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March 08, 2024

Curavit | Med City News
Regardless of the path to market they ultimately take, DTx companies must be poised to harness and deploy data and information that can prove their products’ economic value. Without it, the innovative treatments that they produce will continue to struggle to find success.

Over the last decade, a variety of groundbreaking digital therapeutics (DTx) have emerged to provide effective management of a range of conditions, including substance abuse, sleep disorders, depression, ADHD and more. As the population ages, DTx are poised to offer innovative and cost-effective solutions to address the inevitable increase in chronic disease that will follow.

Yet despite positive efficacy and economics, healthcare professionals have been slow to prescribe or even recommend DTx products to their patients for a variety of reasons. The lack of widespread knowledge and understanding about DTx products among clinicians, as well as complications with prescribing such therapies, administrative challenges, and insufficient insurance coverage have all created significant roadblocks for getting these potentially valuable treatments into the hands of those who can be helped by them.

Moreover, the entire process of development has been fraught with challenges as well. DTx companies often struggle to conduct clinical trials for their products because of the lack of principal investigators who have enough exposure to them. And once DTx products have proven to be effective in clinical trials, they still face the daunting challenges of FDA approval and payer reimbursement, processes rooted in an infrastructure that was designed decades ago for more traditional therapies.

Proof of economic viability offers a path forward

As a result of this wide range of obstacles, too many DTx companies that produce safe and effective products that improve outcomes for patients have been unable to achieve economic viability through traditional means. Unfortunately, this circumstance is unlikely to change in the near term. Yet a solution to this vexing problem can be found in harnessing the health economic value of DTx products.

The rising cost of healthcare is a concern for everyone—patients, payers, practitioners, politicians. Because of this, health outcomes and cost-effectiveness have become increasingly important. That means that capturing evidence of the value of DTx, both as it pertains to individual patients in certain therapeutic areas as well as their impact on the broader population, has never been more important. If companies can prove both the efficacy and the value of their products, they will ultimately improve their chances at gaining access to markets, payer coverage, and clinician and patient adoption. To be successful, DTx companies must find efficient ways to capture health economics data from day one.

Many companies are choosing to bypass payers and sell directly to employers. One example is a California-based digital health company that offers programs aimed at chronic disease prevention and management. Its services are designed to empower individuals to change their behaviors and reduce their risk of chronic disease, including diabetes prevention and management, hypertension, behavioral health, and weight management. They solved this problem by designing their programs to integrate with an employer’s existing healthcare benefits to support employees in improving their health outcomes through lifestyle changes and digital coaching.

Selling directly to employers allows digital health companies to provide their technology solutions as part of an employee benefits package, helping employers to reduce healthcare costs, improve employee health outcomes, and enhance overall workforce productivity. By offering its services as part of an employee benefits package, companies can reach a wider audience, providing personalized, scalable interventions that are accessible anytime and anywhere, which is particularly appealing for employers looking to support a healthy and engaged workforce.

HEOR will lead the way to the direct-to-patient model

Leaning into Health Economics and Outcomes Research (HEOR) offers a particularly strong opportunity for DTx companies to pivot toward directly marketing to patients themselves and away from the problematic traditional prescription model.

And while the direct-to-consumer model will certainly reduce the reliance on payers and practitioners, it is also likely to increase the need for companies to effectively prove the economic value of their products to successfully convince patients to try these novel digital therapies. In fact, the bar for demonstrating HEOR might be even higher for over-the-counter solutions to overcome any fear or distrust inherent to something unfamiliar.

With the maturation of Claims and Health Information Exchanges, which enable a cost-effective and straightforward process for researchers to gain access to identified patients’ data, trial sponsors will be able to take advantage of these exchanges at scale and leverage the data for both pre-screening and health economic analysis. And as the number of decentralized and virtual clinical trial sites grows, so will the number of trials that include HEOR evidence capture. These elements will play a crutial role in the ability of DTx companies to see success with the direct-to-patient model.

Regardless of the path to market they ultimately take, DTx companies must be poised to harness and deploy data and information that can prove their products’ economic value. Without it, the innovative treatments that they produce will continue to struggle to find success.

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Joel Morse


Joel Morse is co-founder and CEO of Curavit, a virtual contract research organization (VCRO) that designs and executes decentralized clinical trials. He is an experienced operational CEO who has founded, built, and sold large global businesses in healthcare and life sciences. Previously, Morse founded C3i, a Business Process Outsourcing (BPO) healthcare provider, and built it into a global leader in tech-enabled clinical trial services, with a strategic client list that included Medidata, Quintiles, and Merck. Morse has a BS in mechanical engineering from Tufts, and an MBA from Columbia

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