Payer Perspectives on Prescription Digital Therapeutics for Psychiatric Disorders

AJMC: What barriers do prescription digital therapeutics (PDTs) face regarding adoption on formularies?

JEFFREY: The primary barrier is novelty. Few digital therapeutics meet FDA-authorized criteria for PDTs, and many clinicians remain unaware or skeptical. Concerns include efficacy, data privacy, and commercialization of user engagement. Limited transparency around outcomes and uncertain real-world impact further challenge provider and payer confidence.

Early market setbacks add to the hesitation. Pear Therapeutics and Akili Interactive—early PDT leaders—faced financial collapse or acquisition, raising doubts about sustainability and return on investment.

Nevertheless, PDTs show promise for conditions such as schizophrenia and major depressive disorder, where morbidity, poor adherence, and limited engagement are pressing issues. Realizing this potential requires the education of clinicians, payers, and patients, while developers generate rigorous evidence and clearly communicate therapeutic value to support broader acceptance and integration into practice.

AJMC: For PDTs in psychiatry, what evidence is most compelling to payers?

JEFFREY: The hierarchy of evidence is the same as for drugs. At the top are meta-analyses of multiple randomized clinical trials (RCTs), which PDTs lack. Next are RCTs, and PDTs do have rigorous trials. Designing appropriate sham controls is challenging, but clinician and payer concerns often reflect unfamiliarity rather than true evidence gaps. Many PDT studies meet FDA standards, and we should trust that rigor as we do with medications.

Real-world evidence (RWE) is also critical, providing postmarket confirmation of trial results. Yet a barrier is how this research is shared. Too often, PDT studies appear in niche journals like Digital Health, limiting visibility. Publication in widely read, high-impact journals would enhance credibility. While some PDT research has reached journals like The Lancet, this remains rare. For payers and providers, broader dissemination in trusted outlets such as JAMA, the New England Journal of Medicine, or Annals of Internal Medicine would strengthen confidence and support adoption.

AJMC: Abilify MyCite published a cost-effectiveness study demonstrating systemwide savings.¹ How compelling are its methods and findings?

JEFFREY: Health organizations evaluating new therapies—whether drugs, devices, or digital therapeutics—consider both clinical and cost-effectiveness, with special focus on reducing hospitalizations and emergency department (ED) visits. The Abilify MyCite study contributes meaningfully by suggesting potential to lower total cost of care, a key factor in formulary decisions.

However, the product’s commercial failure highlights the importance of real-world usability. Despite promising economic data, Abilify MyCite saw low patient acceptance, particularly among people with schizophrenia who viewed a sensor-equipped pill as intrusive. This reflects a larger truth: digital therapeutics work only if patients engage with them.

Adherence remains a major challenge; many patients discontinue digital tools despite strong clinical foundations, such as those supporting app-based cognitive behavioral therapy. In mental health especially, sustained use is essential to achieve benefits. Thus, while studies like Abilify MyCite’s offer compelling evidence for payers, real-world engagement and patient buy-in ultimately determine the value and impact of PDTs.

AJMC: MassHealth presented its experience with reSET and reSET-O, which demonstrated cost reduction from use of these PDTs.² Could you speak to this study and its findings?

JEFFREY: MassHealth was the first Medicaid program to cover a PDT—reSET and reSET-O for substance use disorders—after reviewing its FDA-approved indication, clinical evidence, and potential to reduce utilization amid the opioid crisis. To manage risk, we set up a performance-based contract with Pear Therapeutics requiring patient enrollment and outcome targets; if unmet, no payment was made. Our internal pre–post analysis, using patients as their own controls, showed a $722,000 cost offset in the first 300 patients, largely from fewer hospitalizations, ED visits, and detoxification services.

Though not a randomized trial, study results met contractual benchmarks and supported coverage. We also received anecdotal reports of benefit in stimulant use disorder, where few options exist. Implementation, however, was slowed by language gaps, pharmacy restrictions, and data-integration hurdles.

