How pharma companies can benefit from the FDA’s digital health approach

Acceleration by regulation

Changes made by the FDA have made it easier for digital health products to be cleared and approved, offering life sciences companies—and pharmaceutical companies in particular—the opportunity to accelerate approvals and improve provider and patient satisfaction. Companies willing to invest in strengthening or building digital competencies may win market share, while those without sufficient investments may find themselves at a disadvantage.

Companies with prospective over-the-counter (OTC) drugs may find it easier to obtain approval. Companies with products intended for complex therapeutic areas, chronic conditions or rare diseases likely will find it easier to develop companion applications or delivery devices that support the use of their products. Companies looking to differentiate their products to patients, clinicians and insurers may find opportunities through digital applications.

New pathways for digital health

Four regulatory changes, as well as a host of smaller changes, are creating opportunities for the pharmaceutical sector.

Digital health pre-certification

The FDA is advancing a regulatory approach to digital health called the Digital Health Pre-Certification (Pre-Cert) program. Currently in pilot-phase testing with nine companies, the approach aims to make reviews of digital health products more efficient by rewarding those companies who have been assessed and evaluated by the FDA as having a “robust” culture of quality and organizational excellence for the purposes of developing digital health products.

Those companies will be permitted to have their products reviewed in a streamlined way, which would reduce the review time for the product by focusing on what the product is rather than what it does. This would then be paired with real-world health analytics, product performance analytics and user experience components, requiring the company to track how the product is being used and quickly address issues.

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Multiple-function devices

The FDA has published draft guidance that would make it easier for companies to include multiple functions in their mobile applications. Some devices, for example, may include a complex prescription function intended to help diagnose disease, like an algorithm that detects signs of cancer from a photo, as well as some unregulated functions intended to benefit the end user, such as a step counter or diet tracker.

Rather than treating all of the functions of the device as a single, combined entity, the FDA will instead treat them as separate. This will permit a regulated device to include otherwise unregulated or minimally regulated functions without subjecting them to rigorous oversight by the FDA. This could help companies to develop, upgrade and update more full-service applications without having to worry that each added function would trigger new regulatory requirements. It could also help companies to develop products in an iterative manner, allowing them to incorporate patient feedback into developing more useful products.

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Companion applications

The FDA has proposed a substantial change in the manner in which it will subject pharmaceutical companies’ drug-use-related software to regulatory oversight. Such applications include companion mobile applications that help consumers to use a company’s prescription drug products in accordance with the FDA-approved labeling.

Previously, companies could be required to submit these applications for approval under the premarket notification pathway, also known as the 510(k) pathway, if they were not exempted. Under the new proposed change, the FDA would instead treat such applications as promotional labeling, a much lower standard of review that does not require FDA approval prior to dissemination.

This could greatly increase incentives for companies to develop digital companions for their products by lowering the regulatory hurdles for entry.

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Digital labeling for over-the-counter drugs

In July 2018, the FDA released draft guidance saying the agency is willing to allow the approval of over-the-counter drugs that it would otherwise not approve, as long as they have the right type of product labeling, which could include digital labeling on smartphone apps accompanying the drug. Under the FDA’s approach, these digital tools, primarily mobile applications, would help consumers choose OTC drugs that would be best for them and avoid drugs that could harm them. Companies would be required to conduct studies of the application to ensure it correctly steers consumers to or away from its product.

The FDA said it believes the new approach could support the approval of a “wider range” of nonprescription drug products than is on the market, which could benefit pharmaceutical companies with long-marketed, generally safe products with minor safety concerns that have prevented them from obtaining OTC approval.

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Implications for life sciences companies

Digital health products need evidence and buy-in to succeed. New regulatory pathways will simplify market access and product development cycles, but companies will still need to take stock of how they can best leverage digital health with their new or existing product portfolios, and the data that will be necessary to support these products.

According to research published in the journal Health Affairs, even well-funded companies often lack clinical evidence supporting the use of their products. Of the top 20 digital health companies by funding, nine lacked any peer-reviewed evidence, and 28% of the studies conducted on the companies’ products looked at high-risk or high-cost patients.

Companies face a choice of where to invest, balancing the costs of development with returns from their customers. In a 2018 survey of pharmaceutical executives by HRI, just 42% said they were actively developing digital therapeutics or connected devices. Of those executives whose companies were not actively developing these products, 42% said they planned to begin doing so in the next one to two years, and 58% said they planned to do so in the next three to six years. The FDA’s new and emerging regulatory changes may make it easier for these products to get to market, especially if they have invested in analytical capabilities.

To succeed, pharmaceutical companies should focus on the needs of patients and providers. Digital health products must ultimately designed with their users and their unique needs in mind. A product that is not useful to, or usable by, a patient will not be effective—no matter how good the product is otherwise. A product that does not integrate into physician workflows may not be prescribed.

For companies developing digital health applications and products, their focus should be on how to treat patients in ways that go beyond a single dimension of health.

How PwC can help

Our Pharmaceutical and life sciences practice can support your company with:

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Benjamin Isgur

Health Research Institute Leader, PwC US

Omar Chane

Principal, PwC US

Tim Pantello

PLS Lead, PwC US

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