What are digital therapeutics, and how do they work?
Digital therapeutics have generated a great deal of recent attention throughout the healthcare industry, with some sources declaring them the “next big thing” in healthcare. With the potential to induce lifestyle changes, enhance medical treatments, and reduce healthcare costs, digital therapeutics have a lot to offer to consumers, providers and payers.
Read on to learn more about this growing field, its potential applications, and where the market is expected to go over the next few years.
What are digital therapeutics?
Digital therapeutics, also known as “software as a drug,” involve the use of digital tools or systems to treat medical conditions. In digital therapeutics, digital technologies such as apps, devices and software are used to treat patients in the same way drugs, surgeries or medical devices are applied therapeutically. Digital therapeutics may be used as stand-alone treatments or as part of a broader treatment program that incorporates both digital and non-digital (conventional) therapies.
How are digital therapeutics used? What are the benefits?
Digital therapeutics have several strengths. First is the ability to create or support behavioral changes and lifestyle management. An emphasis on patient support, engagement and wellness makes it possible for digital therapeutics tools to focus on both management of diseases like asthma or diabetes, and lifestyle changes intended to maintain wellness and prevent illness. In addition, many digital therapeutics modalities are relatively inexpensive, making them an attractive and viable option to help address skyrocketing healthcare costs. And finally, they tend to be more scalable than many conventional treatments.
Molecular Life explains that many digital therapeutics initiatives “can be used to support treatment and as lifestyle tools to help manage health and well-being.” Additionally, digital therapeutics provide information that can be used alongside face-to-face care. The piece concludes that digital therapeutics “are proving highly effective” at disease management and prevention, offering solutions that are scalable, cost-effective and empowering to patients.
A Forbes Entrepreneurs blog piece also emphasizes digital therapeutics’ “impressive ability to change behavior,” as well as their relative affordability. Behavior change is a major challenge in healthcare, but it is “vital to progress against two major challenges facing healthcare in developed countries: chronic diseases, which drive over 80% of U.S. healthcare spending are strongly rooted in unhealthy behaviors, and poor drug compliance, a $300 billion problem in the U.S.” The piece discusses several studies demonstrating the effectiveness of digital therapeutics, concluding that digital therapeutics are as or more effective than conventional therapies, are more scalable than drug-based therapies or human providers, and are highly cost-effective, in addition to effectively tackling the challenges of behavior change.
Healthegy considers digital therapeutics to be a critical part of value-based healthcare, functioning as “a key component of value-based medicine’s road to success, demonstrating new ways to effectively marry health care and cutting-edge technology.” The piece provides several examples of digital therapeutics initiatives, including studies that demonstrate effectiveness in both wellness programs and disease treatment and management.
What’s happening in the digital therapeutics market?
The digital therapeutics market has been heating up lately, and investors, analysts and healthcare stakeholders are taking notice.
A July 2016 RnR Market Research report predicts that the digital therapeutics market will reach $457.9 million by 2021, from $110 million in 2016, a CAGR of 27.7% (full report requires purchase). Major factors contributing to this level of growth include increasing incidence of chronic diseases, rising focus on preventive healthcare, technological advancements, growing need to control healthcare costs, significant increase in venture capital investments, and the benefits of digital therapeutics, as well as government initiatives to support the development and implementation of digital therapeutics solutions. Baker & McKenzie, meanwhile, predict continued growth in venture capital in the areas of digital therapeutics, data and analytics, and diagnostics, particularly in the Asia Pacific region. Venture capital funding grew globally from $1.1 billion in 2011 to $4.5 billion in 2015.
mHealth Intelligence paints a similarly rosy picture, predicting that digital therapeutics are “poised to take healthcare by storm” and will become a $6 billion industry within 5 years. The piece describes recent market analysis, current digital therapeutics initiatives (including the CMS-based Medicare Diabetes Prevention Program), and key factors contributing to the rise of digital therapeutics programs. The article also points out that companies in the digital therapeutics arena are emphasizing clinically validated solutions, relying on clinical trials data and regulatory approvals to help legitimize and validate their platforms so that consumers, providers and payers will embrace these new solutions, incorporate them and support reimbursement for digital treatments. Digital therapeutics have also been identified as potential disruptors in healthcare, and as the “next big thing” in both digital health and healthcare more broadly.
A LinkedIn Pulse post, for example, presents the theory that digital therapeutics could be the “next specialty pharma”—that is, the next potential explosion in healthcare that will elicit major changes and create new treatment paradigms. The post focuses on payment, since the forthcoming wave of digital therapeutics will require attention to payment, reimbursement, formulary rules and cost sharing. The piece points out that “behavioral therapy is surpassing pharmaceutical intervention as first line therapy,” perfectly aligning with digital therapeutics’ success at creating behavioral changes.
A Medullan blog post, “Why the Digital Therapeutics market is posed for epic takeoff,” predicts that in ten years, healthcare providers will prescribe digital therapeutics more often than pharmaceutical or biologics for some chronic conditions. The post outlines a number of reasons for this. First, digital therapeutics—due, again, in large part to the capacity to create behavior changes—is a growing field ready to gain serious traction within the healthcare industry. Second, a “perfect storm of need and capability” has garnered attention and investment for digital therapeutics companies, which will likely become even more prolific as a result. Third, large life science companies have seen the trend coming, and many have created innovation groups; a number of companies are listed in the piece, each of which has already made an impact in the field of digital therapeutics. And finally, digital therapeutics offer behavioral change that not only treats health problems, but seeks to build long-term healthy habits; the piece predicts that “[b]y supporting patients more effectively outside of clinical settings and capturing the data required to enable valuable patient-provider dialog, digital therapeutics will gain prevalence as the most effective treatment to some of the world’s rare and most common diseases.”
Digital therapeutics do indeed seem poised for considerable growth over the next few years, and wider adoption of relatively inexpensive, non-invasive, behavioral support methodologies is likely to gain in popularity among patients, payers and providers. A number of companies and digital therapeutics initiatives are already underway, and as the body of clinical evidence grows in support of these new treatment methods, further investment stands to boost the market even further.
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