By Kristy Lindquist, Partner
The digital therapeutics (DTx) market has become increasingly mainstream across the past decade and has experienced increased momentum during the COVID pandemic. As a unique channel in the broader digital-health ecosystem, the DTx market has been steadily growing. In May 2019, Juniper Research predicted a 1,000% growth trajectory over the next five years, to more than $32 billion. Additionally, in 2019, the FDA launched a pre-certification program and other policies to provide a streamlined path to software product approval.
Last year, Somryst, a prescription digital therapeutic combining cognitive behavioral therapy and personalized sleep restriction, was the first software product to pass through the FDA's early Pre-certification Program pilot. Since this pilot, and exacerbated by the COVID crisis, DTx companies are attracting even more attention as cost-effective solutions to the financial, medical and psychosocial challenges heightened by the pandemic.
DtX brings many advantages to the evolution toward value-based care and the goals of the Triple Aim:
- Improving patient experience: With digital capabilities like engaging apps or sending notifications to impact patient behavior change, such as medication adherence for conditions like diabetes, DTx provides guidance for more home, self, and social care, and may eliminate ambulatory episodes such as additional physician office visits or contacts. By offering a more consistent and data-driven tracking of care, the patient experience is less fragmented and frustrating. The result is care continuity and real-time reporting and tracking of delivery of care history and preferences, with benchmarking for improvements.
- Reducing the cost of healthcare: Development of DTx is less costly, and in many cases, as clinically effective as pharmaceuticals. Better Therapeutics released a study on DTx behavioral interventions focused on lifestyle that are both clinically advantageous and cost-effective. Estimated cost savings were $145 per patient per month (PPPM) in diabetes, and $97 PPPM in hypertension, with across the board reductions of 22-29% in total medical costs. These savings result from the DTx directly addressing behaviors and lifestyle factors that are the root causes of disease, reducing the ongoing need for prescription medications. Potential cost savings increase substantially (30-60%) in moderately severe to severe patient populations.
- Improving population health: Current digital therapeutics startups treat a range of conditions including Type 2 diabetes, Alzheimer’s disease, anxiety, post-traumatic stress disorder, depression, asthma, and congestive heart failure. DTx empowers the entire healthcare community—patients, providers, and payers—with smart tools and a more connected system to treat more population and a wide range of conditions through high quality, safe, and effective data-driven interventions.
By addressing industry inefficiencies and reducing costs, DTx uniquely addresses outcome and experience challenges to quicken the pace toward the Triple Aim goals and broader application of value-based care.