Digital therapeutics and connected care reshape the life sciences industry

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In 2019, new entrants and biopharmaceutical and medical device companies will bring to market new digital therapies and connected health services that can help patients make behavioral changes, give providers real-time therapeutic insights, and give insurers and employers new tools to more effectively manage beneficiaries’ health.

The arrival of digital therapeutics—an emerging health discipline that uses technology to augment or even replace active drugs in disease treatment—is reshaping the landscape for new medicines, product reimbursement and regulatory oversight. This means that new data sharing processes and payment models will be established to integrate these products into the broader treatment arsenal and regulatory structure for drug and device approvals. Connected health services, enabled by devices that transmit data or connect to the internet, give additional visibility into care delivery and new ways to improve patient outcomes.

As digital therapeutics and connected devices have transitioned from concept to reality, investors have poured a staggering $12.5 billion into digital health ventures in 2017 and 2018.1 Compared with 2013, this level of investment represents an increase in funding of 230 percent, while the average funding deal size grew 67 percent over the same period.2

Unlike branded companion apps and online portals, digital therapeutics and connected devices are clinically validated by the FDA and target specific health outcomes.3 The FDA already has approved some new digital therapies, such as Boston-based Pear Therapeutics’ Reset mobile application for the treatment of substance abuse, and Stockholm, Sweden-based Natural Cycles’ birth control app. The Natural Cycles app already has over 900,000 registered users, according to a company statement.4 Many other connected devices designed to treat diabetes, central nervous system disorders and other conditions—in concert with an active drug, or not—are expected to enter the market in 2019.


The majority of American consumers want new digital therapies and connected devices as treatment options, and physicians are interested in these tools as well. More than 50 percent of consumers surveyed by HRI said they would be somewhat or very likely to try an FDA-approved app or online tool for treatment of a medical condition. The same consumers also are more likely to feel comfortable sharing their medical or health information, according to HRI survey data.

The FDA’s Digital Software Precertification Program is expected to begin awarding approvals starting in 2019. Nine biopharmaceutical, device and technology companies are working as partners with the “pre-cert” program in a pilot phase that began in 2017.5 The program’s goal is to reduce the amount of submission materials required from manufacturers of software-based medical devices and expedite the review process for companies that demonstrate a “robust culture of quality and organizational excellence, and who are committed to monitoring real-world performance,” according to the FDA.6

The ability to induce behavioral change in patients is a distinguishing characteristic of the new digital therapeutics and connected devices. For patients struggling with substance abuse or depression, cognitive behavioral therapy (CBT) principles are taking the form of customized content delivered to individual patients through mobile apps. Results from clinical studies of Pear Therapeutics Reset substance abuse app, for example, show increased abstinence from alcohol, cocaine, marijuana and stimulant substance use compared with patients who didn’t use the app.7 Gaia AG, based in Hamburg, Germany, is developing individually customized digital CBT approaches to treat depression, epilepsy, compulsive gambling and back pain, among other conditions.8


Seamless health data collection and sharing can help patients make positive lifestyle changes and can help physicians intervene to prevent poor outcomes. Boston-based Akili Interactive has developed digital treatments with direct therapy to treat cognitive deficiency and improve symptoms associated with medical conditions across neurology and psychiatry. The company is preparing to submit a prescription video game targeting ADHD patients to the FDA for approval.9 Connected devices are moving from diabetes and central nervous system disorders into new therapeutic areas such as respiratory, cardiovascular and rare diseases.

In the respiratory area, GlaxoSmithKline (GSK) is partnering with Propeller Health, a Madison, Wisconsin-based digital therapeutics company, which uses digital sensor technology to track and optimize patient inhaler usage. The partnership’s goal is to learn how this technology can help improve patient engagement and medication adherence, said Sai Jasti, commercial data officer at GSK, in an interview with HRI. “Digital therapeutics are the next frontier,” said Jasti. “I think we will see a lot more collaboration between pharmaceutical and technology companies to drive this forward, ultimately to the benefit of patients.”

The partnership, which is in its early stages, lets GSK send messages to individual patients based on data collected by the Propeller Health sensor, which connects directly to a patient’s inhaler. “Digital therapeutics are the next frontier,” Jasti said. “I think we will see a lot more collaboration between pharmaceutical and technology companies to drive this forward, ultimately to the benefit of patients.”

