A new class of therapeutics known as "digital therapeutics" (DTx) has been made possible by the evolution and widespread adoption of technology, specifically in the areas of artificial intelligence, deep learning, and health monitoring using wearables, changing medical protocols, the need to reduce costs, and these factors are all influencing to the transformation of healthcare.

The global digital therapeutics market pegged at $ 2.2 billion (2020) is set to gain momentum. The next phase of expansion is probably going to be fueled by expanding pharma-digital therapeutic alliances, increasing focus of digital therapeutics companies on mental health, psychiatric conditions, and cognitive impairments, gradually improving reimbursement situations, a favorable funding environment, and a strong pipeline of digital therapeutics products.

Digital therapeutics are products (software programs) that deliver evidence-based therapeutic interventions to patients to prevent, manage, or treat a medical disorder or disease (Source: Digital Therapeutic Alliance). To optimize patient care and health outcomes, they can be used alone or in combination with other therapies, medications, and medical devices.

Digital therapeutics is poised to revolutionize the healthcare industry. It finds usage across a range application such as Diabetes, Chronic Respiratory Disorders, Musculoskeletal Disorders, Smoking Cessation, Cardiovascular Diseases, CNS Disorders, Obesity and Others. It offers immense value for multiple stakeholders. A growing number of key stakeholders, including the FDA, HCPs, Payers, and Patients, are now accepting digital therapeutics as a form of therapy.

The following benefits for the stakeholders across the healthcare spectrum testifies the potential for digital therapeutics.

  • Patients: On-demand and easy access to clinically-validated therapies, treatment and care. Personalized and flexible care for many chronic conditions
  • Providers: Digital therapeutics can be used as a monotherapy or in concert with other therapies to optimize patient care and outcomes. Physicians/caregivers can support patients remotely and monitor their response to treatment without an office visit thereby leading to a lower cost of care. It also provides them access to novel treatment options
  • Payers: Improved clinical & health outcomes, disease prevention and reduction in overall medical costs
  • Pharmaceutical Companies: Pharma companies could benefit from data collected by digital therapeutics companies about patient and their condition. Through digital therapeutics, pharmaceutical companies can improve the efficacy of their existing therapies. digital therapeutics can also be used in clinical research to speed the drug approval process. Example - Bayer, Otsuka, and Sanofi’s investments into digital therapeutic start-ups

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The digital therapeutics market has also attracted attention of several investors and they too are aligned on the value of digital therapeutics.

Consider the following facts that has made digital therapeutics so fundable.

  • Data Collection Capabilities: Digital therapeutics can collect an huge amount of patient health data which can be used for personalized treatment of patients, enable data-driven care for providers and improve health outcomes
  • Effective Tool for Chronic Conditions: Chronic conditions continue to increase in prevalence and has debilitating effect on the healthcare system. Digital therapeutics has emerged as an effective tool for chronic disease management
  • Digital therapeutics Supported by Clinical Evidence: Since digital therapeutics products are backed by clinical data, there is clinical evidence of it being effective
  • Cater to Unmet Needs: Digital therapeutics has showcased potential to address many chronic conditions which have unmet needs such as treatment-resistant depression and opioid addiction
  • Strong Positive Outlook: The estimated market potential of digital therapeutics outweighs the hurdles

Geographic Snapshot: Digital Therapeutics Market

Comprehensive regional assessment of the global digital therapeutics market covering U.S., Europe (Germany, Italy, France, Spain, UK, and Rest of Europe), Asia-Pacific (India, China, Japan, Australia, New Zealand, Singapore and Rest of Asia-Pacific) and Rest of the World (Latin America, Middle-East & Africa) suggests that U.S. is likely to continue its dominance in the next 10 years.

The U.S. digital therapeutics market is expected to rise due to factors like an increase in the incidence of chronic diseases, favorable government policies and grants, increased public awareness about the importance of digital therapeutics, and a well-developed healthcare infrastructure. Facilitation of digital therapeutics led by Pharmacy Benefit Managers (PBMs) in the U.S. is also expected to fuel its adoption.

For instance,

  • In Dec 2019, Express Scripts announced that digital therapeutics solutions would be added to its digital health "formulary”.
  • In June 2019, CVS Caremark unveiled a platform that enables payers to formalize and streamline the process for digital therapeutics reimbursement and distribution.

Psychiatry Remains #1 Application in Clinical Trials of Digital Therapeutics

A review of trends of digital therapeutics clinical trials over the past ten years suggests that with respect to therapeutic areas (TA) under investigation, the highest percentage of trials were conducted for psychiatry indication followed by cardiovascular, addiction, endocrinology, neurology, and respiratory indications. Strong pipeline of digital therapeutics products across diverse application areas - neuroscience indications, cardiovascular diseases, gastrointestinal diseases, chronic kidney disease (CKD), among others is likely to provide impetus to the global digital therapeutics market.

Various strategies Adopted by Players to Establish Their Foothold in Digital Therapeutics Market

Players operating in the digital therapeutics market are implementing various strategies to expand their foothold into the market.

For instance,

  • In Jan, 2021, etectRx (Digital Health Company) entered into an agreement with Pear Therapeutics to develop up to two product candidates in the Central Nervous System (CNS) space combining Prescription Digital Therapeutics (PDTs) and adherence sensors. The collaboration explores the use of digital pill solutions with PDTs.

Through their work in Digital Therapeutics over the years, Medi-Tech Insights understands the intricacies & nuances of Digital Therapeutics and has successfully assisted many established players, start-ups to grow revenues by 10x.

Business Models and Competitive Landscape Analysis of Digital Therapeutics Market

Citing the lucrative prospects of the market, several new players have entered the digital therapeutics market. Players such as Hinge Health, Thirty Madison, Akili Interactive and others have witnessed significant funding’s and are expected to carve a niche for themselves.

There are now many different business models being used, but considering the early stages of digital therapeutics, it will probably take a few years to determine the most suitable one for scaling and commercializing a digital therapeutic successfully.

In terms of competitive landscape, the digital therapeutics market is marked by presence of both established players and several small players. Some of the prominent players operating in this market include Pear Therapeutics, Voluntis, Akili Interactive, Click Therapeutics, WellDoc, among others.

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About Medi-Tech Insights

Medi-Tech Insights is a healthcare-focused business research & insights firm. Our clients include Fortune 500 companies, blue-chip investors & hyper-growth start-ups. We have completed 100+ projects in Digital Health, Healthcare IT, Medical Technology, Medical Devices & Pharma Services.


Ruta Halde

Associate, Medi-Tech Insights

+32 498 86 80 79

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