Dive Brief:

• The lack of clarity around payment pathways is preventing digital therapeutics companies from getting treatments to patients, according to Forrester Research.
• After interviewing digital therapeutics companies, Forrester compiled a strengths, weaknesses, opportunities and threats analysis that identified reimbursement uncertainty as a key barrier to uptake of the products.
• Coding changes and the creation of digital health formularies are positives for the sector, while the analysts say further clarity is needed to gain provider adoption and increase patient access.

Dive Insight:

Digital therapeutics deliver therapies using smartphones and tablets. It’s been almost five years since Pear Therapeutics became the first company to get clearance from the Food and Drug Administration for a prescription digital therapeutic: its reSET substance-use-disorder product. Like other products from Pear and its rivals, reSET uses mobile devices to improve access to cognitive behavioral therapy (CBT).

In theory, the products can remove barriers to care, enabling people who are unable to meet a therapist in person for reasons of cost or geography to access treatment. Still, the industry so far hasn’t generated significant revenues, with Pear’s sales totaling $4.2 million last year.

Forrester identified reimbursement as a headwind, calling it “the most frequently discussed topic among interviewees.” The market research firm found “the path to payer approval is arduous and ill defined,” adding that the ambiguity pushes companies to go direct to employers and consumers. 

Despite those problems, Forrester said the “tides are changing,” pointing to the creation of codes that cover remote CBT and prescription digital behavioral therapy by the American Medical Association and Centers for Medicare & Medicaid Services as positive for the industry. 

If the sector can overcome the weaknesses, which extend beyond reimbursement to cover “middling adoption” by users and the prevalence of “snake oil” treatments in the broader digital wellness space, the analysts said they see opportunities for digital therapy to offset clinician shortages, digitize healthcare and support a more proactive approach to the management of chronic conditions.

The threats include cybersecurity and “acquiring a stigma as a failed category if the institutional commitment waivers,” the researchers said.