One of the more exciting areas in the world of digital health is a subset of solutions known as digital therapeutics, or DTx. The Digital Therapeutics Alliance defines them as “software-based solutions used by patients and their caregivers or providers that are clinically validated where their use leads to a tangible improvement in health outcomes.” Pear Therapeutics, Propeller Health and Voluntis are a few of the pioneering companies that have introduced DTx solutions. Many DTx solutions implement an established behavioral or physical therapy with software tailored to each patient. Others use video games or virtual reality to alleviate pain or address ADHD.
As these solutions start hitting the market, investors and DTx companies would love it if adoption was just like a well-studied drug: DTx gets FDA approval, payers cover it and physicians write the prescription and then sit back and wait for the money to come in; no sweat. But as many digital health innovators will tell you, it’s not that simple (the ending of the Novartis – Pear Therapeutics agreement is one example). Launching a new technology into the healthcare system is like navigating a corn maze in the dark without a flashlight. For a successful launch, DTx companies must address four key challenges:
- Make solutions user-centric and engaging. Too many point solutions don’t recognize the fact that individuals want a solution that fits into their lives and keeps them engaged on an ongoing basis. How many of us bought a fitness wearable and lost interest in it after a month or so of using it? It’s similarly difficult for DCH solutions to reduce churn and maintain a high level of daily active users. Even traditional pharma struggles with adherence and compliance, so this is not unique to DTx.
- Turn providers into advocates. I was in a meeting not long ago with the leader of a digital health company and we were talking about their commercialization plan. Many of the company’s executives had a background in tech and wanted to disrupt healthcare and the traditional commercial model. However, creating a great product that goes viral and sells itself simply will not work in healthcare. Patients still look to their physicians as the authority, particularly for treatment decisions. Therefore, physicians are central to adoption and sustained use and DTx companies need to get them on board. That means more than just delivering a message and sharing clinical study results. It should also include:
*Compelling clinical evidence: In the past, digital health companies have been criticized for not having enough robust clinical evidence, but it seems like DTx firms have gotten the message. Click Therapeutics and Pear Therapeutics, for example, have been leading the charge to champion development of evidence using real-world-evidence studies and randomized control trials.
*Electronic health record (EHR) and workflow integration: Busy physicians spend as much as five hours per day in their EHRs, and simply don’t have time for solutions that are inefficient and require extra steps to view data. Manufacturers need to make workflow-enabled solutions so HCPs can access, interpret and act upon data collected from DTx systems to make treatment decisions and support patients.
*A financial value proposition: Does the physician or system have the appropriate financial incentives? In the U.S., new telemedicine and remote monitoring billing codes have been introduced, which is a step in the right direction. Alternatively, the DTx solution could align with the institution incentives such as new value base care programs or show them tangible cost savings that could be realized. Companies that don’t capture incremental reimbursement for the physician should make sure they are, at a minimum, not creating financial disincentive - Focus on payer coverage and support. In many cases, the default for health plans is not to cover something new until substantial evidence has been collected and cost effectiveness defined. Many new DCH solutions are unproven, and their sustained impact on health outcomes and cost is not yet demonstrated. Therefore, reimbursement of DTx has lagged. There are signs things are changing and some pharmacy benefit managers have announced new digital health formularies. DTx companies must have clear definitions of economic value for payers, whether that be cost savings from improved health outcomes, reduction in overall healthcare utilization or reduction in operational or administrative burden associated with disease management.
- Create a new go-to-market model. As new DTx solutions enter the market, manufacturers are making decisions on the commercial models required to drive adoption. Is the traditional pharma model the right approach, or is there a new way to think about this? Unlike biopharma products, DTx products have important differences that must be kept in mind when thinking about the right model:
- Evolution of DTx products over time
- Different regulatory parameters
- More RWE evidence and pilots versus randomized controlled trials
- Hospital or EHR integration considerations
- Unclear reimbursement or payment models
- Different customer service needs
- Need to educate or train patients and physicians on products
For DTx, traditional biopharma companies must reframe the commercial approach to be more integrated with product releases and more agile than the traditional pharma model. Tech integration requires new skill sets and roles. Depending on the margin and pricing of the solution, a leaner approach with more digital promotion compared to personal selling also might be required.
In the video below, ZS associate principal Vijesh Unnikrishnan offers five steps for life sciences companies to develop more agile go-to-market strategies for digital health solutions.
Digital therapeutics are an exciting opportunity for pharma to establish meaningful “drug-plus” programs that create real clinical value. Companies that adapt their approach and overcome these four challenges can jumpstart their path to successful commercialization.
