Forging an access pathway for digital therapeutics

Forging an access pathway for digital therapeutics

By Brigit Kyei-Baffour, Avalere (part of Avalere Health)

In recent years, there has been substantial investment in and focus on the digital health sector, recognized as a promising frontier for enhancing patient care. Digital therapeutics represent a significant evolution in healthcare treatment, pushing the boundaries of traditional approaches. With ongoing technological advancements and the growing demand for improved healthcare solutions, digital therapeutics are poised to play an increasingly critical role in the future of medicine and digital health. However, achieving market access remains a major challenge due to regulatory and reimbursement complexities. Despite the potential to bridge care gaps and enhance accessibility to diagnoses, management, and treatments for specific conditions, patient access to digital therapeutics has been hindered by numerous obstacles.

DTx: an evolution in health technology

Digital therapeutics (DTx) are evidence-based therapeutic interventions that are often developed in combination with a device and/or therapeutic agent (e.g., a software-based therapeutic used to treat insomnia). These products — which can be prescription or non-prescription based — are designed to prevent, manage, or treat a variety of medical conditions and address challenges such as medication adherence and poor disease control. They rely on mature data infrastructure and collection, integrating artificial intelligence (AI) to personalize treatments and content.

Currently, DTx are predominantly applied in the fields of diabetes, cardiovascular disease, and oncology.¹ Approximately two-thirds of current and upcoming digital therapeutics products are aimed at mental health, behavioral disorders, and neurological conditions, particularly those involving behavioral change.²

Key factors driving growth in the DTx market include the increasing prevalence of chronic diseases, advancements in technology, widespread adoption of smart devices, a rising focus on preventive healthcare, and a desire to manage healthcare costs effectively. These factors collectively contribute to the expansion and adoption of digital therapeutics as innovative solutions with potential to improve patient outcomes and reduce overall healthcare expenditure.

The regulatory challenges

Digital therapeutics may not fit neatly into existing regulatory pathways designed for traditional pharmaceuticals or medical devices. Because these products can be classified as medical devices, software, or a combination, the regulatory process can be quite complex and depending on the product classification — may be subjected to different regulatory requirements.

Regulatory guidance often requires robust clinical evidence demonstrating safety, efficacy, and usability of digital therapeutics. Establishing this evidence can be challenging, especially given the evolving nature of these technologies. Additionally, DTx often require novel endpoints and validation methods compared to traditional drugs or devices. Developing and validating these endpoints in clinical trials can be difficult to navigate and may require collaboration with healthcare providers and regulatory bodies. In addition, because DTx systems collect and store sensitive patient information, they must comply with data privacy and security regulations in addition to meeting safety and efficacy standards. This includes ensuring patient data is protected from unauthorized access and patients are informed of how their data will be used.

The obstacles in reimbursement and coverage

With a variety of reimbursement routes applied across markets, it may be difficult for manufacturers to identify the optimal path. The Centers for Medicare and Medicaid Services (CMS) has developed policies for the reimbursement of remote patient monitoring and telehealth solutions, but there is no clear policy on reimbursement of DTx.³ This absence complicates access for patients with government insurance such as Medicare or Medicaid. Further, digital technologies that demonstrate equivalence to the standard of care may not be reimbursed at a preferred price, as comparator technology may be relatively low-cost. Demonstrating economic value and cost-effectiveness is essential but challenging, as it involves meeting diverse payer requirements. This includes proving that DTx offers a tangible benefit over existing treatments in terms of improving patient outcomes and reducing healthcare costs.

The evolving reimbursement landscape for DTx also presents opportunities for innovation and improvement in healthcare delivery. Some approaches that reflect payers and other key stakeholders exploring new payment and evaluation models include the following.

• Legislative efforts: The Medicaid and CHIP (Children’s Health Insurance Program) Access to Prescription Digital Therapeutics Act, introduced in December 2022, seeks to establish guidelines for insurance coverage of digital therapeutics under government-funded healthcare programs like Medicaid and CHIP.⁴ If enacted, this legislation could streamline the reimbursement process and broaden access for eligible patients.
• Private payer frameworks: Private payers are actively developing evaluation frameworks for digital products and services.⁵ These frameworks assess various factors including clinical efficacy, economic impact, and other criteria essential for making reimbursement decisions. This proactive approach by private payers aims to ensure that DTx products meeting specified criteria receive reimbursement approval, thus facilitating wider adoption. In addition, payers are leveraging tools such as digital formularies and value-based care models to increase access for patients.⁴
• Role of Peterson Health Technology Institute (PHTI): Launched in 2023, the PHTI aims to address reimbursement challenges by conducting rigorous, evidence-based assessments of digital health solutions, including DTx.⁶ These assessments provide insights that can inform reimbursement decisions and may promote the integration of DTx into mainstream healthcare practice.

