Why digital therapeutics are a new growth opportunity for healthcare transformation

Digital therapeutics in healthcare R1hbapm
Episode 2.13 3 persons (1)

Whether used as a standalone therapy or in conjunction with prescribed medicine and medical devices, digital therapeutics are standing on the precipice of mainstream adoption. Companies like Omada Health and Biofourmis have already reached unicorn status, and that’s just the beginning as DTx companies continue to secure record-breaking funding rounds. 

So on this episode of Shine, we’ve gathered three experts to discuss what you need to know about DTx. They share different perspectives from MedTech, payers, providers and pharma, explore business models and reimbursement strategies, driving impactful behavior change and more. Like so many things in life, the future of healthcare is digital. Listen now to find out why. 

Facilitating behavior change with DTx 

Chris starts the conversation by defining digital therapeutics as “a digital solution used to support the treatment of a specific condition or disease. Often, this can be in partnership with a drug, medical device, or combination.” One of their key advantages is enabling healthcare providers (HCPs) to track patient adherence and make interventions remotely

In particular, digital therapeutics are powerful tools for encouraging positive behavior change. As such, it has already been immensely impactful in the management and treatment of chronic conditions such as diabetes and high blood pressure as well as supporting mental health and sleep. Examples of DTx products include training exercises, programs, diet support and lifestyle management. 

Bozidar notes that “86% of US healthcare costs are driven by diseases that can be cured or slowed down by behavior change.” To him, digital therapeutics products are the clear solution. “If that large of a percentage of costs — measured in trillions — of the world’s most expensive healthcare system can be significantly improved by facilitating positive behavior change, it’s worth doing.” 

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DTx’s relationship with pharma

Digital therapeutics market growth initially presented a challenge to many pharmaceutical companies. Drug-free therapies would seem antithetical to pharma’s core business. Fortunately, we’ve seen that DTx and pharma are complementary over the past few years. It’s not one or the other, but both. 

And that’s empowering pharma companies to take on major challenges. For example, the Annals of Internal Medicine found that up to 50% of medication for chronic diseases is not taken as prescribed. The cost of which equals $250B in the US and $637B worldwide annually. With DTx, pharma can create new care pathways to improve adherence and outcomes. 

Harnessing these opportunities, however, requires different minds and thinking as Bozidar explains, “There’s a certain lens in which someone who’s been in pharma for 20 years sees the process of improving health. This is through a very long cycle of developing a product over 10 years, going through research and development and having difficulties adjusting it. With software, the development cycle is much shorter, the cost is much lower, and you can tweak the product.” 

Some of the questions you need to answer when creating your digital therapeutics business model include:

  • Is this a pre-prescription or a post-prescription product?
  • Do you release it as a standalone or a side-by-side drug?
  • Will this help me be more competitive when marketing my biopharmaceutical?
  • How can I forecast and show commercial value to management and other stakeholders?
  • Do you have the team members to ensure the solution will be viable?

Ultimately, DTx will be a very powerful tool for pharma companies to deliver value, improve efficiencies and differentiate themselves in the market. It starts by taking the right approach to product strategy. 

Personalization, consumerization and reimbursement strategies

Healthcare is becoming more personalized and consumerized. For example, how many people wore a heart rate tracker ten or even five years ago? DTx is a key enabler of this critically important trend. 

Patrick discusses the application of DTx to improve sleep highlighting, “Sleeping pills are a great example. Many patients could have a lower dose if given an opportunity for customization, especially if we have the right hardware and sensing tools paired with it.”  

This leads directly to the biggest question DTx manufacturers face: reimbursement. As Patrick asks, “How do you as a startup differentiate the extra evidence building and engagement necessary for reimbursement versus a consumer-driven approach?” 

There’s no one answer to this. Each of our experts shares a different approach. It’s essential to explore the different pathways available. One option that’s been difficult in the past but is slowly gaining traction is through CMS (US Centers for Medicare & Medicaid Services). Another, as Bozidar explains, is following the Livongo and Armada model by working with large employers and their HR departments “as a way of offering benefits, wellness and prevention programs helping them boost employee health and morale.” However, this comes with its own challenges of needing a large sales force, investment, and seeing whether customer acquisition cost would be lower than lifetime value. 

For Patrick, he sees remote patient monitoring and “tapping into the telehealth side and bringing the doctor to engage with the patient as a short-term viable option for moving this space forward.” 

Chris emphasizes the importance of pull marketing in attracting clinician support. From Star’s research and product development, he’s seen that “there is a little bit of cynicism and reluctance to adopt and use these types of tools from HCPs.” So instead, it can be better to “start by going with a direct to consumer model and a market entry solution” so patients can see the value. “That will drive visibility and increase awareness so healthcare professionals can see how this solution will help them achieve better health outcomes.”  

Start crafting bold DTx product strategies 

Digital therapeutics are powerful tools for encouraging improved diet, exercise, sleep, mental health and more at scale to promote healthier lives for everyone. As our experts describe, “It’s an opportunity to make positive habits sexy,” and we cannot overestimate their impact. 

We’ve only touched the surface of the insights these three experts shared about DTx. They go on to explore digital therapeutics trends in mental health, remote patient monitoring, overcoming barriers to adoption, the importance of data integration into EMRs and much more. Listen to the complete podcast episode and start streamlining your approach to DTx product development. 

Related topics


Digital therapeutics in healthcare Ralkbapm
Bozidar Jovicevic
CEO at Evermed

Bozidar Jovicevic is CEO of Evermed, an HCP engagement company that uses technology and partnerships to amplify the impact of HCP education. Bozidar was formerly VP Global Head of Digital Medicines at Sanofi, in charge of beyond-the-drug initiatives. He is an MD/MBA by training and during the first part of his career he spent 12 years at Novartis in various sales and marketing roles, launching two multi-billion dollar products on a regional and global level.

Digital therapeutics in healthcare Rapkbapm
Christopher Scales
Director, Strategy & Insight at Star

As Director of Strategy and Insight at Star, Christopher works primarily with the HealthTech Practice team to define human-centered digital strategies designed to improve engagement and deliver better health outcomes. In addition to his healthcare design experience, he has also successfully brought to market consumer electronics, automotive and heavy industry products and solutions. Before joining Star, Christopher held numerous senior roles in strategic design consulting, internal corporate design and innovation groups.

Digital therapeutics in healthcare Ratkbapm
Patrick Crampton
Chief Commercial Officer at Cerebra

Patrick is CCO of Cerebra, a digital HealthTech company focused on improving access to advanced technology for sleep assessment and diagnosis. Patrick brings a passion for commercializing innovation and building customer-focused organizations. Patrick previously served as Chief Operating Officer for Farmers Edge, a global leader in the Ag Tech sector and Vice President of Business & Product Development at Agrisoma Biosciences.

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