How Healthcare Economics Outcomes Evidence Can Pave the Way for Digital Therapeutics

In the face of chronic disease, DTx have the opportunity to provide a lifeline to patients.

The world’s population is aging. In the United States alone, the number of people aged 50 and older is expected to increase by more than 60% by 2050.1 And of that older population, the number with at least one chronic disease is expected to nearly double over the same period. The increasing pervasiveness of chronic disease in the coming decades not only has the potential to threaten the lives and well-being of many more Americans, but it will also put additional pressure on an already burdened healthcare system, stretching exorbitant costs even further.

In the face of this wave of aging patients and burgeoning instances of chronic disease, digital therapeutics (DTx) have the opportunity to serve as a lifeline. The research has suggested that DTx products can save lives and improve outcomes for people living with chronic disease; in fact, a 2021 study2 showed a 52% lower risk for all-cause 30-day readmissions among patients with acute myocardial infarction (AMI), a condition that not only threatens people’s lives but also burdens an overtaxed healthcare system. Another study found DTx innovations to be highly effective in improving glycemic control and weight loss in adults with Type 2 diabetes, thereby improving their long-term health while reducing reliance on traditional drugs.3

Over the last decade, DTx therapies have also played a significant role in the effective management of a variety of mental health issues. Many digital therapies have offered solutions to substance abuse, sleep disorders, depression, ADHD, and more. According to the World Health Organization, nearly a billion people worldwide live with a mental health disorder, yet three-quarters of these individuals receive no treatment, either because of a lack of access to care or the stigma surrounding their condition.4 DTx therapies have already made headway in closing this gap by providing more options, as well as convenient and discreet access to care for those in need.

Despite DTx effectiveness in cost-effectively treating chronic conditions and mental health disorders, some could argue that healthcare professionals (HCPs) have been slow to prescribe or recommend them to patients. The reasons for this are complex and multifaceted, but they begin with the industry’s chronic difficulty adapting to change.

“When Medicare was created in 1965, the thought was that healthcare would always be delivered at the doctor’s office,” said Andy Molnar, CEO of Digital Therapeutics Alliance, a trade organization focused on the needs of the DTx industry. “It took until the early 2000s before there was even a pharmacy benefit for Medicare, so it’s not really the most progressive program.”

The lack of widespread knowledge and understanding about DTx products among clinicians, as well as complications with prescribing these therapies, various administrative challenges, and insufficient insurance coverage have all added to the ongoing obstacle of getting these treatments into the hands of those who they can help, despite their proven efficacy.

Moreover, the entire process of development has proven to be fraught with challenges as well. For example, DTx companies often struggle to conduct clinical trials for their products because of the lack of principal investigators who have enough exposure to such products. And further along in the development cycle, once DTx products have proven to be effective in clinical trials, they face the daunting challenges of FDA approval and payer reimbursement, processes that were originally designed for more traditional therapies.

The fate of Pear Therapeutics, which introduced the first prescription digital therapeutic (PDT) to treat substance use disorder and insomnia five years ago, offers a practical illustration of this challenging marketplace. Despite its groundbreaking innovation, as well as its willingness to go above and beyond the regulatory guidelines necessary to prove the efficacy of its product, Pear struggled to get clinicians and patients to adopt it and payers to reimburse it for those who did. The company went bankrupt in late 2023. According to Pear’s own research, the adoption rate for their product was just 40% among the minority of payers who had familiarity with DTx products.

Safety and efficacy may not be enough

Clearly, producing safe and effective DTx products that improve outcomes for patients may not suffice. The road to viability is longer and more daunting. One solution can be found in the health economic value of DTx products. The more that companies can prove both efficacy and value, the better opportunities they will ultimately have at improving market access, payer coverage, and clinician and patient adoption.

As healthcare costs continue to rise, payers are concerned with health outcomes and cost-effectiveness; this is particularly the cause for less-understood digital therapeutics. It’s critical to capture evidence of the value of these innovations both as it pertains to individual patients in certain therapeutic areas as well as their impact on the broader population.

“Targeted clinical trial, economic, and real-world data will drive adoption of DTx products,” Molnar explained. “Capturing the right data that proves to all stakeholders—government, commercial insurers, medical directors, providers, and patients—to adopt these products, however, is complex. It is even more daunting for DTx startups that may not have the same resources as pharmaceutical companies.”

To be successful, DTx companies must find efficient ways to capture health economics data from day one—a guideline that MedRhythms, a rapidly growing DTx company that produces neurotherapeutics, has followed.

“A cornerstone of our mission is that our products must be accessible to patients. One way we do that is through furthering our evidence development,” said Owen McCarthy, president and co-founder of MedRhythms. “We need to speak the same language as payers in order to gain traction for a new prescription-only product just as much as we need to demonstrate efficacy to providers.”

An alternative direct-to-patient model

After the demise of Pear, other leading DTx companies began to rethink their commercialization models, even bypassing the need for a doctor’s note. While these products no longer require a prescription or FDA approval, they do require the same clinical trial rigor. Companies like Akili Therapeutics5 have opted for this route to ensure broader access to their products while the regulatory infrastructure around reimbursement is established. While the direct-to-consumer model reduces the reliance on payers, it still requires proof of economic value for patients to try these novel digital therapies. In fact, the bar for demonstrating higher health economic outcomes might be even higher for over-the-counter solutions to overcome any fear or distrust inherent to something unfamiliar.

Whether they choose the traditional or direct-to-consumer commercial model, DTx companies must be able to fully harness and deploy data and information that can prove their value. Without this information, these innovative treatment alternatives could struggle to succeed, regardless of how effective they might be.


1. Ansah JP, Chiu CT. Projecting the chronic disease burden among the adult population in the United States using a multi-state population model. Front Public Health. 2023 Jan 13;10:1082183. doi: 10.3389/fpubh.2022.1082183. PMID: 36711415; PMCID: PMC9881650.

2.Marvel et al. Digital Health Intervention in Acute Myocardial Infarction. Circulation: Cardiovascular Quality and Outcomes. 15 Jul 2021.

3. McKenzie AL, Hallberg SJ, Creighton BC, Volk BM, Link TM, Abner MK, Glon RM, McCarter JP, Volek JS, Phinney SD. A Novel Intervention Including Individualized Nutritional Recommendations Reduces Hemoglobin A1c Level, Medication Use, and Weight in Type 2 Diabetes. JMIR Diabetes. 2017 Mar 7;2(1):e5. doi: 10.2196/diabetes.6981. PMID: 30291062; PMCID: PMC6238887.

4. World Mental Health Day: an opportunity to kick-start a massive scale-up in investment in mental health. World Health Organization. News release. August 27, 2020. Accessed December 21, 2023.,every%2040%20seconds%20by%20suicide.

5. Akili is Getting out of Prescription Digital Therapeutics. Managed Healthcare Executive. News release. September 14, 2023. Accessed December 21, 2023.

About the Author

Joel Morse is co-founder and CEO of Curavit.

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