Catapulted from relative obscurity to mainstream status by COVID-19, telemedicine has obvious limitations in treating disease, but the emerging world of digital therapeutics is changing that.
This nascent field is the next step for telemedicine, in which software and apps running on consumer electronics like smartphones, tablets and virtual reality headsets can be ePrescribed, delivered and used by patients to treat illnesses from behavioral health to diabetes, digitally.
At the lead is the Digital Therapeutics Alliance (DTA), an Arlington, Virginia-based advocacy group whose CEO, Andy Molnar, told PYMNTS that with 23 approved digital treatments available and more headed for review by the Food and Drug Administration (FDA), recognition as a covered treatment modality by the Centers for Medicare and Medicaid Services (CMS) will open the door to reimbursement for these revolutionary treatments by insurance plans.
Asked what a digital therapeutic is, Molnar said, “I’ll use [the] example of insomnia. You start with Calm. It’s a mobile health app. It’s very relaxing, [but] mindfulness is not something that the FDA regulates. So, for right now, Calm is a nice app that a lot of people use who probably have lower anxiety and things like that. [But Calm] can’t make a claim to say, ‘We can help you fall asleep,’ or ‘We can help you maintain sleep.’ What [they] need is clinical validation.”
Showing how this is progressing, Molnar said a similar digital therapeutic app, Sleepio from Big Health, has not yet been cleared as a prescription therapy by the FDA, but it has enough clinical evidence to prove its product helps patients sleep.
“Because they’re not FDA cleared, again, they won’t make a claim,” he explained. “They won’t say precisely, ‘We cure insomnia,’ but we consider them a digital therapeutic because their data is so robust.”
He said the largest digital therapeutics categories today are in mental health, diabetes, musculoskeletal diseases and chronic respiratory problems. All will want that FDA stamp.
Not only is the FDA approval important for product safety and legal reasons, it’s also one of the bridges to cross so that Medicare and private health insurance will reimburse doctors for using these interventions. That’s what’s needed to get payments flowing into new digital treatments.
Making It Safe — and Profitable
Noting that telehealth apps (including video tools like Apple FaceTime) are not FDA approved and yet are in wide use by doctors, it shows how the outlines of this sector are being defined.
“The software itself in telehealth is not treating a disease, it’s still the doctor that’s treating a disease,” he said. “Then there’s mobile health, and that is just a sea of wild, wild west when it comes to healthcare, because you’re talking 400,000 to 500,000 mobile health apps.
“We’re at a point now where that is actually dangerous to the patient. Think about treating your diabetes with an app that is not FDA regulated or is not clinically validated. There’s a lot of downside.”
As there is no Medicare benefit category or coding for digital therapeutics yet — and thus no government payments offsetting its use and nothing for private insurers to steer by — Molnar and the DTA are prime supporters of the Access to Prescription Digital Therapeutic Act, a bipartisan and bicameral bill introduced in March by Reps. Mike Thompson (D-Calif.) and David McKinley (R-W.Va.) and Sens. Jeanne Shaheen (D.-N.H.) and Shelly Moore Capito (R-W.Va.).
“That would create the ability for us to get coding either for individual products or at least by disease state or disorder, and allow CMS to simply look at the clinical data and decide if they want to pay for it, which is what we want to get to,” Molnar said.
He added, “We want the underlying mechanics and plumbing to be there so when you go to a commercial payer or a government payer, instead of them saying, ‘Where do I cover this? How do I do this?’, instead they can just say, ‘Is the clinical data good?’”
The Congressional Budget Office (CBO) is working on a score for the bill, he said, “Which will tell us what Medicare and CBO thinks it will cost over the next 10 years. That will be very telling,” adding that despite cooling in venture capital this year, “We’re still trending upwards, meaning [that] even though 2021 was an outlier,” investment continues in this emergent space.
Creating a New Healthcare Sector
Molnar was previously an executive with Pear Therapeutics, one of the major digital therapeutics firms, where he worked on some of the basic issues around getting digital therapeutics into the pharmacological mainstream and discovered there’s still work needed.
“When I started at Pear Therapeutics four and a half years ago, I said, ‘How do you ePrescribe an app?’ Everyone was focused on everything other than that … so I went to the NCPDP, which is the National Council for Prescription Drug Programs, and we started talking through the difference between software and a physical object because they had figured it out for med devices years ago,” he said.
Saying the NCPDP approach “really fit in nicely,” Molnar added, “There were still all these ancillary pieces. If you ePrescribe Walgreens or CVS down the street, what do they do with it?”
That brought him back to issues of “the plumbing and the mechanics” not yet being in place to support widespread use of digital therapeutics, but various parties are working on it.
“A lot of companies have started what feels like a specialty pharmacy distribution network, and other companies have more of what feels like [a] durable medical equipment [model], where they ship the whole tablet to your house,” he said. “Instead of you downloading the app, you get a headset, or you get a tablet, you turn it on and it starts walking you through everything.”
Likening it to an unboxing video one might see on YouTube, Molnar said, “It feels very much like packaging along those lines. It keeps it really simple. Then downloading onto your phone, you usually get in touch with someone who has to give you an access code or something like that.
“Even with that, we’re still looking at that infrastructure of how you bill a payer, how the pharmacy gets reimbursed, how it gets back to the manufacturer. It’s almost outside of the digital realm. I hate to say this, but a lot of these products are getting prescribed by fax.”
That’s a bit sad, but not for much longer, as Molnar said, “Awareness is up, but on top of that, at the DTA, we just started a patient advisory group. We [also] have clinical advisory group or provider advisory group, and a payer advisory group. They know digital therapeutics are coming.
“The early adopters are those who say, ‘This is something we need to figure out, so let’s start with the products we have the most faith in because of their data.’”