Prescription Digital Therapies: The Big Disconnect Between Manufacturers and Payers
Prescription digital therapies (PDTs) are apps that persons with disorders can only download to their smartphone with a doctor’s prescription. They are generally meant to be used as an adjunct to drug therapy and/or live counseling, depending on the indication. For example, for behavioral health problems like opioid-use disorder or substance-abuse disorder, they are prescribed by the behavioral health provider and used in conjunction with 
counseling sessions. In addition to addiction-related disorders, PDTs have been introduced for sleep dysfunction, post-traumatic stress disorder, attention deficit disorder, and a range of other mental health issues.
Unlike other digital health apps, PDTs can only be used by prescription, and they are considered an active form of treatment rather than a wellness app. They must be cleared by the Food and Drug Administration for use (like a medical device, not “approved” like a medication) They rely on cognitive behavioral therapy and often gamification, to engage the patient who has cravings, for example, between live sessions, and help them stay on medical treatment.
The American Psychological Association reported in 2018 that PDTs could potentially replace, in some cases, medication-based treatment. One might have thought the COVID pandemic, which made provider visits much more difficult and restrictive, might give a boost to PDTs as a powerful extension of active treatment. However, their potential value has not yet been matched by actual utilization, and manufacturers of PDTs have had a rough go of it.
First introduced in 2017 by Pear Therapeutics, PDTs and their manufacturers have had an uphill struggle gaining uptake by providers and coverage by health plans and insurers. Pear, a leading proponent and pioneer of PDTs, went bankrupt in April 2023. Akili Interactive, another early player, laid off nearly 50% of its workforce this year, and Better Therapeutics, which had developed a PDT for patients with type 2 diabetes, closed their doors this year.
Based on my past work with Pear and other PDT makers, part of this problem is self-inflicted, in terms of how PDTs are tested. Another issue relates to the lack of adequate coding for reimbursement. I’m not sure if their focus on mental health disorders is a contributing factor, but it doesn’t help (mental health disorder treatment is not always considered with the same priority by payers as other medical conditions).
Payers may be less-than-enthused about covering PDTs, because they wonder whether a manufacturer will still be operating in the near future. More often though, they express that their lack of coverage of PDTs is related to dissatisfaction with the clinical efficacy evidence provided by the manufacturers. The evidence is often related in terms like maintaining abstinence or adherence to medical therapy. Obviously, maintaining abstinence in a person with a substance abuse disorder is a key desired outcome, but the payers are concerned on two fronts: (1) the improvement is typically incremental and (2) the studies are almost never conducted over a sufficient term to determine whether a PDT has an adequate duration of response.
The key differentiating feature of a PDT over another digital app is that it is available only by prescription. The inference is that it is a more “serious” or “effective” approach. That same marketing characteristic, which should have been a benefit for manufacturers, also inherently limited its utility. As a prescription, payers would also have to ascribe some duration of approval before covering a refill. In a PDT’s case, 13 weeks, the duration of a clinical trial, is too short. Even if the manufacturer could prove that a significant population was helped by its PDT over that course, how many additional people would continue using the app or no longer receive significant benefit for a chronic condition like substance-use disorder? Thus, pricing the prescription could be a dicey prospect. Without long-term evidence that would convince payers, they would resist coverage, unless the PDT was priced very low.
The Digital Therapeutics Alliance, a trade association of PDT manufacturers and other interested parties, recently announced its own accreditation program to address the efficacy standards of PDT makers as well the security of the apps. Administered by a separate nonprofit, the accreditation program may add additional rigor and confidence to the evidence presented to payers in the future.
Right now, payers are skeptical that the existing evidence justify the prices on individual PDTs. Without supportive cost-effectiveness studies, health plans and insurers will not likely change their views.