Pear’s bankruptcy halted the second cohort analysis, but their PDTs now run through a specialty pharmacy with wraparound services—a more sustainable model. Most mental health PDTs are adjunctive and work best when paired with medication and behavioral therapy. reSET showed that PDTs can cut costs and add value when operational, contractual, and engagement barriers are addressed.

AJMC: How do you assess the potential for PDTs to reduce hospital admissions, ED visits, or other high-cost utilization?

JEFFREY: We review both real-world data and manufacturer-reported outcomes. For Pear Therapeutics’ reSET, our internal analysis closely mirrored the data submitted to the FDA and published by Dr Yuri Maricich, Pear’s former chief medical officer, showing reductions in hospital admissions, ED visits, and detoxification episodes.³

This alignment between real-world claims and published results reinforced our confidence in reSET’s potential to lower high-cost utilization. Unfortunately, Pear lacked the financial runway to fully scale the program. Had they continued, it is likely the PDT would have demonstrated even broader impact across costly areas of care.

AJMC: A report from Peterson Health Technologies Institute suggests net savings per member with PDT use.⁴ How useful are these projections in real-world payer planning?

JEFFREY: The value of such projections depends on how well they match observed utilization and outcomes in the payer’s population. Payers need more than national averages—they need localized, claims-based evidence showing reductions in hospitalizations, ED visits, or other high-cost events.

At MassHealth, we used a performance-based contract similar to those we use for pharmaceuticals that required Pear to meet specific outcome metrics; if targets weren’t met, no payment was made. This accountability is essential. While Peterson’s report can spark interest and guide early discussions, real-world adoption requires actuarial modeling, risk stratification, and infrastructure to measure outcomes. Ultimately, we must validate projected savings using our own data to ensure they reflect true value in our population.

AJMC: How might payers decide to cover a PDT under the pharmacy versus medical benefit?

JEFFREY: The choice depends on operational and strategic factors. The pharmacy benefit allows real-time adjudication at the point of care, enabling prior authorization (PA), immediate utilization tracking, and direct linkage to downstream outcomes like hospitalizations or ED visits, which is key for outcomes-based contracting and performance evaluation.

Coverage under the medical benefit is slower and more complex. Claims often lag 30 to 90 days, real-time evaluation is harder, and providers face additional coding and billing requirements, increasing administrative burden. Payment risk and documentation responsibilities may also shift more to the provider.

A third approach is a subscription model, where payers purchase licenses or enrollments up front. This can work for some organizations but requires forecasting and infrastructure to track usage and outcomes.

Ultimately, PDTs can be covered under either benefit, but the decision hinges on data access, administrative feasibility, and alignment with outcomes-based contracts. From a managed care pharmacy perspective, the pharmacy benefit typically offers more control and smoother workflow integration.

AJMC: What policy or operational changes are needed to streamline PA processes for PDTs?

JEFFREY: Operational automation is essential. For example, at MassHealth, we configured our system to automatically approve a PDT like reSET-O if certain criteria were met—such as the patient being on concurrent pharmacotherapy like Suboxone and meeting basic age requirements. Automation enabled real-time adjudication through the pharmacy benefit and significantly reduced provider burden. Achieving this level of efficiency under the medical benefit, by contrast, is far more complex and often disrupts clinical workflows.

Any PA process that falls outside standard electronic workflows becomes an administrative hurdle. To reduce friction, health plans must integrate PDT-specific criteria into existing systems and adopt smart automation wherever possible. This requires familiarity with PDTs and close collaboration between clinical, information technology, and operational teams.

AJMC: How do you see PDTs fitting into value-based care models or alternative payment arrangements?

