It’s been two years since the first software-only digital therapeutic got the FDA greenlight, but the industry is still very much in its infancy and continuing to evolve. New entrances are emerging from the world of health, pharma, tech and finance. As the industry matures, it's grappling with existential questions including regulation, reimbursement models and, as always, the definition of a digital therapeutic.
This week in Boston at DTx East, some of the leading names in digital therapeutics came together to discuss a variety of digital health and digital therapeutics topics. Included among these were debates on the state of digital health investment, relationships with pharmaceuticals, developing successful business models, patient engagement, risk management and — very frequently — the need for evidence and data that can satisfy providers, regulators, pharmas and payers alike.
Here is a scattershot of thoughts and insights on the maturing digital health market MobiHealthNews heard from stakeholders throughout the event.
On the growing need for robust data …
“In previous meetings, I think [the data conversation] has been left a little bit to the side, and actually I am really quite excited and encouraged that everyone is talking about data and the importance of data," Spencer Jones, VP of global medical affairs at Sandoz, said. "What I have heard is everyone talking about data for regulatory purposes and then reimbursement. Actually, there are other groups of stakeholders that you could be reporting for too. Pricing groups, reimbursement policies, and we mustn’t forget that it’s important for the doctors, patients and other groups as well. It’s very exciting that we’re talking about these things, but the context of the conversation we’ve had has to go much further."
"You need a data portfolio, you need an evidence portfolio that’s really validating you from different angles," Medisafe CEO and co-founder Omri Shor told MobiHealthNews when describing the company's latest large-scale pilot. "At Medisafe, we did some real-world evidence based on claims data on thousands of patients, we did pre-post analyses where we saw when we did the intervention how the patient did before and after the intervention. Then we did two RCTs. After that, we participated in comparative studies. So it really creates an umbrella, and I hope this one is really one of the last bricks in the wall … that we’re building. You want to have evidence, the ROI that this specific program actually worked."
On the risks of digital treatments ...
“As we develop and grow and have new interventions, I don’t think we should go to the assumption that risk is low,” Randall Kaye, chief medical officer of Click Therapeutics, said. “I think we should go with the assumption that risk might be there and we have to find it. I think we tend to think of risk as causing a harm — like you take this drug and it causes injury to the liver. Sometimes with a digital therapeutic, risk or harm could be an act of omission.”
“I think we need to have a great deal of seriousness [around risk]. Especially companies that are coming from the tech space,” Ed Cox, CEO of Dthera Sciences, said. “Their view is how dangerous can it be? Either you use it or you don’t use it. If someone doesn’t use it and [this leads to] a dangerous outcome for the patient, these are I think one of the reasons that most of us are pushing for everyone in the industry to go and get regulated.”
On FDA regulation and the Pre-Cert Program ...
“These are products that actually change how the brain interacts with the body, there’s a potential to do harm," Pear Therapeutics Chief Strategy Officer Alex Waldron said in response to an audience question on whether digital therapeutics companies should be seeking out regulators. "So I know not everyone in this group is not on the same page by way of regulation versus non-regulation, but if you’re fundamentally changing the way the brain interacts, I think that’s something that behooves us as an industry to consider, because there are veritable, published documents that show there is a negative possibility.”
“We’ve done a few appraisals, about six of them, and what we’re learning is it’s really interesting to watch every one of those companies are doing phenomenal things in their own way, and we’re trying to figure out a way to recognize that,” Bakul Patel, director of the FDA's division of digital health, said during an update on the agency's experimental Pre-Cert Program. “What we’ve learned is when people are trying to explain something to somebody, they’re finding out themselves what they need to fix. What we’re trying to move away from is getting people to show us what is it that they’re doing, as opposed to looking for how do they know their organization is doing things [well] — we’re looking for organizational processes.”
"I hope that questions that are asked in any clinical study are representative of [real implementation]," Patel said in response to a "shocking" question on whether the design of pivotal digital health trials for regulatory purposes could better reflect real-world deployments. "If there’s a disconnect between what you design the study for FDA approval versus what this market really needs, I find it really disturbing to some degree that that’s happening. If that’s happening, there has to be a conversation.”
On digital health investment and fundraising...
“When you speak to investors who invest in biotech, the number one thing they look for when thinking about if companies are successful is whether there is potential for a partnership with a large pharma company,” Shaan Gandhi, principal at Longwood Fund, said during a panel on digital health investment. “So when thinking about how to pick winners in digital therapeutics or how to set your company up for success, if you are pursuing a digital therapeutic strategy, looking for areas of overlap with large pharma would provide a short-term path to profitability or at least a pathway to cash, which would allow you to sustain your business while you wait for the CMS's of the world or the FDAs of the world to actually create a true path [to] clinical for your digital therapeutic.“
“Look at who you took money from. If you took money from tech investors who do not believe in clinical and regulatory risk, good luck on raising a few million dollars to do a clinical trial," Cognoa CEO Brent Vaughan warned his fellow digital health startups. "So if you decide early on where you think you want to take the product, how you want to commercialize it, you can really kind of work backwards. And when you figure out what you want to charge, who you want to charge and where it is, you’ll probably realize that you should have figured it out earlier.”
“One of the things I’ve often heard in this space is you need to think like a biotech executive, act like a medical device entrepreneur and build like a tech team and you have to go across all of those to be successful, ” Zack Lynch, managing partner at JAZZ Venture Partners, said during a panel. “When you are thinking about designing a digital therapeutic ... what aspect of the disease process are you actually trying to modulate with your therapeutic.
