Digital therapeutics — apps, virtual reality programs and video games designed to treat medical conditions — hold promise but lack momentum. That has largely been because Medicare and most commercial payers don’t cover most of them, even when the FDA signs off.
But the sector may soon get a boost. In July, the Centers for Medicare and Medicaid Services included three payment codes for mental health digital therapeutics in the proposed Physician Fee Schedule for 2025.
If finalized this fall, the codes could go into effect in January, offering a path to payment that could pull these technologies out of the weeds and on an upward trajectory.
Still, the codes aren’t a done deal.
“I think the reality is certain but the timing is not,” said Dave Hanaman, president and chief commercial officer of Curavit, in an email. “The government works at its own pace and initiatives can be delayed by congressional schedules, the uncertainty of elections and the turnover that results.”
Slow progress
Digital therapeutics have been around for about 10 years and have endured some tough times, said Ryan Douglas, co-founder and chairman at DeepWell Digital Therapeutics, a video game therapeutics company.
Pear Therapeutics, a digital therapeutics pioneer that snagged the first FDA clearance for a prescription digital treatment for patients with substance use disorder in 2017, filed for bankruptcy last year. Other companies are also struggling to find their footing.
But if they can navigate the challenges, digital therapeutics offer benefits such as personalization, low risk and a way to provide treatment despite an acute shortage of providers.
DeepWell obtained clearance from the FDA last month for its biofeedback software development kit, which will be available alongside immersive media on mobile platforms to treat stress and high blood pressure. The approval could pave the way for FDA approval of video games down the line, and eventually, DeepWell’s kit could be OK’d for other conditions such as pain, epilepsy, Parkinson’s and Alzheimer’s disease.
“We went for an over-the-counter clearance, which is important because we want that high degree of accessibility care,” Douglas said. “We want to meet you where you are.”
Douglas said company leaders see the potential to tap into a pool of billions worldwide who use interactive media on their phones and the appeal of a low-cost intervention at less than $50 a month. This could position the company to take advantage of a rising tide from improved reimbursement.
“These codes would provide monetary incentives for companies to develop, doctors to recommend and patients to use [digital therapeutics] that incorporate DeepWell technology,” according to a press release.
Challenges ahead
If reimbursement changes materialize, companies would still need to sell the concept to doctors and consumers.
“Digital support and interventions face significant hurdles with physician awareness, patient access and pathways for payment and reimbursement,” Hanaman said, pointing out that 85% of physicians believed digital therapeutics could improve patient care, but only 11% felt fully informed about how to integrate them into practice, according to a survey from the American Medical Association.
Some pharma companies are nevertheless looking to get in on the action. Boehringer Ingelheim and Click Therapeutics teamed up earlier this year on a digital therapeutic for schizophrenia symptoms. And AstraZeneca has a digital therapeutic designed to monitor breast cancer symptoms and gauge treatment response.
“Over the long term, the legacy pharmaceutical industry may be the biggest beneficiary of innovation with digital therapeutics and diagnostics,” Hanaman said. “Digital therapeutics and diagnostics can meaningfully support the use of traditional drugs and therapies [by] offering clinical guidance, managing side effects and improving adherence.”
People who don’t take drugs as prescribed cost the U.S. healthcare system an estimated $290 billion a year.
A brewing healthcare storm may fuel the urgency to implement digital solutions. Since the COVID-19 pandemic, the U.S. has fielded a mental health crisis without enough providers to address it, Douglas said. Digital therapeutics could fill the void.
“Digital therapeutics and devices create a new avenue for disease management, offering patients an alternative to traditional medications,” Hanaman said. “They also play a growing role as companion therapies, particularly in complex, lifelong treatments for conditions such as oncology, neuroscience and metabolic diseases.”
