Aug 12, 2021 8:30:00 AM | 6 Min Read

Digital Therapeutics (DTx)

Digital Therapeutics (DTx)

Digital Therapeutics (DTx) is somewhat of a new term in the healthcare realm, but this is one trend in the industry that is likely to stick around.

DTx sees web and design-based applications emerging to treat certain medical conditions by engaging with people to improve their health and wellness. In some cases, these new therapies are preventative to stop a disease or improve outcomes in chronic conditions, such as diabetes. Other DTx applications are emerging to manage conditions from birth control to opioid addiction, focusing on modifying behavior to increase patient engagement or improve medication adherence. Intended outcomes are to reduce hospitalization or prevent even more expensive health interventions. Let us look at where these applications might fit into a pharmacy benefit, and if appropriate, do so.

Why Do I Need to be Aware?
DTx applications are garnering U.S. Food & Drug Administration (FDA) approval. The intent is to land on Pharmacy Benefit Manager’s (PBM) formulary, which in turn helps these applications land a place in payers’ benefits packages1. In addition, the 21stCentury Cures Act of 2016 allows some DTx to be approved through the 510(k) pathway. This is important to highlight as the FDA offers medical device manufacturers several methods to fast-track their medical device approval process. The FDA 510(k) program appears to be one of the preferred ways for manufacturers to get a new medical device on the market quickly. The downside is, 510K requires no clinical trials and very little oversight. 

While DTx is a new trend, more than twenty-five digital therapeutics have secured a National Drug Code (NDC). And as stated previously, this translates to the manufacturer of the digital application aiming to place it on a PBM drug formulary and obtain coverage under the pharmacy benefit. Since we are in the early stages of these applications, there is still no clinical consensus regarding the cost-effectiveness or value of these digital therapies.

DTx Discussion
Differentiating DTx from other forms of technology by discussing what DTx is and what DTx is not, is an essential first step. As a new area of treatment, DTx consists of three categories.

The following table summarizes each and provides a current example.


The following table summarizes types of therapy that are not typically classified as DTx applications.  These are not typically classified as DTx because they do not fit the criteria definition of being physiological, behavioral modifying, or drug specific.


Two practical examples of digital therapy available in the market are reSET-O and Sleepio. reSET-O has various applications that lead patients with stimulant use disorders to track their substance use, cravings, and triggers. Designed for patients who are undergoing outpatient therapy to treat their substance use disorder, the system still requires a physician's prescription.

Clinicians working with patients using reSET-O can log on to a dashboard to access a patient’s data and monitor their progress. The application has a label that contains instructions on how to integrate the tool into therapeutic practice between clinicians and patients. This 12-week program requires a physician prescription and can cost as much as $9,910 per patient. In reviewing Confidio book-of-business claims for 2020, we have only seen one claim for a DTx, and the claim was for reset-O. The 1-time claim came in at a plan cost of $1407, indicating the member likely did not complete the 12-week program.

Sleepio is a digital cognitive behavioral therapy (CBT) program that improves one’s sleep without the use of pills. A yearly subscription to Sleepio costs around $500. By comparison, an annual cost of generic Ambien would be around $140, and the annual cost for Lunesta would be $5700.

Sleepio is an evidence-based intervention delivered in an office by a doctor. Working with more than two dozen self-insured corporations, the company Big Health, aims offer Sleepio to their employees. The aim is to close a treatment gap, as there are not enough providers to meet the demand for chronic insomnia help.

Member Claim Experience
Since these are digital applications, the member claim experience is different from getting a prescription for traditional medication. A member obtains a prescription from their primary care provider and fills at a pharmacy with the claim adjudicating at point-of-sale.


In considering DTx coverage under the pharmacy benefit, here are eight important questions to consider:

  1. Can cost avoidance for digital therapy applications be demonstrated?
  2. How does the DTx impact the total cost of care?
  3. Who owns the data?
  4. Who has access to the data?
  5. How is the data used?
  6. How will product updates be assessed to provide ongoing assurance of efficacy, safety, and usability?
  7. Can your PBM apply managed care tools, such as a formulary to support cost-effective care?
  8. Will your PBM allow the use of utilization management structures, such as clinical guidelines and step therapy protocols?

Closing When it comes to treating mental health and behavioral disorders, there have traditionally been two choices: medication and psychotherapy/behavioral interventions. DTx could be an exciting third option offering timely access to providers, especially in the mental health arena, which has seen access worsen, especially during the pandemic.

What we hope to see in the future for digital therapies is a common commitment to evidence-based medicine. Digital therapeutics are evaluated in clinical studies and prescribed by a medical provider, much like that of traditional drug development should through an R&D path. With this in mind, DTx coverage under the pharmacy benefit, or even the medical benefit, should be an important consideration over the next few years.





Topics: Treatments

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