It is estimated that over 350,000 digital health applications are currently available to consumers in the United States. Digital therapeutics (DTx) is a subset of digital health in which software-based products deliver therapeutic interventions to prevent, manage, or treat a medical disorder or disease. Examples of DTx applications include digital sensors, wearable devices, certain virtual reality, and artificial intelligence (AI) devices.
Prescription Digital Therapeutics (PDTs) are distinguished from other digital health technologies in that they require a prescription from a healthcare professional. They have been authorized by the FDA through the 510(k) pathway or De Novo classification process and demonstrated clinical safety and efficacy. In addition, they have been developed using regulatory standard good manufacturing practices.
The current landscape of digital therapeutics includes five main categories of applications:
Standards and Regulations
The Digital Therapeutics Alliance provides standards for validating DTx with the focus on protecting patients and providing assurance of evidence. In September of 2020, the FDA announced the launch of the Digital Health Center of Excellence, or DHCoE, which is a central resource for digital health efforts across the FDA. The DHCoE plans to develop regulatory processes and policies for digital health products. Until a standardized approval process is available specifically for DTx, their approval will continue to be governed through established medical device pathways. The De Novo or 510(k) regulatory processes currently serve as the approval options for digital therapeutics. The De Novo process classifies novel medical devices based on general or special controls that provide reasonable assurance of safety and efficacy, but there is no available predicate or similar device. While the De Novo review requires clinical trial data, it is not as rigorous as what is required for pharmaceutical medications.
Many digital therapeutics products are also cleared through the 510(k) pathway, which requires the developer to demonstrate that the new device is substantially equivalent to a predicate or existing device. In the case of DTx products, the predicate device may have been approved through the De Novo pathway.
The FDA launched a digital health pre-certification pilot program to provide a streamlined path to software product approval, allowing the FDA to approve the developer of a digital health product instead of each individual software product, thus speeding up product development and release. Products are not being authorized through the Pre-Cert Pilot Program at this time.
FDA approval lends some credibility to digital therapeutics therefore aiding in the task of getting insurers and other payers to provide coverage under the health benefit. Nonetheless, there is a significant lag in the payer adoption across the industry for several reasons.
In addition to coverage complexities, the cost of DTx programs can be difficult to determine since most products are intended to be used for a defined period of time and the associated cost of therapy are per treatment course.
Coverage and reimbursement for DTx face current challenges. In April 2022, CMS implemented a new Healthcare Common Procedure Coding System (HCPCS) code for certain digital therapeutics to help facilitate reimbursement.