Entering 2020, the promising field of digital therapeutics (DTx) has run up against a classic chicken-and-egg puzzle. Payers who hold the keys to commercial success wish to see real-world outcomes data and evidence of potential cost savings from the use of these new treatments. Yet as long as patients and physicians remain uncertain about reimbursement for DTx, companies will struggle to attract users at a scale that would produce the evidence payers seek.
Digital Therapeutics at the Crossroads
Payer perspectives on reimbursement hurdles can help DTx companies map the journey to real-world utilization and market success
DTx innovators have begun to deliver unique therapeutic tools to patients, which may also bring relief to resource-strapped health systems. Programs from Pear Therapeutics, Akili Interactive Labs, Click Therapeutics and others have demonstrated an ability to prevent or help manage a variety of medical disorders. Persuaded by data from randomized controlled trials (RCTs), regulators in the U.S. and Europe have approved some of these products to augment or replace more traditional therapies.
Investors, including biopharmaceutical companies, have funneled billions of dollars into DTx. And payers themselves have warmed to the new category. Express Scripts, for example, has launched the industry’s first formulary for digital and mobile health apps and devices.
Nonetheless, the user base for DTx is not growing as quickly as experts once anticipated. And, in recent months, several closely watched DTx companies have encountered pushback from regulators, investors and large pharmaceutical partners—a reminder that the sector is still experiencing birth pains.
Many market observers say physicians won’t recommend DTx to their patients until there is greater clarity around coverage and reimbursement. In fact, DTx are unlike any other medical products. With most prescription drugs, there’s a clear sales chain from manufacturer to wholesaler to retail pharmacy. The doctor then writes a scrip, the patient fills it at the pharmacy and the health plan pays.
But with DTx, who verifies that the patient has downloaded the therapeutic program, and what party adjudicates the claim? How does the payer learn if iterative software updates are having an effect on medical outcomes? What is the process for ongoing collection and assessment of data? Should there be a “digital benefit,” separate from the pharmacy and medical benefits? Early experiments in digital formularies may begin to shine a light on these matters, but many perplexities remain.
What payers think
To better understand how U.S. payers look at the hurdles facing DTx, Syneos Health surveyed 35 pharmacy and medical directors at national and regional managed care organizations, pharmacy benefit managers (PBMs) and payer functions at hospital systems and integrated delivery networks (IDNs). Our research documented a groundswell of payer interest in DTx—but with many asterisks.
In the survey, nearly one-quarter of respondents said they already provide DTx coverage in some form, and an impressive three quarters said they would do so in the next two to five years. Only 3% said they are unlikely to cover DTx in the foreseeable future.
However, the majority also admitted to considerable confusion regarding DTx. Barely one-half of respondents agreed or strongly agreed that they had a consistent definition of the term, and just 28% strongly felt their organization had a consistent framework for reviewing DTx and making coverage decisions. Is lack of coverage—or uncertainty around reimbursement—limiting DTx utilization? More than half (57%) agreed or strongly agreed that it is.
Outcomes in the real world
For many payers, real-world utilization is the crux of the matter. If asked to review the case for coverage of DTx, 94% said real world evidence would be an important evaluation criterion, and 43% of that cohort deemed it “extremely important.”
Utilization is paramount for all classes of DTx, but it presents a particularly tricky barrier for behavioral health-related central nervous system (CNS) conditions, where much of the early DTx strategy and capital formation has concentrated. People struggling with bipolar or major depressive disorder, schizophrenia or substance abuse issues are often protective of their privacy— sometimes in the extreme.
A number of behavioral health DTx companies with business to- consumer commercial models, such as SilverCloud Health in the U.K., have built real-world user bases of more than 100,000. But others—especially those pursuing a prescription-driven, business-to-business model—have encountered headwinds.
They have found that individuals with serious behavioral health conditions may agree to download programs to their phones and submit to monitoring in a supervised clinical trial setting. But they will react differently in unstructured, real-world settings. Many will balk at texting with an unknown organization, downloading unfamiliar software to a personal device or punching in codes. If such patients don’t activate the programs, there’s no outcomes data for payers to scrutinize.
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