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Pharma Insights

What Changes When Medicine Goes Digital?

Authored by

Amanda Lever, BSc; Auralyn MacKenzie, BSc; Larry Blandford, PharmD—Column Editor


Precision Xtract, New York City, NY; Boston, MA


Precision Xtract performs value and access consulting services and has provided those to entities developing digital medicines. Amanda Lever is engagement manager at Precision Xtract. Auralyn MacKenzie is vice president at Precision Xtract. Dr Blandford is the executive vice president and managing partner at Precision Xtract.


J Clin Pathways. 2018;4(2):37-38. doi:10.25270/jcp.2018.03.00007

Health care has become increasingly digitalized, but until now drugs have escaped digitalization. Advancements in digital technologies are changing how we think about disease management and even disease treatment. With the arrival of clinically validated software technologies designed to treat disease, or “digital medicines,” comes a plethora of uncertainties related to how stakeholders will value these products relative to traditional medicines and how they will fit into today’s health care system. Our understanding of how value perceptions, evidence expectations, and reimbursement pathways impact coverage decisions in this new therapeutic category continues to evolve.

Many aspects of modern life continue to undergo rapid changes due to advancing digital technology—health care and medicine are no exception. Digital technologies in health care have evolved rapidly from mobile apps that track adherence to wearable devices that continuously monitor and transmit physiologic metrics in real time. Several Food and Drug Administration (FDA)-cleared prescription digital applications are now available for disease management, including BlueStar and Insulia for type 2 diabetes and the Smartinhaler for asthma. 

As today’s digital health products continue to advance, we are just now seeing the emergence of digital therapeutics that are indicated to provide clinical benefits beyond disease management. Similar to traditional pharmaceuticals, these digital therapeutics are undergoing randomized controlled trials (RCTs), seeking FDA clearance and requiring a prescription for use.

In September 2017, Pear Therapeutics’ product reSET® became the first FDA-cleared prescription digital therapeutic. reSET is a clinically validated software specified for 12-week interval use in patients with substance use disorder (SUD) as an adjunct to standard outpatient therapy. The FDA submission was supported with RCT data demonstrating that reSET, along with reduced outpatient therapy, doubled the rate of abstinence compared with standard outpatient therapy in 399 SUD patients.1 reSET is one of many products in Pear’s digital therapeutic pipeline addressing opioid use disorder, schizophrenia, and generalized anxiety disorder. Akili Interactive is perhaps the most advanced company seeking to go one step further—developing digital medicines intended for direct treatment and care. The company recently announced positive data in a pivotal trial of pediatric attention-deficit/hyperactivity disorder and has a pipeline investigating treatment of cognitive dysfunction across multiple other diseases.2 With the FDA clearance of reSET and the pending arrival of stand-alone digital medicines, it is worth considering the value of digital medicines and how they fit into our current health system.

Stakeholder Perceptions of Digital Medicines 

Prescription digital medicines are likely to face initial skepticism from providers, payers, and patients alike who may question the therapeutic activity or benefit of a clinically validated software application relative to pharmacological agents. Payers are likely to be among the harshest critics as they must determine how best to evaluate and cover these products. As digital medicines have potential “drug-like” clinical benefits, their evidence and trial data may be compared with and held to the same standard as drugs or provider-driven treatments. How payers interpret the value of digital medicines compared with available benchmarks will be a key driver of value, expected evidence, product positioning, and cost.

Inclusion of digital medicines in professional guidelines and support from regulatory bodies will also influence value perceptions. Professional societies, such as the American Diabetes Association, have started to recommend digital health technologies as effective options for disease management and prevention. Recently, the FDA also released a Digital Health Innovation Action Plan.3 The plan not only recognizes the benefit of digital health technologies to patients and the health system, it also aims to ensure timely and appropriate FDA review of effective medical technologies. The action plan calls for collaboration with patients, providers, and manufacturers to develop a new approach to digital health regulation. 

Potential Clinical and Economic Benefits

While digital medicines aim to offer clinically relevant efficacy benefits related to disease treatment, the clearest differentiator for digital medicines relative to pharmacological agents is the minimal risk of adverse events, side effects, and drug-drug interactions. This safety benefit is amplified in cases where a digital medicine is eliminating or reducing the need for long-term use of a drug with unwanted side effects or safety risks. 

There are also potential economic benefits of reducing drug use or, in the case of Pear’s reSET, outpatient services. A reduction in drug use or outpatient services translates to cost savings, not only for the payer, but also for the patient in the form of copays. It is these types of cost savings, along with meaningful efficacy and safety outcomes, that will inform the value of the therapy and guide access decisions.


Benefits of Digital Disease Management and Data Capture

The value of data captured by these technologies is likely to be realized differently across stakeholders. The ability to capture and transmit data goes hand-in-hand with the potential for increased patient engagement, provider intervention, and improved outcomes. Where providers once relied on patient diaries for data, they now have access to real-time digital information that is both comprehensive and accurate. The data can be used to inform treatment decisions and tailor a treatment plan to a specific patient. Payers could also leverage digital health data to guide decision-making, predict costs, and understand utilization trends. However, for the full potential of digital health data to be realized, providers and payers must be willing to allocate resources and time to analyze, review, and extract meaning from the data.

Challenges for Coverage and Management

The novelty of software as a treatment approach will challenge payers to decide whether they should be covering digital products and how to manage them. Currently, digital products are cleared by the FDA as class II medical devices, which are typically covered under the medical benefit. Although the medical benefit seems to be the most likely coverage option, many of the products in the space share attributes more akin to pharmacy benefit products. This conundrum could leave some digital products in limbo between the medical and pharmacy benefit. While there are pros and cons to coverage under both, optimal access will depend on which benefit has the tools and systems in place to manage “drug-like” software prescriptions, indications for use, and unconventional administration requirements.

Distribution and Reimbursement Considerations

The current model for distributing and reimbursing traditional medicines may also present challenges for digital products, which are not conventionally dispensed or “picked up” in a pharmacy setting but downloaded to a patient’s mobile device. The digitalized nature of these products creates logistical unknowns related to processing of financial transactions and tracking whether the patient has actually downloaded the software. While not insurmountable, our current system may need to evolve to determine, for example, how copays are collected and to ensure the appropriate patient has downloaded the software, among other things.

Looking Ahead

The launch of digital medicines and health technologies across a range of therapeutic areas is likely to garner increased attention from providers, patients, and payers. To date, promising clinical benefits have been achieved with digital applications, including improved hemoglobin A1c levels in diabetes patients, abstinence rates in SUD patients, and medication adherence in asthma patients. As digital medicines enter the market, payers will be challenged to evaluate these products and determine appropriate coverage and management practices. Current processes will need to evolve to account for the nuances of software treatment vs traditional pharmacological medicines, requiring input and alignment across stakeholder types.  


1. Pear Therapeutics obstains FDA clearance of the first prescription digital therapeutic to treat disease [news release]. Boston, MA: Cision PR Newswire; September 14, 2017. Accessed February 28, 2018.

2. Akili achieves primary efficacy endpoint in pediatric ADHD pivotal trial [news release]. Boston, MA: Akili Interactive Labs, Inc; December 4, 2017. Accessed February 28, 2018.

3. Food and Drug Administration (FDA). Digital Health Innovation Action Plan. FDA website. Accessed February 28, 2018. 

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