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Digital therapeutics has caught the eye of pharmaceutical companies as a potential balm to a host of the pharma industry’s struggles, according to MedCity News.
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Digital therapeutics is a category of software — typically in the form of consumer-facing mobile health apps — that replaces or complements the existing treatment of a disease.
Here’s what the experts said: Decision makers at some of the largest pharmaceutical companies in the world are bullish on the opportunities in digital therapeutics, per MedCity.
- Bayer G4A Director of Digital Health Ventures Javier Garcia Palacios says digital therapeutics “has the possibility to open new revenue streams that are fully independent of [traditional drugs]."
- Sanofi Ventures Senior Director of Investment Ruchita Sinha highlighted the potential of digital therapeutics to improve pharma players’ key metrics, including how to keep patients on their drugs and better manage side effects.
- Roche Director of Smart Devices Paul Upham says “digital therapeutics may be enabling for another drug … that otherwise wouldn’t come to market.”
Here’s our take:
- Digital therapeutics will face steady demand and enable pharma companies to diversify their revenue streams. Increased government scrutiny on high drug prices could lead to regulation that reduces the margins of selling traditional medications, forcing pharma companies to look to alternative streams of revenue to stay profitable. Digital therapeutics, meanwhile, represents a growing market that could complement medication revenue: We project that adoption of digital therapeutics will grow 90% between 2018 and 2023, to reach 110 million users by the end of the forecast period.
- Digital therapeutics could drive sales by boosting medication adherence. A randomized control trial found that digital therapeutic Propeller Health boostedmedication adherence by 21%, for example. Accordingly, digital therapeutics could lower the number of unfilled prescriptions and increase drug sales by ensuring patients stick to their medication regiment.
- If digital therapeutics can broaden pharma players’ drug pipeline, they’ll be massively lucrative. Commercializing drug treatments is a costly endeavor: Developing a new oncology treatment runs drug developers somewhere between $650 million and more than $2 billion over an average of seven years, for example. If digital therapeutics can augment new drugs and increase the likelihood they’ll reach the market, they’ll enable the pharma industry to alleviate substantial costs.
The bigger picture: The digital therapeutics market will take off amid mountains of funding from pharma and burgeoning interest from payers and device makers.
- The pharma industry has put its money where its mouth is. Japanese pharma company Otsuka inked a deal to pay digital therapeutic startup Click Therapeutics up to $300 million to develop and commercialize a digital therapeutic for mental health. And Swiss drug maker Novartis has participated in each of Pear Therapeutics’ funding rounds in 2018, which totaled $70 million. These deals afford digital therapeutics companies with an influx of cash that should enable them to expand their product lines.
- Payers and device makers are staking their claim in the market with acquisitions and partnerships. For example, medical device maker ResMed purchased digital therapeutics startup Propeller Health for $225 million in December 2018. And Anthem Blue Cross Blue Shield of Ohio teamed up with Propeller to improve medication adherence and health outcomes for Anthem members with chronic respiratory disease in December 2018. These early moving payers and device makers may spur additional interest in digital therapeutics from competitors in their respective industries, attracting additional funds to the market.
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Source: Business Insider – nlineaweaver@businessinsider.com (Nicky Lineaweaver)