Dive Brief:

• Pharmaceutical companies have increasing incentive to partner with digital therapeutics startups, but payers and other stakeholders are still getting on board with the criteria and benefit shaping the treatment category, according to a report published Monday by digital health venture fund Rock Health in partnership with ZS Associates.
• Researchers interviewed executives across 27 major pharmaceutical, digital therapeutics (DTx) and health insurance companies, including Merck, Johnson & Johnson, AstraZeneca and Bristol-Myers Squibb; Pear Therapeutics, Akili and Omada Health; and BlueCross BlueShield, Cigna and Humana.
• The report concluded successful pharma-DTx partnerships will require alignment on the definition and opportunity of digital therapeutics, the belief that digital therapeutics require pharma-caliber clinical evidence, and prioritization of business-to-business strategies to reach patients at scale over direct-to-consumer models.

Dive Insight:

Digital therapeutics, a relatively new category, is viewed by payers and some others in industry as a gray area, but Frost & Sullivan predicts the category will experience a compound annual growth rate of 30.7% between 2017 to 2023.

The Digital Therapeutics Alliance, an industry group that includes traditional players like Bayer and Merck & Co. and new entrants like Pear Therapeutics says the category involves evidence-backed, software-driven and delivered interventions meant to complement medications, medical devices or other therapies, or sometimes function as a standalone treatment.

The treatments frequently require a prescription and can target prevention or management of a range of conditions, often chronic diseases, while collecting real world evidence. Examples include companion apps or high-tech drug delivery systems aimed at maximizing patients' drug adherence and otherwise enhancing drug course outcomes.

A recent study in Nature indicating few mental health-oriented apps make scientific evidence available to back up quality claims emphasized the need for DTx companies to differentiate themselves.

One way to do that is pursue FDA clearance, like in the case of Pear Therapeutics, which brought its app-based products addressing substance and opioid use disorders to market alongside Novartis-owned Sandoz. The company is also a member of FDA's Pre-Cert program pilot, which could have big implications for how digital therapeutics go through premarket regulation going forward.

"We see these as any other medication or any other therapeutic device where it's a prescription product and it's accessed and used as part of an overall treatment paradigm, including reimbursement," Pear Chief Medical Officer Yuri Maricich told MedTech Dive earlier this year.

FDA has also lent support to certain digital therapeutics through its Breakthrough Device program, awarding the designation to autism spectrum disorder DTx developer Cognoa and Alzheimer's disease DTx maker Dthera. The latter last week said it's seeking partnerships to move its product to market, on the heels of the failure of Biogen's aducanumab and an FDA advisory committee a negative ruling on a De Novo application for an Alzheimer's device last month.

While Rock Health notes that pharma-caliber clinical studies will be key if pharmas and DTx companies want other stakeholders to equate the therapies to medicine, the convincing, long term data isn't there yet in the view of many payers. Payers interviewed saw the potential to encourage good patient behaviors, but expressed doubt that DTx could be considered the treatment itself.

"Skepticism of emerging solutions among health plans is not unique to digital therapeutics — but health plans nonetheless play a crucial, gatekeeper role in in the adoption of digital therapeutics," the report said.

A 2018 McKinsey analysis called out similar obstacles. "Therapies with little real-world evidence to support actuarial claims will need time and significant investments to establish their worth," adding it could take decades to prove the value of the tools in chronic disease in longitudinal studies.