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Digital therapeutics currently account for a small part of the ever-expanding digital health landscape, but the impact that this emerging product category will have on healthcare is expected to be considerable. FirstWord MedTech spoke to three digital therapeutics companies - Voluntis, Pear Therapeutics and Akili Interactive, each notable for pushing the boundaries in this space - about the progress they are making in addressing the key challenges that stand in the way of this new class of medical interventions becoming mainstream.
The noise around digital therapeutics is the loudest it has ever been, with 2018 having seen a sharp ramp-up in activity among the players in this nascent-but-fast-growing segment within the digital health market.
For those who are still unclear as to what constitutes a digital therapeutic, this is a therapeutic software designed for use either as a companion to traditional pharmaceutical treatments, augmenting the value of the latter and improving clinical outcomes; or as a standalone therapy to potentially replace traditional pharmaceuticals. Digital therapeutics also differentiate themselves from other health-related software products as well as the fitness and wellness apps that are proliferating the digital health landscape, in that they are clinically validated in randomised clinical trials and reviewed by the same regulatory authorities that assess pharmaceuticals or traditional medical devices for marketing approval. Almost all digital therapeutics are available only through prescription.
Big pharma’s increasing recognition of the value - and even potential competitive threat - of digital therapeutics to the healthcare paradigm has led to a notable acceleration in commercial partnerships forged between traditional drug companies and digital therapeutics developers.
For example, Pear Therapeutics, the first company to get a US FDA-approved standalone prescription digital therapeutic (PDT) for substance use disorder (SUD) in 2017, sealed deals with Novartis’ subsidiary Sandoz last April to commercialise this SUD therapy, reSET, and also for its second PDT, reSET-O for opioid use disorder, which subsequently got FDA clearance in December. Novartis has also taken a bite of Pear’s pipeline, signing an agreement in March to help advance the latter’s schizophrenia and multiple sclerosis products through clinical trials and onto commercialisation.
Other pharma companies that are getting involved in this field include AbbVie, which announced in December a partnership with Voluntis - one of the first companies to market with a CE marked and FDA-cleared companion digital therapeutic for type 1 and type 2 diabetes patients - to develop digital companions for use within immunology. Voluntis also extended its partnership last year with AstraZeneca for the use of the former’s digital companion to support treatment of platinum-resistant ovarian cancer patients.
At the start of this year, Japanese drug company Otsuka said it has teamed up with Click Therapeutics to develop Click’s CT-152 mobile application as a standalone PDT for treating major depressive disorder.
And there are more digital therapeutics expected to emerge from various companies’ pipelines this year and enter the market, other "firsts", such as Akili Interactive’s AKL-T01 video game-based therapy for attention-deficit hyperactivity disorder (ADHD).
So has digital therapeutics reached a tipping point where we will see these treatments gain more significant traction in medical practice?
Possibly, although digital therapeutics companies like Voluntis, Pear and Akili all recognise that there are significant bumps in the path ahead that still need to be smoothed out.
Rolling on with reimbursement
For any new product going into the market, be it drug, device or digital therapeutic, one major determinant of its successful uptake is reimbursement and what pathways there are - or not - for payer coverage.
Some progress is starting to be made in this area. Voluntis inked its first US payer partnership last year with WellDyneRx for Insulia, its FDA-cleared and CE-marked digital companion for type II diabetes patients treated with basal insulin. Additionally, the company told FirstWord MedTech that both Insulia and Diabeo, the digital companion for type I and II patients on a basal-bolus treatment, are reimbursed in France, one of the very few - if not the only - countries in the EU that have some level of reimbursement for digital health products.
And Pear Therapeutics’ chief commercial officer Alex Waldron said the firm and its partner Sandoz are working towards getting reimbursement for reSET and reSET-O this year with as many major payers in the US as possible.
The misconception, it appears, is that the wheel needs to be reinvented in terms of reimbursement for digital therapeutics and that this class of products need to have a new framework for funding.
Pear’s Waldron explained that the reimbursement model for the company’s PDTs "looks very similar in many ways to what there is for pharmaceutical products."
"A prescription is written by the physician, and the reimbursement goes through the contracted payer group and the contract payer reimburses for the PDT, much like they would for a pill or protein," he said.
Acceptance of digital therapeutics by payers is driven by the fact these products have undergone clinical trials and demonstrated efficacy outcomes that not only legitimise the therapy to the regulator but also the reimburser.
"In the eyes of a payer, if you were actually able to produce an efficacy outcome that has a measurable effect on patients that are in need, they can really look at this from a reimbursement perspective the same way that they look at the treatment outcomes they’d expect to see for a traditional drug therapy," said Waldron.
Furthermore, the very nature of digital therapeutics - with data being at the core of how these products function - could facilitate broadening of reimbursement coverage once the initial groundwork is laid down.
"Digital therapeutics natively collect data that can be used to assess the performance of the products," said Pierre Leurent, Voluntis CEO and the co-founder of the Digital Therapeutics Alliance. "For example, with our diabetes products, Insulia and Diabeo, we are collecting blood glucose readings everyday to help our patients reach their goals. It is very easy to extract that data and assess whether the patient is benefiting from the intervention and that can be tied to reimbursement. So the reimbursement process can be very aligned between payers and digital therapeutics companies and there’s opportunity for some outcomes-based contracting. It’s a nice way to catalyse the payment decision-making process."
Waldron agreed, adding that the data harvested from digital therapeutics when used in the real world could "make a compelling case on a real-time, longitudinal basis to the payers to actually show them what kind of efficacy we are seeing for any given patient, and to justify reimbursement coverage."
