Throughout its development, the US healthcare system has been attracted to new and shiny technologies like bees to honey. This is a significant reason why the cost of healthcare rises over time. It is also one reason why value-based care initiatives show smaller savings than hoped—the downward pressure they exert on the cost curve is overcome by the upward pressure maintained by a steady stream of new and more expensive technologies.
Prescription Digital Therapeutics, the Next Frontier
Digital health applications have had a rockier road to acceptance than traditional pharmaceuticals, and that is mainly for two reasons: (1) lack of data on their effectiveness and (2) lack of reimbursement. The reason for the former is simple—evidence for their efficacy is not generally required for FDA authorization (if they are authorized at all). The reason for the latter is also straightforward: Are they covered under the medical benefit, pharmacy benefit, something else, or not at all? Responses to the question are rather vague, ambiguous, and disparate.
When manufacturer activity picks up in specific area of medicine, so does funding for awareness campaigns, drug advertising, and funding for additional research. Examples of this well-worn paradigm include the migraine arena with the approval of the triptans in the 1990s, rheumatoid arthritis and the approval of anti-TNF inhibitors in the 2000s, and Crohn’s disease and interleukin inhibitors in the 2010s. General and specific digital health applications can be expected to follow this trajectory, especially noting the involvement of Google, Apple, Amazon, and other extremely deep pockets.
That is not necessarily the case with PDTs. Manufacturers of digital health applications that are aimed at treating a disease, like substance-abuse disorder, opioid-abuse disorder, depression, insomnia, post-traumatic stress disorder, and more, are not large pharma companies, but smaller entities with more experience in the coding world than in reimbursement and coverage.
Approximately 20 manufacturers have either brought their PDTs to market or are currently developing them. These manufacturers are smaller concerns with more limited resources than conventional pharma companies. For the next few years, a good portion of their resources will be spent expanding awareness of these new treatment options.
First, PDT manufacturers need to focus their efforts on differentiating themselves from other digital health applications, including unregulated wellness apps. Second, they must emphasize their use of cognitive behavioral therapy, an accepted method for treating behavioral health disorders. Third, they are approved by the FDA as “software as a medical device,” and it will take a bit of explaining to attain recognition by payers and plan sponsors about what this term means for reimbursement and coverage. Finally, they need to spotlight the prescription-only feature for access (and adjunctive nature of their treatment). This is no small task for an industry that saw its first FDA authorization the second half of 2017.
Added Value to Adjunctive Therapy?
There may be a value-based aspect to PDTs. Consider that PDTs are not very expensive (although generally out of the range of uninsured patients or those paying out of pocket—probably up to $1,000 per prescription). They are not meant to be used as exclusive treatment; patients should be under the active care of a health professional and receiving live counseling, pharmaceutical therapy, or both. They are intended to improve the effectiveness of overall care and patient engagement. For example, a PDT for substance-abuse disorder seeks to improve abstinence rates and avoid recidivism. For the employer, that may translate into greater productivity, less disability, and less absenteeism.
The evidence for several of these PDTs is promising. Employers are only now awakening to the potential of PDTs to address important, stigmatizing conditions, with on-demand education and treatment modules.
Technical coverage and reimbursement questions will have to be resolved; for instance, can utilization of a PDT be tracked through pharmacy management, especially without a national drug code? They do carry unique device identification codes, but PDTs are not devices like glucose monitors. Will patients’ PDT data be reviewed and not simply relayed to the healthcare team? Will patients only be able to get a prescription through certain providers (e.g., will a nurse or pharmacist be able to prescribe it)?
This is a burgeoning treatment modality and worth tracking, with the introduction of PDTs for several new indications in the near future.