Insider Perspectives on Digital Therapeutics
By Rajaneesh K. Gopinath, Ph.D.
With numerous tech giants entering into the healthcare space, the budding field of digital therapeutics is well and truly here to make an impact. Recently, a panel discussion comprising of professionals discussed the various challenges and opportunities in the field and the value that digital technology brings to patients. Here we highlight the top takeaways from the conversation.
A quick survey on a smartphone’s application store will enlighten even the most unacquainted about the rapidly blurring line between digital technology and human healthcare. Today, every individual has access to an abundance of apps for health and wellness with which heartbeat, blood pressure or even sleep cycles can be monitored and analyzed. Although this is exciting from a consumer’s point of view, the overcrowded market of substandard apps and unsubstantiated claims leads to trepidation and could impede the progress of genuine digital therapeutics of value. Apart from that, there exist many barriers in the way of this emerging field.
This was one of the major talking points in the panel discussion organized by Johnson and Johnson Innovation’s JLABS at Boston on the 9thof October. Titled “Digital Therapeutics and the Future of Medicine”, the intent was to seek more clarity on the definitions, discuss current business models, the regulatory landscape and predict the future of this new area of medicine. Cris De Luca, Global Director, Digital Innovation & Head, JLABS Boston acted as the moderator of the panel that comprised of the following experts:
- Matteo Lai, Co-Founder, and CEO, Empatica
- Antoun Nabhan, JD, Vice President, Corporate Development, Pear Therapeutics
- Vicky Zhou, Director in Healthcare, BCG Digital Ventures and
- Elizabeth Gazda CEO, Embr Labs
(Cover photo: from left to right are Cris De Luca, Matteo Lai, Antoun Nabhan, Vicky Zhou, and Elizabeth Gazda)
Changing Definition and the Nascent Jargon
Cris De Luca initiated the conversation by acknowledging how the current definitions are still in its infancy. At the moment a “digital medicine” is defined as an intervention based on software as the key ingredient which has a direct impact on disease. Like other therapeutic vehicles such as drugs or medical devices, the software too goes through the rigors of clinical trial evaluations for efficacy and safety. Although the field is very young, some treatments are already beginning to bag approvals and get integrated into practice. However, Cris is of the opinion that, albeit a few exceptions, much of the innovations in this space come from start-ups.
When the panel was invited to give a brief overlay of the field, Antoun Nabhan opened by saying that there are a number of ways in which digital technologies are going to impact medicine, right from drug discovery to medical device manufacturing. He gave several examples of companies that are creating computer software to manage their devices and interpret the data collected from them. This drives the interaction with patients at a more direct level and also supports physicians in their decision-making processes. The resulting data, in turn also acts as feedback for drug dosing and development besides assisting insurance payors in formulary preparation. All in all, data is gathered through diverse approaches, parsed for meaningful information and eventually analyzed by each stakeholder.
He explained that within that ecosystem, companies such as his are serving the niche of patient interaction. Through their patient-facing software embedded in smart phone, tablet or other wearable devices including virtual reality, they interact with patients and help them with the outcomes of their specific disease. They propose changes in behavior, thoughts (cognitive behavioral therapy) or create a call to action around a drug, or a treatment recommendation to the physician. In some cases, based on the data collected, a direct suggestion is given to the patient, to take their medications if they are about to experience a reaction. So, a lot of times they help in optimizing the drug regimen and dosage for the user.
Funding trends from an investor’s perspective
“We have witnessed a lot of maturing of this space over time, and as compared to 5 years ago when people were trying to make sense of the ‘beyond the pill’ slogan, there have been lots of successes of late,” said Vicky Zhou. “At BCG digital ventures, we particularly invest in areas where we see start-ups having an advantage through a corporate partner. We work with corporate partners such as pharma, medtech and others that have assets to help accelerate the scale and adoption of digital therapeutic products. We also look at strong product-market fit and try to hit the sweet spot of having consumer-patient engagement with efficacy”.
Navigating the unique regulatory landscape
Empatica’s Embrace was the world’s first smart watch to be cleared by the FDA for use in neurology. When asked about the challenges that they came across, Matteo Lai, the CEO said pharma companies producing traditional therapeutics have a hard time understanding patient experience and judging how effective their clinical trials can be. With a digital therapeutic, objective monitoring of the patient could be achieved and that could help the clinical trial. “We took the difficult path of getting the FDA approval and especially for a small company, it was a challenge to wade through the complexity”.
