomnia. Pear expects revenue in 2023 to be 30 times what it was in 2022.
The company is one of many pinning their hopes on technology as a powerful tool to treat disease and ultimately make people’s lives better. How soon this vision of a med-tech revolution in patient care will materialize is the question.
For more on how patients and healthcare providers are using technology, read the 2022 Medication Access Report.