Commercial model: not always bound by pharma tie-ups
As noted earlier, many digital therapeutics companies partner with pharma players to leverage the latter’s established infrastructure in commercialising these therapeutic apps and software. And pharma firms, in turn, are keen to add digital products that complement their offering. But is this necessarily the only or the best commercial route available for digital therapeutics developers?
"It depends," said Voluntis’ Leurent. "We do see very good complementary opportunities and synergies between digital therapeutics and pharma and that is the foundation of our various agreements [with pharma companies]. We have a strong technology/regulatory expertise as a starting point, but pharma knows how to commercialise at scale these kind of innovations and they can help with clinical development."
However, that does not mean that Voluntis has not made any efforts towards establishing their own sales infrastructure. "As we move forward in the space, we have been able to attract more and more funding along the way and this has enabled us to develop more of our internal capabilities, such as medical and market access expertise. So on the one hand, we partner with pharma, but we have also increased our direct efforts, especially in the US, to interact with payers and providers," said Leurent.
Akili Interactive is an example of a digital therapeutics company that is seeking to thrash out a commercial path of its own from the get-go. Akili CEO Eddie Martucci recently disclosed at CES 2019’s Digital Health Summit that the company was building its own distribution platform for commercialising its ADHD product once it is approved.
He told FirstWord MedTech that the company wasn’t opposed to partnering with pharma and that this approach would make sense for specific disease areas and for digital companion products that are designed to be used in combination with a drug. "We just don’t believe that [partnering with pharma] should be the default position for a digital therapeutic like ours, which is dramatically different than anything on the market today - from its mechanism of action and its delivery vehicle to the kind of data, communication and relationship it enables with our customers. When you have something new, you want to maximise that from the ground up, and not make it necessary to rely on the existing systems," Martucci said. "The potential of a digital therapeutic goes far beyond the software or device. If we rely on the traditional infrastructure used today, we may not capitalise on the opportunity to create a different kind of experience for patients, fully leverage the vast data coming from our products and services, and build the kind of unique partnership we want with our customers."
And while Pear has pursued the pharma partnering-strategy for reSET and reSET-O, Waldron said it might explore a self commercialisation model for the third product to emerge from its pipeline, a PDT for insomnia. "The insomnia market is a very large one and I can’t imagine a situation where Pear would have a 3000-person sales force [like a big pharma company would have]. But there are also very specialised ways in which insomnia is treated in a more concentrated fashion," he told FirstWord MedTech. For these types of assets where the PDT can be introduced to market in "that concentrated fashion", without the need for a huge operational force, Pear would consider selling direct to the customer.
Education, education, education
With digital therapeutics market still at its nascent stages, there remains a lot of work to be done in educating stakeholders in the healthcare ecosystem about this class of products.
Digital therapeutics developers don’t just need to get buy-in from payers who are paying for the product, but also from the providers and the users.
"We're creating a new treatment class, which means we need to educate physicians and patients in terms of how their smartphone can actually help them do better clinically. So that's one thing that we're going to do is to keep educating them on the new modality," said Waldron, who added that this paradigm shift is not unfamiliar in healthcare. Prior to joining Pear in 2017, Waldron had worked in the biotech sector and seen the impact of practice-changing therapies coming into the market. "This is something that pharma and biotech have faced in the past. When the injectable proteins came out, we had to teach people, instead of swallowing a pill, how to inject a therapeutic. Now, instead of a pill or an injection, we’ll be teaching how to use your smartphone to clinically modify the way in which your brain works.
Martucci believes that patients should be central to any go-to-market strategy for a digital therapeutics company. "It’s important for [Akili] to really partner with patients and commit to learning what will make our effective treatments truly beneficial in the market."
Unlike traditional drug therapies, where patients play a more passive role and are only expected to take their drugs in the right quantity and at the right time, digital therapeutics require far more patient engagement in order to make a significant impact.
Voluntis’ Leurent acknowledged that there needs to be a certain level of patient stratification to determine who would be the primary users and beneficiaries of digital therapeutics. He gave high cholesterol as an example of a health condition where the patient might have this condition, but they don't feel physically unwell. Yet if left unmanaged, high cholesterol can have very serious consequences. "So the disease is asymptomatic [for the most part] and in this case, can you have an engaged patients?" Would a patient who feels fine still adhere to the regimen of a prescribed digital therapeutic? "These are the questions you might have when deciding which therapy areas your digital therapeutic can make a significant impact." It’s a multi-factorial assessment; you need to look at whether the patient is capable of managing their disease, what stage of disease they are at, and even whether the patient is digitally-savvy, Leurent said.
The road ahead for digital therapeutics is not without its challenges. Companies like Voluntis, Pear and Akili, as well as familiar names like Welldoc, Propeller (now part of ResMed), Big Health and Omada, are in the vanguard of this continuously growing community which has been attracting a lot of interest from the pharma sector - which is likely to face the biggest disruption from the advent of this new class of treatments - and from investors.
Investor confidence in the potential of this field is strong, as evidenced by the generous influx of capital. Voluntis proved there is public investment appetite for digital therapeutics by being the first in this field to launch an IPO on an international stock exchange - it raised just over 30 million euros ($34 million) on the Euronext Paris in May. Pear raised $50 million in series B financing last year and topped this up with a $64-million series C, each time bringing in new investors.
This financial backing should help buoy these players and other established and emerging digital therapeutics companies while they continue laying down the pathways needed to help this market soar at first take-off.
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