"You have to be able to articulate that very, very clearly," Lynch continued. "Drawing parallels to the drug world, that is what every drug company startup has to articulate in the first slide or two of a presentation … If you can’t articulate that then sure you might get some investment now and your product might get built out, but eventually biology is going to come after you, and when you run that pivotal trial in order to try to get enough evidence to try to get reimbursement, or to try to do some sort of partnership, you are just not going to be able to gather that evidence because the start was not thinking clearly about what you are trying to change.”
On digital drug distribution and commercialization ...
“The traditional medicine models, I don’t think that’s where we should be as digital therapeutics," Akili Interactive Labs CEO and cofounder Eddie Martucci said. "I think this is a new modality, so there’s a lot of questions coming from the people that put pressure on the industry like investors, like public markets, like others, to say ‘Is the pharmaceutical model of digital therapeutics going to win? Is the B2B software model of digital therapeutics going to win?’ That puts a lot of pressure for people in our shoes to sometimes subconsciously default to some of these standard models, these standard product features, and to play it safe. I don’t think we’re ever going to demonstrate value to patients in the way digital therapeutics really can … unless we make big bets, unless we say traditional medicine not only may not be the answer, is very likely not the answer, and we need to invest and stumble a little bit, experiment [with] putting out creative models.”
“[B2C] is really hard, and costs more money than you can possibly imagine," Cognoa's Vaughn said. "Everyone thinks what the other person does is really easy — Michael Jordan thought he could hit a curveball. Guess what, it’s really hard. So, if you’ve never done consumer, if you’ve never sat around and people talk about spending tens of millions of dollars a month on acquisition, consumer is a huge beast. And the way to stay out in front is you feed the beast … You can pour tremendous amounts of money in this company only to find out that your ratios are upside down, and all you’ve done is created not a funnel, you’ve created a bucket. So if you don’t know consumer and you want to go to consumer, hire someone who’s smart about consumer.”
"You have to realize that when a disruptive technology like a digital therapeutic comes along the decisions makers in the health system are [full of] skepticism,” Anton Decker, president of health innovation at Bon Secours Mercy, said. “The first question they are going to ask, again depending on whether you are coming for a clinical goal or a financial goal, is 'How is this going to help me reduce my expenses or increase my revenue?' They probably don’t believe you if you talk about outcomes, because they’ve heard that a million times before.”
“Should we include health economics and outcomes research endpoints in pivotal clinical trials?" Joel Sangerman, CCO at Click Therapeutics, asked during a presentation The first impulse there is ‘oh my gosh, that’s going to be a lot of money, a lot of time, … but there is a simple way to get a slightly lower-level metric that can help payers cover your product, and that’s to collect the billing data from the sites and get the informed consent of the patient to do so, because if you do that you get access to all the codes and the payments that are made … and you can look at what occurred with the patients before the intervention and what happened after the intervention, and build your value composition from a health economic standpoint so you can [convince] the payer to pay for the product at launch.”
On the unique nature of digital therapeutics ...
“I think at the core of a good digital therapeutic is two things: one is learning and two is the ability to increase self-confidence and self-efficacy,” Dr. Dan Henderson, primary care physician at Massachusetts General Hospital, said. “If you think about what a lot of the digital therapeutics can do it's actually not the way we would normally describe. What they do is they shorten and improve feedback cycles. The greatest threat to human kind is delayed feedback — climate change, cholesterol, diabetes etc... The best way to improve the care for a chronic condition is to create readily available high-fidelity feedback whenever a patient is willing to get it.”
“You are taking a lot of the knowledge and responsibility out of the hands of the highly skilled clinicians and putting as much as possible in the hands of the patient who will become highly skilled,” Hendersen added.
“I don’t like when people talk about digital therapeutics as a replacement for drugs, and not because I work at a pharma company," Bozidar Jovecevic, VP and global head of digital therapeutics at Sanofi, said. “There are some disease areas where a digital therapeutic can legitimately replace a drug. There are, usually mental health. But there’s 90% more situations where they’ll be working together, in the same way that a pharma company doesn’t say you don’t need a doctor. [They’re] working together.”
On the ambiguous definition of a digital therapeutic ...
“Where I think one of the issues with lack of nuance and specifics here and only having singular examples in people’s minds is it creates a diffuse or vague blob that is digital therapeutics," Akili's Martucci said. "What I mean by that is that some people have been exposed to some of the great work Pear does, and go ‘Oh great, digital therapeutics equal cognitive behavioral therapy.’ No, that’s a great example, but that has nothing to do with what we do, which is direct stimulation of cognitive networks through sensory motor systems.
"What I think we need," he continued, "is nuance in describing the different types of products, and the types of claims and impacts they’re having on patients, and making sure that those of us in the industry are saying ‘what are the things that are add-ons to today’s medicines, what are the things that are advancing or incrementing today’s medicines, what are the things that don’t exist in today’s medicines or are doing something fundamentally different?’ When we start to lay out those examples, it allows people to have a mental framework that’s much more broad.”
“I actually don’t think it’s nearly as complicated as people present it," David Klein, CEO and cofounder of Click Therapeutics, responded. "For me … it’s always been consistent — a digital therapeutic is software that’s a medical treatment. It’s not terribly complex [but] that’s something that as the industry gets bigger, people delineating what’s digital medicine and what’s digital therapeutics may be important.”