Digiceuticals sounds like nonsense the first time you hear it. But it’s actually a term you’ll want to remember, particularly if you’re working in the pharmaceutical sector.
Referring to digital therapeutics, digiceuticals is quickly taking off as a treatment for a number of conditions, particularly chronic diseases and neurological disorders. Digiceuticals are most commonly seen as an alternative to traditional pharmaceuticals, but can, in the case of clinical trials, be used in conjunction with them.
Their potential is attracting attention and investment from all corners of the healthcare, technology and pharmaceuticals markets. According to numbers reported by the Financial Times, deals involving digital health focused companies brought in $3.4 billion in investment in the first half of 2018 alone, on pace to pass 2017 in terms of dollars and the number of investments.
Furthermore, the market for digital therapeutics is not expected to cool any time soon, with Grand View Research estimating the market to be valued at $9.4 billion by 2025, boasting a continual annual growth rate of 21%.
This idea of self-care solutions is attractive to healthcare providers to increase efficiency and healthcare payers looking to decrease cost. Solutions typically have therapeutic, diagnostic and surveillance use cases, the number of which is steadily rising, but the path to pills informing pharma research and development or even replacing traditional medications faces a few big obstacles to widespread adoption.
Defining and Differentiating Digiceuticals
For pharma players, buying into digiceuticals at this early stage is important for a number of reasons, but one major aspect of it is to control the direction the industry goes in. A report from McKinsey & Company identified two of the biggest impediments facing digiceuticals and they are two areas where pharma companies can help push the influence of this technology.
The first is separating digital therapeutics from the health and wellness applications that have flooded the market. According to the McKinsey report, there are more than 318,000 health-related apps available to consumer. The task for digital therapeutics companies is demonstrating real clinical value and separating themselves from those with exaggerated clinical benefits.
A clearer definition of digital therapeutics that will allow regulators to distinguish these products from wellness offerings the same way they distinguish over-the-counter drugs from prescription drugs is the first step. This definition would include requirements such as controlled trials and ongoing clinical research to ensure digital therapeutics met standards for safety, value and effectiveness.
The U.S. Food and Drug Administration has already begun evaluating these products and attempting to encourage innovation through the creation of the Digital Health Unit. With its primary role of assessing digital therapeutics in a way that can keep up with the speed of innovation, the unit created the Pre-Cert for Software Pilot Program, aimed at reviewing tech developers and certifying that they meet the FDA’s criteria for design, development, validation and maintenance of these products.
Having started this process, the FDA began to approve specific products as well. One example comes in the form of reSET, the culmination of a partnership between pharma firm Novartis and Pear Therapeutics. The product is a software-only substance abuse treatment that aims to alter the behavior of addicted populations. The company now believes that the same methodology may prove effective in helping diabetics manage their condition better.
Incentivizing the Healthcare System
The second obstacle facing digital therapeutics is the healthcare system itself. There is little in the way of incentives for healthcare providers and payers to adopt digital therapeutics. In fact, from the provider perspective, these platforms will merely add additional tasks to their workflow if the right analytics platforms are not provided.
Each of these platforms creates another mountain of data that has to be monitored and analyzed so that it can be actionable and inform a provider’s decision-making process. That typically takes time, to say nothing of the cost involved to implement such systems and the potential loss in revenue for behavioral intervention systems that carry less clinical risk and doors to self-care that don’t require a healthcare professionals involvement.
For insurers, the cost may not always be comparable to other treatments and that causes an issue in reimbursements. The benefits of any digital therapy have to be measured and clearly show improved outcomes within a reasonable time frames, something that may not always be possible with chronic conditions such as diabetes, where care is ongoing throughout the patient’s life. It’s not common for an individual to remain with the same insurer throughout their life, meaning an insurer who invests in digital therapeutics now may never see the cost savings on the patient’s long-term health outcome.
While some progress has been made in addressing through alternative payment models, the McKinsey report highlights that more success in employer health plans, where employers capture savings through preventing a loss in productivity due to absent employees with health problems and low morale.
Single payer systems could also benefit employees as they tend to insure a patient throughout their lifespan, making digital therapeutics worth the investment as health systems will see the benefit in the long run.
The Challenge for Pharma
While digital therapeutics could prove beneficial for pharma companies in several ways, they also present a challenge to the way they currently do business. For one thing, there’s a drastic difference in the speed to market from the R&D phase to a viable product between traditional pharmaceuticals and digital therapeutics. A drug typically takes as much as 10 years to become commercially available, whereas digital therapeutics happens in a much quicker time frame, meaning pharma companies would have to adopt a new, more Silicon Valley-esque approach to the work.
Additionally, pharma companies are used to enjoying a patent on their products that will likely be unavailable for digital therapeutics due to the nature of the business and speed of innovation in the tech sector. Small changes to a service will get around patent infringements as will adding new technology.
Possibilities for Pharma and Healthcare Industry at Large
Instead of looking at the challenges, many in the pharma sector are looking at the possibilities. Whether it’s the level of insight digital therapeutics can provide into how medicine is consumed to the supply of real time data regarding its effectiveness and potential to reduce the cost and complicated nature of clinical trials.
The healthcare industry’s ultimate goal of personalizing care has found an ally in the digital therapeutics market, with much of its offerings falling under the umbrella of patient support programs (PSPs).
For #digitaltherapeutics, positive outcomes are often a direct result of behavior change, which is a result of continuous engagement, which is a result of great #UX. Great UX drives digital adherence. #DigitalHealth
— Adam Falat (@adamfalat) August 15, 2019
The increase in value-based reimbursements has led to payers wanting more sophisticated outcomes data, something digital therapeutics can deliver.
And it’s not going unnoticed. S3 Connected Health and eyeforpharma teamed up to survey leaders in the pharma sector on their company’s embrace and use of digital therapeutics. Of them, 24% said they were investing in what the industry calls next-gen PSPs. Only 10% said they were making no investment at all.
Some of that investment is coming in the form of partnerships with third party tech firms. This allows pharma companies to leave innovation cycles, data management and product ownership to firms that are better set up for success in the tech sector.
But beyond investment is the perception of digiceuticals. Momentum is in their favor according to the survey. Of the respondents, 40% said these kinds of patient support programs were a path toward making medicine more holistic while 38% called it the primary way to support patients.