The FDA has recently devised new changes to its Digital Health Innovation Action Plan and has committed to new goals1:
- Issuing guidance to modernize policies, including the 2019 “Clinical Decision Support Software” draft guidance and “Changes to Existing Medical Software Policies Resulting from Section 3060 of the 21st Century Cures Act” final guidance.
- Increasing the number and expertise of digital health staff at the FDA.
- Developing the Digital Health Software Precertification Pilot Program (“Pre-Cert”).
Early trends and rising challenges in the space
When the conversation was steered to the quick concerns that need to be addressed, Elizabeth Gazda of Embr labs feels that companies need to continue to build capabilities to validate their technologies. From her experience, she feels that consumers are ready for innovations. She says consumers of their Embr Wave device, a thermal wristband that helps control menopause induced hot flashes in women, believe in the immense value it offers. However, in case they upgrade it to treat hot flashes resulting from a chemo regimen for instance, then it’s a whole different game because their technology has to pass through multiple levels of scrutiny and clinical validations. Her opinion is that the consumers are jaded about pharma with long R&D timelines, and adverse effects of drugs. Therefore, we will observe a trend where healthcare is driven more by consumers who take responsibility themselves by paying attention to self-care.
Partnerships in the digital therapeutics field
When the conversation was steered to the topic of valuable attributes that attract a pharma company to partner with start-ups, Antoun notes that most pharma companies want to be involved with digital therapeutics. Some associate at a very modest level by trying to figure out the right approach with few of their personnel adding a “digital” prefix to their designations. However, there are others such as Novartis, Roche or Sanofi who have a clear intent and have developed an organizational chart to integrate digital therapeutics within their businesses. So, there is a real bifurcation among pharma companies at the moment.
He cites the example of Sanofi’s partnership with the digital therapeutics firm, Happify Health to develop an app to improve mental health outcomes for people with multiple sclerosis. The basic app of Happify was already available with millions of users and a good reputation, which proved to be a key determinant in attracting a big pharma partnership. Another avenue to attract partnership is to have a successful clinical validation and then look to commercialize using that solid evidence.
Matteo opines that start-ups must be able to speak the language and know how to market and communicate their products. He shared his company’s experience in partnering with Eisai to co-promote their smart band device Embrace2, the first FDA-cleared, wrist-worn wearable in the field of epilepsy and said it was possible only through effective communication.
Vicky explained how they work from the opposite side, wherein they approach corporate partners, learn about the space in which they want to innovate, strategize together and then decide whether they want to partner with an existing start-up or build a new one. She feels the key success factor is to have good executive leadership and buy-in, because the medical and regulatory requirements are very different from a traditional therapeutic. A good leadership gives space for the digital therapeutic to develop and the start-up to flourish, but also know when to contribute and scale the product.
Elizabeth indicated that in their case they focus on customer value and that is something they could offer pharma partners who mostly do not have a connection to the end consumer. The data, insights and knowledge they gather using their app would benefit the pharma companies immensely.
Integrating digital therapeutics in the clinical workflow
Matteo feels that more than raising funds or finding partners, getting their products to patients and integrating it into the clinical workflow is the toughest of all. It needs convincing of multiple stakeholders such as patients, physicians and payors. “We want something that patients love, nurses like and doctors don’t hate” Vicky quipped. She explained that sometimes there are also cases where the hospital’s IT department has to be convinced to integrate software with their patient electronic medical record (EMR) system.
Antoun also feels there are many barriers such as physician awareness, physician recommendation and educating the financial value of the product to the payors. The best way to overcome these issues is through clinically validated data and regulatory approvals. However, there are many practical problems such as training the physicians or their nurses to adopt a prescription writing software or website for their use. Another area of challenge is to get the user experience of the app right for the patients.
Current business models
The panel agreed that digital therapeutics does have a big scope in treating both acute and chronic diseases. Elizabeth said that their direct-to-consumer product makes a good margin and if they partner with pharma, then they would come out with a licensing model where they license specific waveforms for specific applications. At the moment, digital therapeutics leans towards targeting chronic diseases that are not addressed properly by the present healthcare system.
“There is also the potential for reimbursement and that again involves a discussion with the payors and convince them with data validation and value propositions” added Antoun. Matteo shared an interesting observation that with direct-to-consumer products, they see faster revenue but then there is a plateau because the number of people who are willing to pay out of pocket decreases over time. However, the prescribed therapeutic option with reimbursement option takes more time to gain traction, but it grows steadily.
Vicky concluded the discussion by saying that they have experience with both types of business models. The goals and outcomes that companies try to achieve, will dictate which business model will be successful in the long run.
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