Looking Back & Ahead at the Digital Therapeutics Industry
By: Owen McCarthy, President & Co-Founder, MedRhythms
MedRhythms strives to keep its finger on the pulse of the digital therapeutics (DTx) industry in order to draw actionable insights about an industry that has the promise of improving clinical outcomes for millions. An important part of this process has been systematically cataloguing, tracking and analyzing when and how new DTx products have been introduced to the market, and we are excited to have the opportunity to share our findings from the data we have collected.
The dataset discussed in this article was derived from both news and social media sources, gathered between March 2020 and October 2020. The internal team used a broad definition of what constitutes a DTx and, as such, the data is not limited to PDTs (prescription digital therapeutics) and includes other digital health offerings. We synthesized the data into two graphs to show directional trends for the industry since 2010.
The first graph depicts the total number of DTx products that were focused on each disease area category and were first mentioned each year since 2010. It shows the fraction of products in this total each year that are focused on each disease area category. The second graph shows the total number of DTx products that were first mentioned each year since 2010 and the fraction of these products that are in each stage of development.
Because all of the figures referenced throughout this article are based on data from a living research initiative, it is understood that the insights derived from the data will be constantly evolving. The MedRhythms research team is continuing to collect data on an ongoing basis and will publish updates as datasets are refined and additional trends take shape. While this article will dissect DTx market growth by date of first product mention, further pieces may explore the DTx landscape in terms of financing, support for specific disease states and more.
Figure 1
At a high-level, Figure 1 provides a snapshot of the immense and rapid growth that’s taken place within the DTx industry over the past decade; while just 3 DTx products were announced in 2010 (e.g BlueStar), 74 DTx products had been announced in 2020 as of this past October. Figure 1 indicates that the combined neurology and neuropsychiatric categories encompass the majority of DTx products announced during 2020 as well as in nearly every year prior.
The “other” category has grown significantly in comparison to previous years, in part due to the inclusion of immunology and infectious disease solutions within this category. As the world’s greatest scientific, technological and medical minds have spent the majority of 2020 combatting the COVID-19 pandemic, experts are increasingly looking toward advanced technology in order to solve what has become an ongoing world health crisis. With digital triage and remote care capabilities having gone from a “nice to have” to a “need to have” almost overnight, the healthcare journey has been disrupted not only from a patient experience perspective, but also from provider, research and development, and payor standpoints. This disruption is certainly not exclusive to those seeking or facilitating care related to COVID-19, as we witnessed significant growth in the number of DTx solutions for oncology, which was included in the “other” category as well, during 2020. This suggests that, while they were few in number and narrow in focus a decade ago, DTx products are now recognized as a viable care option for a multiplicity of diseases due to an evolving understanding of and confidence in these products.
In keeping with pre-pandemic trends, the neurology and neuropsychiatric disease categories have demonstrated the highest growth rate over time, consistently receiving heavy investment from the DTx industry. This heavy investment is driven by the prevalence of unmet needs among those living with neurological and psychiatric diseases, including stroke, Parkinson’s disease, multiple sclerosis, Alzheimer’s disease, and depression. With the cost of bringing a drug to market estimated to be as high as $2.9B and return on investment nearing 0%, DTx interventions present a unique opportunity to provide cost-efficient care of the highest quality. These products aim to “treat the source” by either altering behavior or directly stimulating the brain. In MedRhythms’ case, our DTx products target neural circuitry to trigger our mechanism of action, auditory-motor entrainment. Due to neuroplasticity, this can — over time — lead to lasting physiological changes toward clinical outcomes, including improvements in walking speed and reduced fall incidence (Thaut et al., 2018). In a previous article, MedRhythms explored why the mechanism of action is central to all DTx products and how it differentiates DTx interventions within the broader digital health landscape.
Figure 2
Figure 2 represents a handful of interesting takeaways. First, the volume of products represented by the purple boxes suggests that we are just starting to see a critical mass of commercial stage DTx offerings. Given this observation, soon to follow should be more clarity regarding appropriate reimbursement models, go-to-market strategies and business models — it would be expected that a handful of these products within the launch/commercial stage achieve scale, thus providing blueprints for companies that follow behind them. Looking toward the future, the establishment of repeatable, reasonable and understood business models could also trigger increased M&A activity.
It is interesting to note that in 2020 there were a lot of products mentioned for the first time while in the launch phase. It is likely that this could be a result of a rapid reaction to the COVID-19 pandemic coupled with the fact that companies are staying quiet during the evidence generation stage of product development.
The DTx pipeline continues to fill up with different products as demonstrated by the large number of pre-commercial stage products debuted in 2020 — this, coupled with the hypothesis that companies are waiting longer before they announce their product intentions, makes clear that there is a strong pipeline of DTx products. In alignment with other industry analysis and analyst reports, MedRhythms’ research shows a significant uptick in the number of DTx products that are announced each year, a particular focus on disease states with high unmet need, and a growing commitment to demonstrating clinical efficacy ahead of commercialization. Yet, despite these positive growth indicators, patient accessibility remains hindered by, among other factors, problems of reimbursement. A forthcoming article will explore the state of the reimbursement landscape as it relates to DTx products and the role of CMS in facilitating DTx adoption.
