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And with technology, the pace is exponential. Case in point, we recently published a piece on The Cohabitation of Digital Therapeutics and Pharma in the House of Digital Health. In the short time since, the Digital Therapeutic (DTx) space has continued to grow with new companies forming, existing companies expanding into new indications, or solutions advancing in their development stage. It seemed like an enigmatic discipline.
Since the Digital Therapeutic Alliance published their definition, however, the industry rallied around a common and encompassing description that allows us to easily distinguish DTx from the rest of the big Digital Health house.
The key requirement to be classified as a DTx is valid clinical evidence, proving the effectiveness of a solution. To essentially prove the medical promises it makes. This is not just the key differentiator, but also the foundation for further differentiation, including the ability to prescribe or reimburse. As such, DTx definitely inhabits its own floor among all other Digital Health solutions out there, be they mHealth solutions, clinical decision support tools or others, and while many of these integrate into the overall value chain or transform the point-of-care, DTx create an entirely new health and care modality.
While the industry only recently acknowledged a singular definition, many more structures are yet to build to enable these solutions thrive on the current market. One of these key structures is the regulatory environment. Often the regulatory frameworks take some time to catch up and it’s no different in this arena. However, with an open call from the FDA, for instance, to work with them in setting up the right pathways, it’s a new way of working with regulatory bodies that shows clearly how collaborative this industry is setting itself up to be. The FDA’s “pre-cert” program, is aimed at providing just that - a pathway that works for DTx - is still in pilot mode and not expected to open further in the next months. We’ve only just seen the first FDA submission come through this program for insomnia (PEAR Therapeutic), with depression hot on its heels (Somryst). Both demonstrating how much even the “pre-cert” program is still in its infancy. Operating under these conditions, companies are poised to build partnerships in their urge to receive regulatory clearances along current pathways, working with existing IP structures and with more or less non-existent regulatory exclusivities. The cards have been dealt quite harshly to DTx, as the industry is just not made to fit their breed of medicine. Hence, making them profitable within the existing settings isn’t the easiest task. To tackle this, the industry is looking for collaborative efforts. These partnerships differ vastly, as we have seen deals form between DTx and Payor, DTx and Pharma or even DTx and DTx.
In a healthcare system that is openly called broken, it’s no big surprise that the drive to offer patient-centric, long-lasting, preventative and integrative solutions is a clear step forward. On the other hand, as clear and accessible roads to prescription and reimbursement are still only loosely paved, with no DTx-focused Current Procedural Terminology (CPT) codes for instance, many choose to go direct-to-patient. Lots have caught on with many running on out-of-pocket payment. However, how scalable and sustainable is that, truly? Patients don’t want to pay for things they believe their insurance should cover, nor should they. The more complex and advanced a DTx, the less possible an out-of-pocket pay will be, leaving this payment model for Digital Wellness tools instead. And rightfully so, as we can now see the true value of a DTx as it brings similar or better results to patients, so too should DTx be able to charge accordingly. Especially as the process to build and prove effectiveness is a long and complicated one at that. Thissignificant hurdle coupled with a mounting evidence of DTx’ effectiveness, the industry should make sure they’re adequately secured, regulated and tested is only logical. Not just to ensure that people receive the right and save care but also to give DTx the place in the health industry it deserves. The respective pricing will need to reflect this.
In a world with rising chronic conditions, stress is taking an increasing toll on mental health and simultaneously the push for higher self-care or self-controlled health., Aa lot of Digital Wellness companies are perfectly positioned to advance into DTx. But categorizing or dividing Digital Wellness tools that go direct-to-consumer vs. prescription digital therapeutic has really only limited value in today’s world.
If looked at Digital Wellness and Digital Therapeutics combined, one can see how both of them are not only growing rapidly but also the connection becomes apparent. DTx would arguably be part of the Digital Wellness family, while inhibiting a much more narrowly defined space.
Consumers are looking for ways to manage their health holistically and digital tools are here to help. Many say DTx is creating an entirely new modality in medicine, and as such, they should also inhabit their own “house” with specific settings to support it. Maybe it shouldn’t be seen any longer as just one piece of the bigger Digital Health house or ecosystem, but rather give them their own. In this regard all the loosely guided industry standards we mentioned above, may also need to be brought in to question and set up in a DTx-focused way.
As you may have read, G4A focuses on creating ventures anchored in human-centered design, meaning we create solutions with consumers and patients together in a very iterative way. We sit with them to understand their problems and desires. This means there is a lot of time spent “in the wild” to fully understand our consumers’ beliefs and worldviews, as much as their daily habits. Already today we have many difficulties ensuring patients stay adherent and compliant to their medications, with DTx being entirely left alone to its software-based behavioral interventions, a smooth integration into patient’s lives is key. Additionally, to the interventions DTx deliver, the solution relies on the software’s User Experience/User Interface (UX/UI) to drive the use of their product. Human-centricity is, therefore, the most important aspect of creating a successful DTx. And with that, the apparent connection between G4A and DTx are also a key driver for us.
It’s not a big surprise that Pharma has been looking at DTx with mixed feelings. Some have doubled-down and acquired DTx, others are betting big on it by signing big commercial deals; another group is investing from seed to late-stage; and yet others are sitting on the sidelines watching the spectacle play out in front of them. In our preceding DTx blog <link to blog>, Javier alluded to the question of “whether Pharma and DTx are a match made in heaven.” The questions remain: should or shouldn’t Pharma get into DTx? But is that really the right question to ask? I doubt it.
I would rather ask whether DTx can or can’t help patients live better, healthier and happier lives. And if the answer is yes - and everything seems to point to a big YES - then what exactly are all industry players waiting for? We need the entire industry to embrace this new form of medicine to truly move the needle. Frankly, the amazing advancements and continuous push by, and even collaboration amongst, DTx companies is impressive. I was humbled to see the collaborative spirit we saw during the recent DTx Europe conference in London and would love to see this community growing.
Let’s join this conversation and shine a light from all angles on the current structures and how we need to frame them to enable DTx to live up to the promises.