Since the publication of our first report on digital therapeutics (DTx) in 2018, not a great deal has changed, but at the same time, it has. The definition of DTx has blurred with a wide variety of healthcare and medtech companies co-opting the term to describe their general digital health offerings. In order to cut through some of this noise and confusion, the HealthXL team hone in on a particular subset of DTx which are promising enormous clinical and economic potential: prescription digital therapeutics (PDTs).
Written in collaboration with Brian Dolan, the leader and founder of Exits and Outcomes (E&O), the upcoming report explores why PDTs are a critical subset of the DTx industry. The HealthXL team identified and analyzed the 30 different PDT companies, with products either currently on the market or in the pipeline. Here's HealthXL and E&Os list of PDTs:
The HealthXL team has sliced and diced this list, identifying trends and classifying the PDT companies by their therapeutic areas of focus (see Market Mapping diagram below). While it is not surprising that chronic disease management and mental health remain the most tapped into areas, new solutions are also emerging across more exotic therapeutic classes including ophthalmology and gynecology.
Those of you who were lucky enough to catch a sneak peek of the report will have seen some of the exciting themes that we explored in relation to PDT. For anyone that missed out, we have given a quick recap below!
You can expect key examples of PDT applications, industry implications and a critical viewpoint of the current reality of the DTx environment and those which must be addressed in order to truly deliver on the DTx promise. Also, on this note, keep an eye for upcoming meeting ‘Prescription Therapeutics - The Future of DTx’ on March 1st. Join a small group of digital health enthusiasts to discuss some of the key themes visited in this report. This must not be missed!
So, what exactly does the report explore?
Investment / Solutions Landscape
The top-funded PDT company of 2020 was Biofourmis, obtaining a whopping $100 million in investments. As with other areas of digital health, investment in the PDT space peaked in 2020, likely as a result of the global pandemic. Will we continue to see this increased in investment throughout 2021? Will higher investment = greater traction?
Business Models and Pricing
One of the HealthXL member FAQs is how different business models can be applied to DTx. Well, the answer is here! We have painstakingly parsed through the detail to define four categories of PDT companies out there (some companies have multiple categories of offerings!)
- PDTs with Rx Products that are regulated by the FDA as Rx-only
- PDT companies that are regulated by the FDA as Rx-only, but not due to the digital therapeutic component of their product.
- PDT companies with over-the-counter solutions (not FDA-regulated as Rx-only products)but who are using a prescription distribution channel.
- PDT companies that only have over-the-counter products today but are planning an FDA-regulated Rx-only product.
If this is a topic of particular interest to you, check out our upcoming meeting on the overview of the market and deals in DTx here.
Clinical and Economic Outcomes (NICE, FDA, TGA, DIGA)
Surprisingly, our research showed that only 27% of PDTs have published RCTs to validate their clinical offerings, and only 10% have published economic studies. This highlights the nascency of this space. What level of validation do you think should be required for these prescription products and what level of validation would support economic return?
In the report, we compare and contrast the current frameworks that support the validation of PDTs [NICE (UK), FDA (US), TGA (AUS), DIGA (Germany)], and dig into the rigor of evidence provided for these products vs traditional pharmaceutical agents. We also discuss the use of digital endpoints (or lack thereof) in the clinical validation of these products.
Regulation and Reimbursement
Navigating the regulatory and reimbursement landscape has historically been one of the biggest challenges for digital health. The lack of regulation or coverage by insurers, however, may in fact, be a blessing in disguise. Our report digs into how regulatory bodies, innovators, and corporates around the world are endeavoring to make this a reality.
- Outside the US, 6 PDTs have been reimbursed. Within the US PDTs are mainly reimbursed by small payers and PBMs.
- So far under the German system, 10 DiGAs have been approved for reimbursement with about 5,000 prescriptions.
- The regulatory approval of CureApp for reimbursement by the Japanese Public Healthcare System marks the first PDT reimbursement milestone in Asia.
Adoption and Enablement
Pharmacy benefit or medical benefit? Neither? Other? Although the recent emergence of digital health formularies shows promise for the adoption of PDTs, research has shown that payers in the US do not anticipate that a formulary approach will be widely adopted for another 3-5 years. Prescription integration remains a key barrier to adoption, although Germany and Belgium are spearheading changes within this space.
The Future of PDT
PDTs are quickly emerging as one of the most spoken about areas of digital health, however many barriers continue to restrict the widespread adoption of these technologies. What needs to happen in politics, within the FDA, within PBMs, in the minds of physicians and consumers to move the needle? We gaze into the crystal ball.
Make sure you save the date for our upcoming meeting ‘Prescription Therapeutics - The Future of DTx’ on March 1st, where we will explore some of the key findings of this report, including questions on the rigor of clinical and economic evidence required of PDTs, regulatory requirements of PDTs, and prescription pathways (or lack thereof) to bring these therapies to the relevant candidates.
What does the future of DTx look like to you. ? Get in touch with us here!