November 30, 2018

HealthXL Digital Therapeutics Report

Reports
Chandana Fitzgerald
Digital Health Investments have reached colossal figures - $179.6 billion at the end of 2016, projected to reach $536.6 billion by the end of 2025. We are no longer wowed by the ever growing numbers, but the numbers do tell a story. Today, we have a digital solution for every health need imaginable, being made for all types of stakeholders - for consumers as well as for enterprise.

HealthXL’s mission is to accelerate the adoption of digital health innovation by providing the standard intelligence platform. And as part of this mission, HealthXL will release one such report every quarter on topics that are important to us, and to you. We want to get beneath the hype and media stories, and assert our views as those with eyes in every segment of the healthcare ecosystem.

The new wave in the industry is Digital Therapeutics (DTx). The term came into existence under the premise that mobile software can be effective medical treatments.The question does not seem to be whether to invest in, or partner with a DTx, but which one and how soon. DTx certainly seem to exhibit a superiority above all the 'banal' digital health solutions, but is the promise real? Has a new category of medicines arrived? Have you suddenly seen a surge in re-branding of digital health solutions as digital therapeutics? We certainly have. This is not to say that some of them are not promising in their offering or potential. In this report, we take a stand. What constitutes a DTx? What level of rigor does a DTx need to exhibit to truly become a therapy? Who are the real rising stars of the growing DTx industry and what milestones have they achieved? What therapeutic areas carry the greatest promise in the application of DTx? What is the Regulation (or lack thereof) for these new medicines? How do DTx intend to make money? We have released an all-inclusive report on DTx to try and answer these questions.

Clarity Affords Focus: Defining DTx

We are in agreement with the Digital Therapeutics Alliance’s definition of digital therapeutics.

‘’Digital therapeutics represent a new generation of healthcare that uses innovative, clinically-validated disease management and direct treatment applications to enhance, and in some cases replace, current medical practices and treatments.

DTx products demonstrate safety and efficacy in randomized clinical trials, receive regulatory clearance when used as a medical device, integrate into clinical practice, may be prescribed by healthcare providers, and tailor to patients’ clinical needs, goals, and lifestyles.”

Based on the same, we created a checklist of must haves to be a digital therapeutic - see if you qualify as a DTx.

No report would be complete without understanding the money that is going into a new, upcoming industry. Digital health is a highly investment driven industry. So, we used the HealthXL platform and data services (yes, we love it so much) to sweep the area and take a look at the numbers. The results are <drumroll>

Total number of investments in DTx to date: 130

Total amount of disclosed investments in DTx to date: $1,565M

And the winners who received the most moolah are: Proteus Digital Health, Livongo, Akili Interactive Labs, Omada Health, Headspace.


Business Models for DTx

With big investment comes big responsibility - how are DTx planning to make money? We’re seeing two key trends. Stand alone therapies and those that add a new value proposition to existing interventions when used adjunctively with drugs. We believe standalone DTx need to be as good as pharmacotherapy and show similar evidence of efficacy in order to really come into use. Drug-device combinations have some advantages in that they act as an adjunct to pharmacotherapy, they come with an audience in physicians and patients, they have a valuable partner in the pharmaceutical company for all their industry know-how. But despite the oh-so- obvious advantages, these combination DTx are yet to make their way into point of care at scale.

Evidence is Everything

If a DTx cannot prove that it works per its claim, it should not be out there. Large scale RCTs have been deemed as gold standard, but we have only seen small studies on the DTx front. The largest online behavioural program for diabetes prevention by Omada is enrolling only 484 participants (due to be completed in Q3 2019). That begs the question of whether DTx are ready for showtime yet (because we do understand that any new therapy has to go through the cycle of small pilot studies to progressively larger comparative studies). We also do not have gold-standard guidelines on how to successfully run a ‘digital trial’. We are unclear on how to measure digital biomarkers collected via DTx, although we can see the value in theory. We don’t know, as an industry, the appropriate ‘placebo’ or ‘control arm’ equivalent for a digital therapeutic. So, where is the comparison? We also urge the industry to think beyond efficacy studies. In order for wide adoption of DTx by physicians, patients and payers, we need cost-effectiveness data and proof of real world efficiency. Real world scenarios also give you cultural perspective. DTx will only succeed when there is cultural acceptance - a lucid understanding of the offering, how and when to use it. We’ve coined the terms GCP and Best Practice in Pharma and Medical lingo respectively. So, why not for DTx?

We wouldn’t be exaggerating in saying that there really is no health economic outcomes data for DTx at the moment. The hope is that DTx will cure its pilotitis (the condition of being stuck in pilot)and move to become a real therapy option.

Prescription: Getting into The Hands of Physicians and Patients

So, how do the most promising DTx actually make it into the hands of end users? As it stands, the vast majority of DTx exist in the realm of clinical recommendation or patient self-identification. When it comes to clinical support of prescribing DTx we have some way to go before facilitatory systems are in place. We have seen the advent of prescription platforms such as Rx Universe from Mount Sinai and a number of other players worth keeping on your radar. In the US, there are also a number or CPT codes slowly being introduced that may be central to facilitating the prescribing of DTx. While there are numerous unknowns around exactly what regulatory moves need to be made to make PDT (Prescription Digital Therapeutics) a reality, we have seen some early activity with the players listed below. In the DTx report we breakout a handful of Prescription platforms, the key benefits of introducing PDT into a patient pathway and some of the stakeholder implications; from PBMs, Pharma and Patients.

Regulation for DTx akin to Pharmacological Drugs?

If every therapeutic drug has to undergo strict regulatory approvals, why should DTx be exempt from it? Regulation is slowly catching up with digital health, with both the US and EU taking some steps in response to the growing digital therapeutics industry. DTx that support low risk patient behaviour change, independent of pharma interventions, may not be subject to strict regulation. In contrast, DTx that directly compete with existing pharma interventions, or are administered alongside pharma interventions and claim therapeutic benefits, will go through the standard regulatory process. In our report, we discuss the handful of DTx companies that have managed to get FDA approval for SaMD, and what the implications of the FDA pre-cert programme and new EU regulations for SaMD will be for the DTx space.

Making DTx Profitable for the Makers and Accessible to Patients

Although DTx are the talk of the town, reimbursement for these solutions is lagging behind. As an industry, we are still trying to figure out what the gold standard is for a solution to become eligible for reimbursement. In our report, we explore some of the successful models to date - coverage by employer health plans, government, and private insurers. For a digital therapeutic to secure payment for their solution, it is important to understand what types of solutions each of these payers are interested in and how their requirements may differ. At a national level, the focus is on making DTx solutions accessible to the entire population - the German Statutory Health System or the NHS Digital initiatives to cover mHealth are good examples of this. Employer health plans have greater flexibility in what they can offer their policyholders and have shown interest through their recent partnerships with DTx. Based on the successful models to date, as well as conversations we have had with many different stakeholders, we have put together a checklist of the key criteria a payer looks for in a digital therapeutic:

Moral of the Story

We’re not there yet. Despite the myriad conferences on DTx, all the marketing doing the rounds on the greatness of DTx, they are yet to make their way into large scale clinical practice and patient care. A lot of our friends in the industry have already started this process, and kudos to you. We are not taking digs, but merely calling a spade a spade. But as HealthXL, we believe in innovation, in digital transformation. So do all of those that work with us.

We hope that this report will help the industry to come together to ensure that DTx go from an idea in the mind of an entrepreneur to treatment in the hands of a patient.

If you wish to access the full report, available for purchase HERE

please contact notify@healthxl.org if you have any questions.