1. Fragmented Regulatory Environment
The Challenge: Getting a DTx approved is challenging, not least because the regulatory framework is patchy, with often unclear or differing approaches within the same market. Even though requirements to approve a new pharmaceutical medicine or drug differ across markets, there is at least some consistency.
The Opportunity: The situation is gradually becoming more structured, think the DiGA framework in Germany, the NICE digital health framework, the FDA digital health software pre-cert program, and various other country-specific frameworks.
The Challenge: Once the approval hurdle is cleared, there is still no guarantee of making any money. The complexity here warrants a separate post (or thesis), but the key barrier is the fragmented payer environment in most markets.
The Opportunity: There are opportunities for digital therapeutic companies including choosing public markets (UK NHS or US Medicaid), partnering with hospital systems, pharmacy chains or insurance companies. Other popular approaches include partnering with large employers to tap into their captive audience of employees, or partnering with pharma companies and leveraging their expertise in health economics and market access.
3. Differentiating DTx
The Challenge: Even with a great DTx there is a lot of noise out there, particularly unvalidated digital health apps. Over 350,000 health apps are available. The number of these that are regularly used and clinically validated is a tiny fraction.
The Opportunity: The framing of these DTx products as Prescription Digital Therapeutics (PDT) by companies, e.g., Pear Therapeutics was a smart move. It is important to focus on the clinical evidence base and even more vital to express what that means for patient outcomes. Ensure that healthcare professionals (HCPs) and payers don’t think ‘it’s just another app’.
4. Patient Literacy
The Challenge: Health literacy is a gap in most markets, in the US only 12% of adults have proficient health literacy. This is often a major barrier to initiating or continuing treatment where the goal is simply to get the patient to take a pill every day. When you add tech literacy into the mix and need to onboard and engage the patient with an app, expecting them to enter data and respond to prompts, the complexity can become exponential.
The Opportunity: Seamless onboarding is key, maybe the app is intuitive enough for the patient to download via a QR code and be guided through the initiation process. Maybe a chat bot could resolve the patient’s doubts. But in many cases an actual human is needed, a doctor, nurse, pharmacist, or someone from the support team to walk the patient through.