The shift to value-based-care is picking up significant speed as we approach the close of the decade. The pharmaceutical pill has shifted from being seen as a standalone product, to one that needs wraparound digital activation to deliver the patient outcomes payors now demand. Digital therapeutics (DTx) for chronic diseases such as diabetes, as well as mental health treatments such as digitally-delivered cognitive behavioural therapy (CBT), are also gaining traction as patients are encouraged to take more control of their conditions via these digital tools.
Against this backdrop, smart pharma companies are taking an increasingly holistic approach to improving patient outcomes by investing in new digital therapies that augment and complement their traditional products. Together with specialist partners, the pharma industry is searching for its role in the new and exciting digital health space to curate the best patient experience technology can provide.
2019 will surely go down in the history books as the year when DTx began to come of age, with important steps taken in establishing DTx as a therapeutic option for clinicians. Doctors can now prescribe ‘apps with health benefits’ in Germany after a new law was passed to allow public sector reimbursements for digital therapies. Meanwhile, the US continued to lead acceptance of digital health interventions in a year that saw the FDA increase its endorsement of ‘breakthrough’ DTx such as NightWare for PTSD sufferers, while CVS became the first major insurer to reimburse a digital therapy by adding Big Health’s Sleepio.
As described in my previous article in this ReshapingPharma series on DTx, there is clearly now a huge opportunity for pharma companies, working with specialist developers and other partners, to graduate from a drug brand focus into building their digital health enabled USPs in particular disease areas.
I’ll explore in this article how firms can expand into an area that could lead to sustainable growth of their revenues and market share. As we head into an increasingly digital future, firms needs to avoid the pitfalls of previous initiatives in this area and make strategic decisions that lead to meaningful, adoptable DTx.
From working on digital therapy management solutions with our pharma partners, we’ve seen that success in this area – as with any investment or expansion – depends on getting the strategy right at the start.
My experience is that firms succeed when they remember that any innovation needs to be developed in alignment with the objectives of an established business or brand strategy. It’s important not to be distracted by the promise of shiny innovation without tangible benefits. Important questions need to be asked, such as if there is a clear company strategy for the development of DTx? And if so, what’s the purpose? And crucially, does it have support from C-Level? An investment in DTx must deliver real, measurable value to stakeholders, with a clear mapped-out route to achieve adoption and reimbursement in core markets.
Just because this move may feel like a novel leap into the relative digital unknown, this is not a time to take shots in the dark. The strategy needs to be a fully-planned, multi-year campaign. If the plan is not clear with measurable targets mapped out at key stages over the course of its proposed launch, beta and rollout phases, it simply won’t last beyond year one.
Secure internal buy-in
Part of this process will be about identifying who needs to lead on developing DTx within the pharma business, and managing key internal stakeholders. It’s likely that multiple and multidisciplinary teams will be involved, so it’s crucial these are mapped out at the start. Which head office teams need to buy-in? In my experience DTx development tend to be led by three broad groups. Firstly they can originate from within R&D, when the product is planned to be a standalone and not linked to an existing core therapy and is creating a new revenue stream. Secondly it can come from a commercial or brand management team, which is looking to enhance an offering around an existing core product to improve patient outcomes. Finally, they can be created by digital strategy teams specifically tasked with creating DTx innovations.
Whichever individual teams initiate the DTx it’s important they recognise that they need input from Medical Affairs – to ensure anything developed is focused and delivers improvement of patient outcomes. The Market Access teams are also crucial to identify the reimbursement strategy across territories.
An important element to get right at the drawing board stage is the plan for driving adoption in key target markets. At this point, it’s important to put thoughts of reimbursement to one side and focus on identifying what the key value will be for patients, clinicians and payors.
Adoption is more likely when both clinicians and patients are engaged in the use and oversight of the DTx. Any intervention needs to take into account that clinicians are often time-poor and risk averse, and that patients are more likely to use a solution that integrates with and supports their overall condition management. So delivering oversight, reducing friction and burden of use, and delivering value to the end users is crucial in securing adoption. The same is true for other stakeholders such as payors and healthcare providers. If the value is not there or incentives aren’t aligned, they can effectively block adoption; so having sufficient clinical and health-economic evidence is key.
That’s why we focus on identifying the ‘Core Adoptable Solution’ (CAS) when developing DTx with pharma partners, so we can establish the functions and services that will address a real need, deliver value to all stakeholders, and integrate effectively into care pathways.
Identifying the CAS involves answering two main questions: What is the strategic intent of the DTx, and what problem is it looking to solve? Broken down, we want to find out what key unmet needs the DTx will address for patients and clinicians: Does it deliver enough value to all stakeholders to drive adoption? How will it be implemented? What’s the operating model? Does it effectively integrate into care pathways and how will patients access the solution?
Once the DTx is defined by the pharma company, other crucial questions need to be addressed such as if it’s flexible enough to accommodate different regulatory requirements when scaling to multiple territories. Territorial differences can be a real stumbling block. If potential differences around evidence and efficacy data due to cultural differences aren’t considered, or a roadmap to reimbursement isn’t planned in advance, this could clearly derail a DTx rollout.
Reimbursement complexities need considerable amount of consideration. For instance, how a product is handled by payors depends on its classification. So firms need to be clear if their DTx will be deployed as ‘pure-play’ DTx or part of a combination product. A pure-play DTx is independent of a drug therapy, and charged and reimbursed for the length of time it’s prescribed and used by the patient. Whereas, a combination product is either charged as a premium for a drug+DTx combination, or built into a range of supporting services offered as part of a drug or treatment.
DTx in 2020 and beyond
While 2019 has been a landmark year for DTx, there is more to come in 2020 and beyond. It’s clear that DTx can and will have a profound impact on patient outcomes beyond the provision of pills, once properly planned and integrated into a company’s business strategy. DTx are already improving outcomes, generating new revenue streams and creating new business models for pharma. If the trend continues, DTx will be a driving force for value-based care and outcome-based reimbursement.
As DTx continue to be defined and refined, now is the time for pharma to identify their strategy and get on board by developing their offerings with the right partners. If not, they risk not just falling behind this wave of digital innovation but missing out on a crucial and impactful method for driving meaningful change in healthcare.
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.