Digital Medicine Payment: A Wild West
Achieving revenue for digital medicine in the U.S. is far from straightforward. Policymakers and industry institutions are working toward a better way. Digital medicine developers should persist with a focus on keeping the value-buyer gap closed.
Case: EndeavorRx and Digital Therapeutics
If you don't know, there's a video game treatment for ADHD, EndeavorRx. It's a digital medicine, approved by the FDA for the treatment of ADHD in kids. There's also an over-the-counter version, EndeavorOTC, marketed to adults. I have been following this company for a while. It is fascinating to see an "app" go through market approval like a pill or a pacemaker (for insiders: this went through the de novo pathway at CDRH). I have believed for years that apps can help us be healthier, and I want to see more of them on the market. But, I want them to be proven, which means clinical trials or other types of evidence that they work. And I want their claims reviewed by FDA.
Because otherwise, it is a heck of a lot of work for me, personally, to decide whether I want to use a treatment. There, I said it. I'm lazy and don't want to do all the research about efficacy and safety before I decide to commit 25 minutes a day for six weeks to increase my focus (or that of my kids).
This month the company that makes the game, Akili, announced a business transformation: they're skipping the red tape (my words). Instead of sticking to the traditional route of FDA approval and then seeking reimbursement from CMS and private insurers, Akili will focus entirely on over-the-counter revenue. This means I get access to the $26/month app if I want it, without having to wait for FDA to clear the prescription version indicated for adults (and Akili doesn't have to wait for my insurer to decide whether to pay for it to get my money).
Akili is a business expense for me, so downloading it was a no-brainer (side note, I didn't read the fine print...I hope downloading for research purposes isn't barred). But what about the scores of people who can't access ADHD medication due to shortages and families with multiple people with ADHD who all want to try it but don't want to shell out $100 for a family of four? If you're looking for my advice (you shouldn't, I'm not a doctor), I'd say talk to your medical provider about your options (ha).
Payment for digital medicine
Back to the point of payment. It is no surprise Akili is going rogue, circumventing the barriers the market has put in front of it. In a recent report by AMA called "Future of Health: Commercial Payer Coverage for Digital Medicine Codes" I expected to see which codes would cover EndeavorRx and other similar therapies. It appears that there isn't even a category that resembles this technology (see the figure below).
Where does this leave Akili?
If it can survive and this works well, great! But I fear that their total market access will be lower if they don't go through FDA and CMS. And therefore patients will miss out. I'm guessing this isn't the last pivot for this company. Maybe they'll go OTC first, then get approvals for expanded labels via real-world evidence studies (sign me up!) (My statements here are predicated on the assumption that their product is awesome and valuable for patients based on the FDA approval and what I've read.)
Advice for Digital Medicine Developers
Persist! If you have resources to send to DC and participate in these policy and institutional changes, go for it. If you can get breakthrough designation, make heavy use of FDA's free consulting options!
If you can't, keep developing and remember to communicate the value you're creating to the person who can buy it, or strongly influence buying it. If the tech makes a patient's life better, and they can observe that, market the evidence to them. Diabetes developers are doing this more and more. If the tech makes a patient's life better, only the doctor can see that, market the evidence to them (and conduct the necessary research to prove it). If the tech makes a hospital run better/safer/quicker, market to their executives.
Don't make the mistake of marketing clinical results alone. Even if they're strong, you have to close the value-buyer translation gap.