Software applications—apps—drive everything about how we function in the world. But can apps function as medicine? Can they treat our health problems, or better yet, prevent them?
An organization founded in 2017 called the Digital Therapeutics Alliance believes that software can prevent, treat, and manage a range of health issues. And now its members, armed with stacks of peer reviewed papers, are trying to get the government to write legislation that creates a pathway for their success.
“Think of us as a digital drug,” says Big Health founder Peter Hames. The company has two mobile apps, Daylight, which treats anxiety, and Sleepio, which treats insomnia. The apps deliver cognitive behavioral therapy, a skills based therapy that, through a virtual professor, teaches you techniques for falling asleep and mitigating anxiety. It also asks users to log progress through a sleep diary. This level of data collection allows Big Health to document whether or not its app is working.
Together, the two apps have been the subject of 64 peer-reviewed clinical papers, of which 13 included randomized controlled trials, involving 13,000 participants across all studies. There is fairly thorough data supporting their usefulness, because the effects of apps—just like drugs—can be measured and validated. “More participants have taken part in controlled studies of Sleepio, our insomnia therapeutic, than have ever taken part in studies of Ambien,” says Hames.
In general, digital therapeutics tend to take a lifestyle approach to illness, teaching patients how to manage health problems ranging from chronic pain and diabetes to anxiety. The Digital Therapeutics Alliance has 59 member companies, including pharmaceutical giant Boehringer Ingelheim. In the last few years, it’s seen growing investment from venture capital. In 2015, the category attracted $134.3 million in venture funding, but by 2019, digital therapeutics had cleared $1.2 billion worth of deals, according to Pitchbook data. Pitchbook’s analysts estimate that digital therapeutics will be worth $6.9 billion by 2025.
“Through data we’re tying to make sure users are more engaged, retained, and eventually help them improve clinical outcomes,” says Erez Raphael, CEO of DarioHealth. “Further, we have the data to prove the clinical outcomes.” Part of why these interventions are successful is because they make keeping up with healthcare regimens much easier. The apps not only allow members to track their own progress, but often feature other accountability measures, like check-ins with a coach—all of which can be done from home.
Ostensibly, any kind of treatment proven to treat sleeplessness or reduce anxiety should be prescribable and covered by health insurance. Some major insurers do cover Sleepio (the company also has a deal with CVS/Caremark and the National Health Service in the U.K). However, other digital therapeutics companies are still struggling to be accepted for insurance reimbursement. Many digital therapeutics provide treatment for on-going conditions, which are not always easily reimbursable under fee-for-service insurance models.
For instance, DarioHealth uses a digital platform combined with coaches and sometimes medical devices to treat diabetes, hypertension, weight loss, and musculoskeletal issues. Part of the issue the company encounters with insurers is that there aren’t corresponding insurance billing codes for the kinds of services its digital therapeutics provide. Instead, it has also worked out deals wherein its 185,000 users can be reimbursed for Dario’s medical devices, like it’s glucometer. It primarily sells its program to patients directly and employers as an employee health benefit.
“The biggest hurdle that we have right now is that [Center for Medicaid and Medicare Services] has yet to define a benefit category for software as a medical device,” says Therapeutic Alliance CEO Andy Molnar. While CMS does not dictate what insurers will and will not reimburse for, it sets the standard because it is the largest payer in the country. Typically, insurers cover drugs and healthcare services provided by doctors. Digital therapeutics don’t fall into either of those categories.
There are signs that CMS may be embracing digital therapeutics soon. In January, CMS finalized a rule called the Medicare Coverage of Innovative Technology, which would make technologies with a breakthrough status from the Food and Drug Administration eligible for reimbursement under Medicare for four years. However, implementation of that rule has been delayed until at least December 15, to give the Biden administration an opportunity to review and amend it. MCIT currently doesn’t address digital therapeutics directly, but it does reimburse for medical equipment, often a component of digital therapeutics.
In addition to MCIT, a bill introduced last year may create a stronger pathway to reimbursement for digital therapeutics. The Prescription Digital Therapeutics to Support Recovery Act would ensure Medicare and Medicaid cover prescription digital therapeutics that render behavioral health services, including programs that address mental health disorders and substance abuse. If it is eventually passed, this bill would create a benefit category for digital therapeutics, as Molnar described.
Other countries have already taken steps to make sure that patients have easy access to digital therapeutics and telemedicine. In 2019, Germany passed The Act to Improve Healthcare Provision Through Digitalization and Innovation, so that healthcare apps could be covered by insurance. That same year, the U.K.’s National Institute for Health and Care Excellence published guidance for digital therapies on how to gain acceptance by the NHS.
Raphael is encouraged by the progress. “It’s a much more modern way for people to manage their health.”