All signs point to 2019 being a breakthrough year for digital therapeutics (DTx). With the market growing 64% CAGR and poised to hit half a billion U.S. dollars by 2021, the industry is approaching an inflection point. In a recent PwC survey, more than half of consumers said they would be somewhat or very likely to try an FDA-approved app or online tool to treat a medical condition, and physicians displayed similar openness to the emerging category.
That said, the business environment is fragmented at this early stage as large and small technology and life sciences companies approach the space with different perspectives and agendas and grapple with “last mile” challenges, including lack of clarity around the reimbursement pathway and insufficient analysis of sometimes-conflicting stakeholder needs. All companies in this sector will need to adopt effective engagement strategies and rigorous partnership selection criteria to navigate such nuanced issues.
At this early stage, other stumbling blocks include:
- While thousands of patients have been treated, diagnosed, or monitored with the aid of DTx products in clinical trials and commercial settings, few developers have announced what these products will cost.
- Physicians and patients will need to be educated on their use. And payers must be educated and persuaded of their value.
- Biopharma companies that many DTx ventures are relying on for support and expertise may prove unreceptive to the new therapeutics if the products begin to disintermediate treatment providers and disrupt the traditional business model.
- While DTx-mediated consumer empowerment is praiseworthy, patients may be harmed if innovation out-paces or sidesteps regulatory oversight.
Download the Syneos Health report, “How Digital Therapeutics Developers Can Satisfy Diverse Stakeholders,” to:
- Understand the confluence of regulatory, technological, social and economic conditions driving DTx market growth.
- Gain access to recommendations for large and mid-sized biopharmaceutical companies considering a partnership; DTx solution providers; payers, including self-funded employer plans; hospital systems, ACOs and IDNs; and investors.
- Learn how to structure a commercial model that is win-win for all stakeholders by crafting optimal value stories, empathizing with key stakeholders, and avoiding behaviors that undermine consumer trust.
Understanding the regulatory and reimbursement landscape is imperative to a successful DTx product launch. Listen to The Syneos Health Podcast to take a deeper dive on regulatory and payment hurdles.