As more digital therapeutics and connected devices come onto the market, biopharmaceutical companies will have to change their approach to product discovery and development, focusing on solutions that have demonstrable outcomes for patients, providers, insurers and employers.10 New entrants and technology firms—Apple received an FDA clearance in September for its smart watch ECG and an algorithm for detecting atrial fibrillation—will continue to develop products using their strengths, including user interface, consumer engagement and sensor technology. Also in September, the American Medical Association proposed new billing codes for 2019 for remote patient monitoring and digital consults, which could speed physician adoption of connected health services.11

Implications

Focus on outcomes, not just endpoints

To succeed in the digital therapeutics era, pharmaceutical and life sciences companies must venture more deeply into care delivery. Organizations that can become an integral part of giving patients positive health outcomes—using real-world data and enhancing the connection between patients and providers—also will be able to design new payment and contracting models. Biopharmaceutical companies may look to the medical device industry to further understand the skills and processes necessary to move from selling products to creating healthcare solutions.12



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Evaluate the impact of digital therapeutics and connected care solutions on your practice

New health data streams coming in from patients’ devices and mobile phones may disrupt provider practices even as they help improve care delivery. Evaluate workflow processes for new data streams, including integration in electronic medical health records. Successfully integrating new patient data into physician practices may improve in-person visits, making health discussions more efficient and informed by real-world patient behaviors.

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Explore partnership models focused on demonstrating results

Innovation Health, an insurance provider created jointly by Virginia-based Inova Health System and Aetna, is testing digital therapeutics and financial models to better understand these new products’ effectiveness.13 Digital therapeutics and connected devices may make it easier to construct value-based contracts and other outcomes-based financial models with payers and providers to drive adoption. Subscription pricing for digital therapeutics or connected device solutions, for example, could make pharmacy spending more predictable and efficient.

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1 Megan Zweig, Halle Tecco and Michelle Huang, “2018 Midyear Funding Review: Digital Health Déjà Vu in Yet Another Record Breaking Half." Rock Health, accessed Oct. 25, 2018, https://rockhealth.com/reports/2018-midyear-funding-review-digital-health-deja-vu-in-yet-another-record-breaking-half/

2 Ibid.

3 Digital Therapeutics Alliance, “What are Digital Therapeutics?” accessed Sept. 24, 2018, https://www.dtxalliance.org/

4 Press release, “US Food And Drug Administration (FDA) Clears Natural Cycles As The First Digital Method Of Birth Control In The United States,” Aug. 13, 2018, https://www.prnewswire.com/news-releases/us-food-and-drug-administration-fda-clears-natural-cycles-as-the-first-digital-method-of-birth-control-in-the-united-states-300695804.html

5 Companies participating in the FDA’s Digital Health Software and Precertification program include Johnson & Johnson, Pear Therapeutics, Samsung, Roche, Apple, Verily, Fitbit, Phosphorus and Tidepool.

6 FDA website, “Digital Health Software Precertification (Pre-Cert) Program,” accessed Sept. 21, 2018, https://www.fda.gov/medicaldevices/digitalhealth/digitalhealthprecertprogram/default.htm

7 In a 12-week multi-site study of 399 patients, 40 percent of the patients using the Pear Therapeutics Reset desktop app abstained from drugs or alcohol, compared with 18 percent in the group not using the app; press release, “FDA permits marketing of mobile medical application for substance use disorder,” Sept. 14, 2018, https://www.fda.gov/newsevents/newsroom/pressannouncements/ucm576087.htm

8 Gaia AG website, accessed Sept. 24, 2018, https://gaia-group.com/en/news.html

9 Stephanie Baum, “Akili raises $55 million as it prepares to submit prescription video game for people with ADHD for FDA approval,” MedCity News, May 9, 2018, https://medcitynews.com/2018/05/akili-raises-55m-as-it-prepares-to-submit-prescription-video-game-for-people-with-adhd-for-fda-approval/

10 PwC Health Research Institute, “Clinical trials in the New Health Economy: Digital tools and data driving awareness, engagement and retention,” April 2018, https://www.pwc.com/us/en/industries/health-industries/health-research-institute/clinical-trials-in-new-health-economy.html

11 Press release, “AMA releases 2019 CPT code set,” American Medical Association, Sept. 5, 2018, https://www.ama-assn.org/ama-releases-2019-cpt-code-set

12 PwC Health Research Institute, “Beyond the device: From producer to problem solver,” August 2016, https://www.pwc.com/us/en/health-industries/health-research-institute/publications/beyond-the-device.html

13 Dave Muoio, “Sanofi, Aetna-Inova JV target diabetes with digital therapeutic pilot program,” MobiHealthNews, Sept. 25, 2017, https://www.mobihealthnews.com/content/sanofi-aetna-inova-jv-target-diabetes-digital-therapeutic-pilot-program

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