Digital therapeutics are poised to take off in 2019
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Israeli pharmaceutical company Teva Pharmaceutical earned FDA approval for a new digital therapeutic system, the latest in a slew of approvals and deals that prime digital therapeutics for a breakout year in 2019.
Digital therapeutics is a category of software - typically in the form of consumer-facing mobile health (mHealth) apps - that replaces or complements the existing treatment of a disease. Teva's system includes an inhaler equipped with built-in sensors that transmit inhaler usage data to an mHealth app to offer patients and providers insights that can inform prevention and better treatment of asthma and chronic obstructive pulmonary disease (COPD).
Teva's new software could help reduce unnecessary readmissions and respiratory disease costs. The inhaler usage data captured by Teva's app could help providers promote medication adherence - and help reduce 30-day readmission rates, which are somewhere between 10% and 20% for discharged COPD patients, per a study published in the Journal of the COPD Foundation.
Avoidable readmissions are a costly pandemic for providers: The Centers for Medicare and Medicaid Services' readmissions reduction program levied $564 million in penalties on hospitals for unnecessary visits made between October 2017 and September 2018, per NEJM Catalyst. And insurance companies will likely value any tool that could improve COPD outcomes: Private payers paid out about $5.8 billion in COPD-related costs in 2010, per the most recent CDC estimates.
Digital therapeutics are poised to take off in 2019, buoyed by ample funding and a favorable regulatory environment:
- The US Food and Drug Administration (FDA) has paved the way for innovative products to come to market with a number of novel digital therapeutic approvals.In addition to Teva's approval - the first-ever clearance for an inhaler with built-in sensors - the FDA also gave its first-ever clearance to a prescription digital therapeutic for substance use disorder in November 2018. The FDA's willingness to approve innovative therapeutics should send a positive signal to device makers to bring additional products to market.
- Deep-pocketed healthcare companies are pouring money into digital therapeutics. For example, Swiss drug maker Novartis has participated in each of Pear Therapeutics' funding rounds in 2018, which totaled $70 million, per Crunchbase. And medical device maker ResMed purchased digital therapeutics startup Propeller Health for $225 million in December 2018. These deals, which are being made by large players in the healthcare sector, are affording digital therapeutics companies an influx of cash to expand their product lines, and may also create a competitive environment that attracts additional healthcare players to the market.
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