The access path forward

While reimbursement barriers exist for digital therapeutics, ongoing legislative efforts, development of private payer frameworks, and initiatives like the PHTI are shaping a more supportive environment for DTx. These efforts aim to simplify clinician prescription processes, enhance patient access to DTx, and ultimately drive innovation in healthcare delivery.

DTx manufacturers continue to face an uphill climb, but they should not overlook the opportunities for success. Among key considerations include:

• Partnerships across key stakeholders: Partnerships with key stakeholders such as healthcare providers, technology developers, regulatory bodies, and payers can facilitate enhanced clinical validation, regulatory compliance, and market access strategies.
• Evidence and value proposition refinement: Robust evidence from clinical trials is essential to demonstrate the efficacy, safety, and real-world effectiveness of DTx. This evidence is required for regulatory approval, clinician acceptance, and patient trust. In addition, establishing a clear value proposition that highlights the benefits of digital therapeutics over existing treatments will help in gaining support from stakeholders, including healthcare providers, payers, and patients.
• Timing of launch and market strategy: Launching DTx systems at the right time involves assessing market needs, regulatory landscape, and competitive environment. Timing ensures that the product meets current healthcare challenges and aligns with regulatory requirements. Developing an effective market strategy involves identifying target patient populations, understanding clinician prescribing behaviors, and educating stakeholders about the benefits of DTx.
• Patients at the center: Designing DTx systems with patients in mind ensures usability, engagement, and adherence. User-friendly interfaces, personalized interventions, and patient feedback mechanisms also enhance patient experience and satisfaction. Putting patients at the center involves empowering them to manage their health actively through digital therapeutics. This includes providing education, support, and tools to facilitate behavior change and treatment adherence. Patient-centered approaches can also drive adoption and retention of DTx.

As discussed by panelists at BIO, these considerations are integral to the success of digital therapeutics, impacting clinical validation, market adoption, regulatory compliance, and patient outcomes. Collaborations, evidence-based value propositions, strategic timing, and patient-centric design are essential components for achieving meaningful impact in healthcare delivery.

References

1. Fairfield Market Research (December 2023). “Digital Therapeutics Market.” 
2. CMS. (November 2, 2023). “Calendar Year (CY) 2024 Medicare Physician Fee Schedule Final Rule.”
3. Reinhardt, M. and Regan, T. (October 6, 2021). “Navigating the Payer Landscape for Digital Therapeutics”. PM360. 
4. Congress.gov. (March 10, 2022). Access to Prescription Digital Therapeutics Act of 2022. 
5. Mantovani, A., et al. (February 19, 2023). “Access and reimbursement pathways for digitial health solutions and in vitro diagnostic devices: current scenario and challenges.” Frontiers in Medical Technology. 
6. Landi, H. (October 8, 2023). “HLTH23:: Peterson Health Technology Institute sets out to build clinical evidence for digital health tools.” Fierce Healthcare. 

The BIO 2024 convention is the largest and most comprehensive event for biotechnology, representing the full ecosystem of biotech with more than 18,500 industry leaders from across the globe. This year, BIO 2024 held a panel presentation, “Forging New Pathways to Reimbursement for Digital Therapeutics: Considerations for Payer Coverage,” to discuss the current reimbursement landscape and implications for access to digital therapeutics. Participants in the panel included Dick Soenksen, CEO of Ceresti Health; Beth Rogozinski, CEO of Oncoustics, Chris Koch, CEO of LeGen Medical Devices; and Chief Science Officer Jon Campbell, MD, PhD, from the National Pharmaceutical Council. The panel was moderated by Brigit Kyei-Baffour, Principal at Avalere, part of Avalere Health. Kyei-Baffour leads the digital therapeutics workstreams at Avalere and has deep subject matter expertise in this space. This article summarizes the panelists’ perspectives, exploring the challenges — and the opportunities — for creating a path forward for digital therapeutics.

Brigit Kyei-Baffour is a principal at Avalere, part of Avalere Health. Kyei-Baffour advises companies on issues related to market access, patient support, health equity, and reimbursement strategies for life sciences, digital health, diagnostic, and medical device companies.