The Rise And Importance Of Digital Therapeutics

What are digital therapeutics?

Digital therapeutics (DTx) are software products that are used to treat medical conditions. As defined by the Digital Therapeutics Alliance, digital therapeutics “deliver evidence-based therapeutic interventions to patients that are driven by high quality software programs to prevent, manage, or treat a medical disorder or disease.”1

What’s the Difference Between Digital Therapeutics and Digital Medicine?

Similar to traditional prescription medication, DTx products must receive FDA approval by adhering to the same standards of evidence and regulatory oversight.  And they often require a prescription. The difference between a digital therapeutic and a healthcare app is a DTx needs to demonstrate clinical value.

There Are Three Types Of Digital Therapeutics*

Adapted from Digital Therapeutics Alliance
**Includes digital therapeutics that prevent a disease

DTx Addresses The Needs Of Multiple Stakeholders

Digital therapeutics are designed to enable patients to take greater control over their care, similar to consumer wellness apps but with one key difference: Digital therapeutics focus on delivering clinical outcomes.3.

A Few DTx Examples In Market

There Has Been Tremendous Growth In DTx Spending

There have been around 40 digital therapeutics approved by the FDA since 2017 (the FDA does not have defined list)4. Insider Intelligence forecasts DTx to be a $56 billion global opportunity by 2025.

Digital Health Spending (In Billions)*

*Adapted from Insider Intelligence DTx Report
** YTD as of 9/30/20

The greatest focus in the past 10 years has been in the Psychiatric Space:

Therapeutic Focus of DTx Across All Phases of Development, 2021

And neurologic and psychiatric indications continue to be the focus with around 70% of products in development:

COVID-19 Accelerated the Deployment of Digital Therapeutics

In April of 2020, the FDA eased restrictions on digital therapeutics to address the concerning mental health crisis:

FDA is issuing this guidance to provide a policy to help expand the availability of digital health therapeutic devices for psychiatric disorders to facilitate consumer and patient use while reducing user and healthcare provider contact and potential exposure to COVID-19 during this pandemic.5

The guidance was intended to ease restrictions and expand care:

Given these public health benefits, for the duration of the COVID-19 public health emergency, FDA does not intend to object to the distribution and use of computerized behavioral therapy devices and other digital health therapeutic devices for psychiatric disorders, without compliance with the following regulatory requirements, as applicable, where such devices do not create an undue risk in light of the public health emergency. 5

This spurred the dissemination of many products, many in the pre-approval phase. In April 2020, for example, Omada Health Inc. announced that its digital mental health tool would be available for free to all commercial health plans for the next six months.

An FDA spokesperson said the agency “would like to see more evidence-based products in this area” but declined to comment on which flexibilities might last beyond the pandemic.4

But Who Pays for This?

Coverage of DTx is an evolving area and needs to be monitored closely.  For example, currently, Medicare does not have a specific benefit category for digital therapies, so reimbursement has not been consistent. Megan Coder, executive director of the Digital Therapeutics Alliance, a coalition of manufacturers, said private insurers have expressed more interest in covering these tools, and companies are increasingly making them available to their employees.4

Express Scripts launched the first Digital Health Formulary in May 2019 to support HCPs in identifying treatments with the greatest overall value for patients. It included 15 applications that aid in the management of the country’s eight most common chronic conditions: diabetes, prediabetes, hypertension, asthma, pulmonary disease, depression, anxiety, and insomnia.6 They then added another five tools to the formulary in October, in areas of women’s reproductive health, tobacco cessation and muscle and joint pain.4

As of March 2020, there was interest across the board and the proliferation of proven therapies may help drive coverage*:

Thinking About Creating A Digital Therapeutic?

The Digital Therapeutics Alliance Core Principles7

The Digital Therapeutic Alliance has created a founding set of principles all products should adhere to.

  • Prevent, manage, or treat a medical disorder or disease
  • Produce a medical intervention that is driven by software
  • Incorporate design, manufacture, and quality best practices
  • Engage end users in product development and usability processes
  • Incorporate patient privacy and security protections
  • Apply product deployment, management, and maintenance best practices
  • Publish trial results inclusive of clinically-meaningful outcomes in peer-reviewed journals
  • Be reviewed and cleared or certified by regulatory bodies as required to support product claims of risk, efficacy, and intended use
  • Make claims appropriate to clinical evaluation and regulatory status
  • Collect, analyze, and apply real world evidence and/or product performance data