The future will see the pharma industry change two things: what and how it sells. As payers become more focused on Value Based Contracts (VBCs), the days of pay-per-pill are disappearing. Drugs will remain core but they will be augmented by a portfolio of digital therapies, wrap-around services and data analytics, which providers will pay for according to overall patient outcomes. But what are Digital Therapeutics, and what do they mean for pharma firms?
Digital Therapeutics (DTx) have been defined by the Digital Therapeutics Alliance (DTA) as “delivering evidence based therapeutic interventions to patients, that are driven by software to prevent, manage or treat a medical disorder or disease”. They might come in the form of a smartphone or computer tablet app, or some form of a cloud-based service connected to a wearable device.
DTx tend to fall into three groups. Firstly, developers and mental health researchers have built digital solutions which typically provide a form of software delivered Cognitive-Behaviour Therapies (CBT) that help patients change behaviours and develop coping strategies around their condition.
Secondly there are the group of Digital Therapeutics which target lifestyle issues, such as diet, exercise and stress, that are associated with chronic conditions, and work by offering personalised support for goal setting and target achievement.
Lastly, DTx can be designed to work in combination with existing medication or treatments, helping patients manage their therapies and focus on ensuring the therapy delivers the best outcomes possible.
Pharma companies are clearly trying to understand what DTx will mean for them. For a long time, they have been providing additional support services to patients who take relatively expensive drugs for chronic conditions. A nurse-led service might provide visits and telephone support to diabetics who self-inject insulin therapies, for example. But DTx will help broaden the scope of support services because they can be delivered cost-effectively, and importantly have the ability to capture real-world evidence on patient outcomes. They will no-longer be reserved for the most expensive drugs or therapies but could apply to a whole range of common treatments to boost their efficacy.
Faced with the arrival of Digital Therapeutics either replacing drugs, or playing an important role alongside therapies, pharma firms have three options. They can either ignore DTx and focus on developing drug therapies as they have done; they can partner with a growing number of DTx companies to develop software and services complimenting their drugs; or they can start to build their own Digital Therapeutics to work with their products.
Digital Therapeutics will have knock-on effects in health industries, which may be as great as the introduction of therapeutic apps and services themselves. Together with connected health monitoring devices, DTx will offer a near constant stream of data about an individuals’ behavior, real world context around factors affecting their treatment in their everyday lives and emotional and physiological data such as blood pressure and blood sugar levels. Analysis of the resulting data will help create support services tailored to each patient.
But who stores and analyses this data is a thorny question. Strong data governance will be paramount to maintaining trust, and the highly regulated pharma industry may not be best-placed to handle individual patient data.
Meanwhile, the health sector (payers and healthcare providers) is becoming more focused on patient outcomes, and payment for value not volume. Will pharma firms will enhance the effectiveness of drugs with DTx, or in some cases replace drugs with DTx? The question is … who is going lead the way on a combination of drugs, DTx and services? If the pharma industry cannot place itself at the centre of this debate it risks losing crucial ground - temporarily at best - to new all-powerful tech-first companies who spy an opportunity to disrupt and dominate.
Digital Therapeutics have the potential to change what the pharma industry sells: rather than a drug it will sell a package of drugs and digital services. But they will also alter who the industry sells to. Pharma firms have traditionally marketed drugs to doctors, pharmacists and other health professionals, based on the efficacy of a specific product. Soon it could be paid on the outcome of a bundle of digital therapies, medicines and services with a closer connection to both providers and patients.
Apart from a noteable few, most pharma firms have taken a cautious approach to Digital Therapeutics. Whether that is sufficient in the face of the threats – and opportunities – this emerging market presents as we embark on the last year of this extraordinary decade of digital disruption, I will consider in my next column.
Jim O’Donoghue is head of S3 Connected Health, headquartered in Dublin, Ireland. He has 30 years’ experience in designing and delivering innovative services and solutions across healthcare, consumer and communications sectors.
Over the past 15 years Jim and his team have designed digital patient support solutions for pharma and healthcare providers that are available across 40 countries, including the largest telehealth program in the UK, and the largest chronic disease management program in Europe.
Jim serves on the industry steering committee for the Applied Research Centre for Connected Health and served on the industry board for the UK “3 Million Lives” program.