Editor’s Note: Digital Therapeutics offer the prospect of a tremendous new treatment paradigm for patients and the healthcare system. The digital health revolution promises numerous benefits including but not limited to cost savings, improved patient access, and adverse side effect reduction. While many have already experienced positive benefits from prescription digital therapeutics, the industry faces tremendous headwinds in 2023 facing a tight funding environment and a reluctant health insurance industry. To overcome these challenges it’s essential that PDT manufacturers demonstrate their value by generating a meaningful body of evidence that proves their financial and health efficacy. Additionally, they also need to develop effective commercial models to allow them to generate sustainable cash flow and clear evidence of demand for insurers. The PhilRx Platform is the ideal commercialization partner for brands looking to unlock payer reimbursement - read this case study detailing how we helped this innovative PDT for ADHD navigate the emerging payer landscape.
In the last few decades, we’ve watched as innovations from antibodies to gene therapy, and from CAR-T to CRISPR have been advanced by biotechnicians and life scientists. These technological advancements are welcomed both by those who seek healing and those who seek to heal, as they explore all possible options to improve life and restore health.
Our healthcare system embraces these new technologies when the benefit is real. There is always room for novel therapeutic approaches that demonstrate how they address unmet needs, lead to better patient outcomes, and add value.
The challenge of introducing a novel therapy is nothing new; it has been done again and again, but always from a foundation of compelling evidence. This evidence must be gathered through a rigorous scientific approach that demonstrates quality, safety, efficacy, and a favorable balance of benefits and risks. We accomplish this by the careful, systematic collection of data through standardized clinical research. Even under the great pressure of the Covid-19 public health emergency, this standard was relaxed, not removed.
Collective enthusiasm around one exciting new modality – prescription digital therapeutics – has led many to conclude that these new medicines could take a shortcut around this approach. Many believed these therapies, which marry the adaptability of software with the therapeutic intent of medicine, should be made available as soon as possible based on digital products’ inherent safety (“What harm can ones and zeroes do?”) and ability to improve with experience (“Let’s launch early so we can learn from users now”).
While these are key benefits of digital therapeutics and this optimism may have been laudable, this approach to market relies on promise without proof of efficacy and ignores the fact that not all digital therapeutics are created equal. It asks our healthcare system to take a giant leap of faith – making significant changes in policy, coding, infrastructure, distribution and more – without the assurance that this leap will land on anything firm.
Others in the field recognize this challenge and have taken a more systematic, methodical, biotech-like approach to developing this new technology, treating the digital mechanism of action as a feature of our medicines, not a reason for special treatment. Leveraging the same techniques scientists and clinicians routinely apply to new biomolecular insights, this slower path to market is designed to generate compelling evidence of efficacy, which remains the essential foundation of any new therapy.
In other words, there have been two different versions of creating and marketing prescription digital therapeutics. One hasn’t worked; the other will.
PDT 1.0 is based on the thesis that once digital therapeutics are conceptually proven, developers should go ahead and build their apps at a minimal viable product level then get to market quickly, generating income and evidence as users adopt their treatments on a “why not?” basis rooted in safety. Many first-wave PDT companies led with this approach, which echoes consumer tech’s “failing fast” principles, enticed by the promise of relatively low-burden regulatory clearance (especially when labels without treatment claims were sought) and the drive to get to market with a minimum of capital. So far, this “if you build it, they will come,” approach hasn’t panned out. Instead, it has led to insurmountable downstream commercial costs as payers and prescribers denied digital therapeutics any special treatment in the absence of compelling evidence of efficacy, leaving on-market reimbursement and uptake elusive.
PDT 2.0 instead follows the premise that PDTs are at their core new medicines, and that evidence of efficacy is required for new medicines. It concludes that digital therapeutics companies should take a biotech approach to R&D, treating their products as though they are biotherapeutics. This means putting them through intensive pre-market development steps akin to preclinical refinement, manufacturing process improvement and dose optimization, followed by drug-like clinical validation. This approach demands more time and effort upfront, including investment in advanced product design techniques like multimodal, multisetting iterative user research, and leveraging modern technological capabilities in AI and machine learning. It holds that this level of rigor is essential to creating prescription digital therapeutics that deliver the value expected of medicines. Targeting this higher bar builds trust with providers and their patients, demonstrates benefit to payers, and will ultimately result in wide-scale, drug-like adoption. This can be thought of as the “no shortcuts to success” approach, which we will see play out in the coming years.
Because they are new, digital therapeutics may seem to be a complete departure from previous medical innovation. While their mechanisms of action are wholly different from biotherapeutics, they are essentially medicines and need to be held to rigorous clinical and regulatory standards comparable to any approved prescription drug. As such, they must be invested in and respected like drugs. Otherwise, all you end up with is a digital supplement – one that our healthcare system will not embrace as a medicine.
In today’s current environment, we must hold ourselves to this higher PDT 2.0 standard. Both FDA’s class II review standards for software-as-a-medical-device, and Europe’s new reimbursement pathways for PDTs, such as DiGA in Germany – which offers provisional reimbursement while apps generate evidence while on the market – correctly recognize the safe, iterative nature of PDTs that informed the PDT 1.0 path to market. But it has proven to be a mistake to interpret these supportive pathways as absolving the category from proving efficacy on par with drugs. This standard needs to be met if PDTs are to be embraced at scale as medicines by patients, providers, and payers.
PDT 2.0 will unlock the immense potential of digital therapeutics to reduce disease burdens, improve outcomes, and offer safe, effective options to patients and their physicians. Traditional medications alone cannot address the underlying neurological and behavioral foundation of many conditions, underscoring the need for clinically proven, FDA-cleared digital treatment options to bridge this gap.
Patients and providers welcome drugs when they demonstrate improvement in human health outcomes. Digital therapeutics should be judged by the same benchmarks as biotherapeutics and held to the same standards. I invite our industry and our community of supporters – investors, pharma partners, policymakers, thought leaders, physicians and patients – to embrace the more rigorous PDT 2.0 approach to realizing the promise of this new type of medicine. That will require effort, patience, and investment, and while, as with biotech, not all therapies will succeed, the returns will expand the possibilities of what medicine can achieve.
Our consultants will work with you to analyze your current channel strategy and make recommendations for how to improve patient access and increase the percentage of scripts getting covered by insurance.