JEFFREY: In terms of value-based care, PDTs are a natural fit, particularly when tied to outcomes-based contracts. At MassHealth, we built performance-based agreements for PDTs that linked payment to real-world metrics like reductions in hospitalizations, ED visits, and detoxification episodes. These models allow payers to share risk with manufacturers and reward clinical impact. As more PDTs enter the market, aligning them with alternative payment models will be key to ensuring both access and sustainability.

AJMC: How can equitable access to PDTs be fostered among Medicaid members and other vulnerable groups?

JEFFREY: A large barrier to equitable PDT access in Medicaid populations is language. In our experience at MassHealth, this was a clear deficiency. For example, if a PDT is only available in English, large segments of the population—such as those who speak Spanish, Haitian Creole, Vietnamese, or Farsi—are immediately excluded from benefiting. That’s not acceptable in a program designed to provide fair and equitable access.

Equity requires more than translation—it requires cultural adaptation. A digital therapeutic built for English-speaking users may not resonate with patients from diverse cultural backgrounds, even if the language is translated. As PDTs evolve, developers must prioritize accessibility in multiple languages and consider cultural context to ensure true usability across populations.

From an operational standpoint, Medicaid programs are structurally committed to equitable access, but many PDTs haven’t yet addressed this need. Without thoughtful planning at launch or a clear, immediate road map for expanding language and cultural access, these products risk exacerbating disparities rather than closing them.

At MassHealth, we address similar challenges through 24/7 interpreter services and community-based outreach workers who help patients navigate care. These resources could also support PDT engagement. But as it stands, language and culture constitute a critical gap in the PDT landscape and one the industry must solve to treat vulnerable populations.

AJMC: What would increase payer confidence in supporting PDT adoption in psychiatry?

JEFFREY: We need 2 critical developments: better clinician education and more robust, domain-specific evidence.

Clinicians must understand that while the evidence base for PDTs may differ from that of traditional drugs, it can still be rigorous, reproducible, and meaningful. Broader acceptance will come as more data are published in reputable psychiatric journals—like the American Journal of Psychiatry—demonstrating how PDTs can serve as effective adjuncts to standard treatment.

Payers also need to see PDTs positioned within the larger trajectory of health care innovation. Just as artificial intelligence and digital tools have become integral to health care delivery, PDTs represent a natural evolution. Digital solutions are here to stay and must be evaluated on how they improve access, outcomes, and value.

Additionally, in areas like schizophrenia, where treatment options remain limited, the need is urgent. Having seen the consequences of serious mental illness firsthand, I believe strongly in expanding access to innovative tools where evidence supports their benefit. Payers should focus on identifying the right patient phenotypes—those most likely to benefit—and ensure that these patients have access through thoughtful benefit design and education.

With targeted use, robust outcomes data, and clinician buy-in, PDTs can earn a more prominent place in psychiatric care—and in payer coverage strategies.

REFERENCES

1. Chopra AS, Hadzi Boskovic D, Kulkarni A, Cochran JM. Cost-effectiveness of aripiprazole tablets with sensor versus oral atypical antipsychotics for the treatment of schizophrenia using a patient-level microsimulation modeling approach. Clinicoecon Outcomes Res. 2023;15:375-386. doi:10.2147/CEOR.S396806
2. Salsabili M, Kashalikar N, Lenz K.Evaluating coverage for digital therapeutics: a case study and lessons learned. Course given at: Academy of Managed Care Pharmacy Nexus 2023; October 17, 2023; Orlando FL.
3. Maricich YA, Xiong X, Gerwien R, et al. Real-world evidence for a prescription digital therapeutic to treat opioid use disorder. Curr Med Res Opin. 2021;37(2):175-183. doi:10.1080/03007995.2020.1846023
4. Virtual solutions for depression and anxiety. Health technology assessment. Peterson Health Technology Institute. May 2025.Accessed July 19, 2025. https://phti.org/wp-content/uploads/sites/3/2025/06/PHTI-Virtual-Solutions-Depression-Anxiety-Assessment-Report-V1.1.pdf