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January 29, 2020
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Pharma and DTx – A Match Made in Heaven?

Digital therapeutics (DTx) are a recent and innovative class of therapies and, while there have been challenges, getting pharma engaged presents a huge opportunity going forward.

The expectation is that DTx will become increasingly important as pharma looks to add value to new and existing medications, and in many quarters the consensus is that it’s not a matter of whether DTx will become widely used but when.

The price of drugs, and whether they are worth the clinical outcomes they produce, is just one area where DTx could provide a solution to one of the major issues faced by the pharma industry. The thinking is that DTx could help to solve this problem by allowing better diagnosis, treatment and coordination of care, and allowing pharma to market products with solid real-world evidence to measure and record effectiveness.

So, what should big pharma companies be looking for when they are considering working with DTx companies?

Find the Right Fit

In a recent report from Rock Health entitled Building Pharma-Digital Therapeutic Alliances, its authors noted that without historical precedents, strategies for building collaborations with big pharma continue to be developed as the sector matures.

After extensive research and interviews with big pharma clients, the authors set out some considerations when conventional pharma companies are considering working with DTx firms, including how any alliance would enhance the position of each partner with stakeholders including patients, health plans, providers, employers.

Pharma companies, who are looking to start projects with DTx innovators, should also be realistic about the likely returns on investment in the short term, it said in the report.

Reimbursement Prospects

A separate report by Business Insider Intelligence pointed out that until now there has been a lack of reimbursement in the key US market for DTx products.

This is changing in the US, where the Centers for Medicare and Medicaid Services now has arrangements in place for DTx products. In Europe, the digital transformation is also underway as Sidekick’s co-founder and chief executive Dr. Tryggvi Thorgeirsson noted in a a recent interview.

The UK’s NHS has developed a very ambitious digital strategy and, on the continent, Germany is taking exciting steps, such as allowing doctors to prescribe digital therapeutics, Thorgeirsson said.

But with so much of the healthcare market not covered, there is a huge opportunity for DTx companies as reimbursement arrangements become entrenched in the coming years. The global DTx market could be worth up to $32 billion by 2024, recent research shows.

DTx products are often targeted against common chronic conditions and with 59% of the US population having at least one of these, the market’s potential is huge. Lifestyle-related diseases account for a huge proportion of global human illness, and the rise is not ring-fenced around rich nations. Research shows that populations in resource-poor nations are also suffering from the same chronic illnesses, leading to needless deaths of millions.

There is an increasing consensus in the healthcare community that the current brick-and-mortar solution is unsustainable and the only long-term sustainable solution is prevention and management, but for example behavioral changes are estimated to stop 60% of pre-diabetes risk populations from developing type 2 diabetes. With 68% of global deaths attributed to lifestyle-related diseases, only a slight reduction will have a massive impact on a global scale.

With change on the horizon, Rock Health said pharma leaders must first decide whether they should be “first movers” or “fast followers” when it comes to DTx given the nascent state of the market.

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Look to Integrate DTx With Conventional Meds

Part of the appeal of digital therapeutics is that they may add value to existing medications or maximize the potential of those that are in development.

‘Digital pills’ have already been marketed that ensure mental health patients take their medicines, and the consensus is that this is just the tip of the iceberg.

The technology, where a tiny ingestible sensor is attached to the pill and sends a message to a smart device, is being tested in cancer as a way of improving adherence to medication regimes.

Pharma companies could look at how DTx products could also be used in this direct manner, or more indirectly to support an existing course of medication.

DTx are often designed to be used in combination with existing medicines, allowing patients to take a digital course of cognitive behavioral therapy to help with a variety of lifestyle-related health issues for instance.

Find the Right Cultural Mix

DTx products are usually seen as disruptive technologies and this could be another factor that pharma companies should consider before forming alliances.

Most DTx companies are likely to be start-ups or in the early stages of development as this is such a new field.

The people working for them may have a very different outlook on doing business than those in a pharma company that has been producing products for decades.

Rock Health’s report argues that these cultural differences can be a match made in heaven – for instance a DTx company may have the means to drive an innovative new idea to market.

But a pharma company may be able to help with robust R&D expertise and connections with regulators, as well as the financial clout to complete the clinical trials that will differentiate a true DTx product from the thousands of health apps and programs.

With careful thought big pharma could combine with DTx companies and find that the sum is far greater than the parts.

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