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03 June 2021

Armchair Therapy: Digital Therapeutics

As a result of COVID-19, healthcare systems across the world encountered a monumental challenge – how to provide treatment for those affected by the virus yet maintain levels of care for existing patients. The constraints this placed on healthcare systems gave way to a search for solutions, which ultimately accelerated the adoption of digital therapies that enabled patients to receive similar standards of treatment remotely.
This is otherwise known as digital therapeutics – an umbrella term for products delivering evidence-based therapeutic interventions to patients, driven by high-quality software programs to prevent, manage, or treat a medical disorder or disease. Its role in developing the healthcare industry has been fuelled by the pandemic, however, the case for digital therapeutics has evolved over the last decade as the use of technology and artificial intelligence (AI) became intertwined with our daily lives. The technological advancements in the space have produced increasing evidence that digital therapeutics are effective, and with the cost of bringing a drug to market estimated to be as high as US$2.9bn while return on investment nears 0% (See: Insight: The Rise & Fall of Big Pharma), the potential for a cost-effective, convenient and scalable method of treatment for billions of patients worldwide is disrupting the healthcare industry.
Within this ten-year period, 77% of digital therapeutics trials conducted were sponsored by academia, which has dominated research across all therapeutics apart from respiratory, where 50% of trials have been sponsored by industry. Research into digital therapeutics has, therefore, mainly been driven by academics, yet as the industry grows this is likely to shift towards the established players and help to drive innovation further. The highest percentage of trials have been conducted in psychiatry (25%) – with strong evidence supporting the efficacy of digital cognitive behaviour therapies in this area – followed by cardiovascular (11%), endocrine (10%), addiction (10%), neurology (8%), and respiratory (7%).
Such trials have been vital in progressing digital therapeutics, as the contradiction between fast, disruptive tech and the need for evidence-based health solutions meant there were a number of regulatory hurdles to clear before wide-spread adoption could be considered. One of the main problems thus far has been the lack of medical professionals using digital therapeutics platforms, but regulatory changes and increased levels of consumer demand should help to solve this. In March last year, the US introduced regulations working towards this goal, enabling healthcare providers to practice across state lines while also permitting providers to prescribe controlled substances remotely without a prior in-person exam.
Investments in digital therapeutics companies in the United States have grown by an average of 40% a year over the past seven years, but the industry is still at an early stage, estimated to grow tenfold in the next three to four years, with a projected market value of US$9bn by 2025. Most successful digital therapeutics companies so far have been start-ups, but as the evidence behind the effectiveness of the technology and demand from consumers increases, big players in the pharma industry are searching for acquisitions or products of their own.
One of the first and largest providers of digital therapeutics is a company called Teledoc, which offers members 24/7 access to medical services through phone and video consults. The US’ largest telemedicine company grew its subscriber base significantly last year and acquired Livongo in an US$18.5bn deal. Livongo is a data-based health coaching programme for several areas including diabetes management, weight management and behavioural health. The two companies estimate that revenue synergies of US$100m will be achieved after two years, and US$500m by 2025, highlighting the demand both companies expect for digital therapeutics in the future. The convenience of online health check-ups no doubt has a positive impact on public health and will reduce costs in healthcare, but whether consumers opt to use these services once we return to normal life will be an interesting scenario to monitor.
Armchair Therapy: Digital Therapeutics
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