DTX Payer Landscape: Barriers and Solutions

Digital therapeutics (DTx) continue to gain momentum as a promising form of treatment for various diseases. While they are widely considered to be behavioral interventions, the reality is that these therapeutics are used for a wide variety of conditions.

DTx are software-based medical treatments that treat various medical conditions. As defined by the Digital Therapeutics Alliance: DTx “delivers evidence-based therapeutic interventions that are driven by high quality software programs to prevent, manage, or treat a medical disorder or disease.”

Those familiar with DTx are likely aware of its potential to provide behavioral interventions, including support for conditions like ADHD, substance abuse, and depression. But DTx can also support physical intervention via neuro-motor training for conditions such as multiple sclerosis, stroke, and amblyopia. By utilizing software-based solutions, DTx offers targeted approaches to address a wide variety of healthcare needs.

Despite its growing interest, the subset of DTx prescribed by a physician, known as PDTs (Prescription Digital Therapeutics), are facing substantial challenges.

PDTs have the potential to act as a solution to not only reduce rising healthcare costs but also to accelerate clinical outcomes. In fact, it has the potential to revolutionize the way healthcare is delivered across the country.

Demand is increasing, yet many payers are still hesitant to cover them – in large part thanks to laws that govern coverage, a lack of clarity regarding coverage approaches, and questions regarding evidence generation for these solutions.

Consider these obstacles:

– Unlike traditional drugs, PDTs are not required to be covered by payers; as a result, payers must make a conscious decision to cover them. This distinction is important because since their inception, payers have not typically covered PDT solutions. Recall when legislation like Medicare was first created in the 1960s, lawmakers could not anticipate innovations like the existence of PDTs and defined covered benefits in a narrow manner relative to our understanding today. Unfortunately, laws on the books have lagged behind technological advancements.

Consider the similarities to the past situation with pharmaceutical drug coverage. Before the introduction of Medicare Part D in 2006, drugs were not universally covered. A growing population of seniors helped lead the way for change. Similarly, with PDTs, there will come a time when the evidence supporting their effectiveness becomes undeniable, and a larger population will require access to these treatments.

Legislation to include PDT coverage is not an impossible task, as we consider similar reforms from our past. Beyond improved patient outcomes and real-time data collection, the adoption of PDTs can lead to significant cost savings in the healthcare industry. By empowering patients to take control of their own healthcare and manage their conditions using safe and effective digital treatments, the trajectory of healthcare costs can be altered.

– Payers also encounter logistical challenges when it comes to implementing PDTs. As they navigate this new territory, payers find themselves grappling with several questions that require careful consideration. How to assess the quality of evidence supporting PDTs? And should PDTs adhere to the same standards as pharmaceuticals to be reimbursed?

Many perceive PDT coverage as complicated, but it may not be as complex as it initially appears. The challenge lies in the fact that payers are accustomed to making decisions for treatments via well-defined pathways; however, these pathways are not yet agreed upon for PDTs. The unfamiliarity and lack of a clear roadmap can make them seem like a logistical nightmare from the payer’s perspective.

It’s, therefore, crucial to demonstrate that incorporating PDTs into the reimbursement process can be similar to the current practices for traditional treatments. Experiences in this area are still in their infancy, but feedback from payers shows that existing processes do not need to be entirely revamped for these products.

– Finally, another key issue is the expectation of demonstrating outcomes and tangible results – drugs have a clear pathway for this requirement, but PDTs do not. In addition, smaller PDT companies do not have the same level of resources as biopharma to invest in large-scale, costly clinical trials. This has led many to question whether PDTs should be required to follow the same clinical development pathway as drugs.

We all know that movement is beneficial to health outcomes. The question is, does a PDT need to prove the outcomes from motor training? Or does it just need to demonstrate that the training is delivering the requisite heart rate and that the range of motion for the patient is changing? The same question applies for behavioral interventions There is a large body of evidence that training the mind can help reduce pain, anxiety, and other conditions. Given those results, where does the burden of proof lie for a PDT – to demonstrate that behavioral interventions work or to demonstrate that the delivery mechanism of the PDT works?

Given that many treatments are often criticized for being too expensive, is there a way to reduce the cost burden of clinical trials? If the goal is to reduce the cost of the healthcare system and improve outcomes, we must also create a pathway for pragmatic clinical trials.

Let’s recognize that change is hard – but we should be encouraged by the questions that payers are asking. The fact that questions exist means that there is an inherent value in the dialogue. Where there are questions, there will be answers.

Today, many insurance companies are creating innovation arms – a welcome step in the right direction, including their emphasis on exploring pathways to develop value-based agreements that are aligned with generating evidence. These pilot approaches linking early access to the development of real-world evidence to positive outcomes will be critical in ultimately offsetting the cost of PDT products – a win-win situation for all stakeholders involved.

There’s a reason to be optimistic about the future of PDTs. Innovation can and should be disruptive. The challenges that are initially met with resistance will almost always turn into viable, sustainable solutions. The key is that we continue to engage in dialogue that leads to real change.

Photo: Anastasiia_New, Getty Image

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