• Center on Health Equity and Access
  • Clinical
  • Health Care Cost
  • Health Care Delivery
  • Insurance
  • Policy
  • Technology
  • Value-Based Care

What's Behind Lagging Payer Uptake of Prescription Digital Therapeutics?


In a session at the 2022 Asembia Specialty Pharmacy Summit, Jayne Hornung, chief clinical officer at Managed Markets Insights & Technology (MMIT), outlined factors driving payer hesitation when it comes to covering prescription digital therapeutics.

Jayne Hornung, chief clinical officer at Managed Markets Insights & Technology (MMIT), offered insights on slow payer uptake of digital therapeutics (DTX) at this year’s Asembia Specialty Pharmacy Summit, held in Las Vegas, May 2-5.

Hornung’s talk focused on lagging payer coverage of these technologies on formularies for medical benefit and responses to an MMIT survey sent to pharmacy and medical directors, pharmacy benefit managers (PBMs), and payers.

According to the Digital Therapeutics Alliance, DTX “deliver medical interventions directly to patients using evidence-based clinically evaluated software to treat, manage, and prevent a spectrum of diseases and disorders,” Hornung said.

However, some limitations to this definition exist as smartphone applications like those tracking diet and exercise are not considered DTX.

“The FDA typically hasn't no involvement in those types of apps. Digital medicine, on the other hand, plays a role in treating a disease and this is where the FDA ensures the product does what it claims to do,” Hornung said.

Personalized information provided by DTX can be used to guide treatment decisions or change medication doses. Some examples of these technologies include continuous glucose monitoring (CGM) devices, pills equipped with cameras that can be used in place of colonoscopies, and smart medications that inform providers whether patients have taken their doses.

Prescription digital therapeutics (PDTs) make up a subcohort of DTX and are defined as “software-based treatments designed to directly treat the disease.” Although PDTs are designed and tested like prescription drugs, instead of taking a pill, patients undergo cognitive therapy to treat the disease via software, Hornung explained.

These therapeutics can be adjunctive to traditional treatments, as is the case with CanvasDx, used to aid the diagnosis of autism as early as 18 months of age, compared with traditional methods that typically diagnose the condition at age 3 or 4.

Currently, payers aren’t covering CanvasDx, Hornung said, potentially due to the fact these products do not go through the traditional FDA approval process, but rather its de novo classification process specifically for novel medical devices.

However, this process was created in 1997. “I don't think in 1997 the FDA was thinking about downloadable apps from the App Store or Google Play,” Hornung said.

One additional route to market is the FDA’s 510(k) approval process, “which allows approval if the agency deems the device as substantially equivalent to a previously approved device or a predicate device.”

In addition to the survey conducted, MMIT also sat down with some respondents for in-depth 45-minute interviews to better understand perceptions of this field. Among responses reported, researchers found payers were unwilling to pay for “convenience” and cited a lack of “clinical value” among products reviewed.

Of the 16 payers surveyed, 12 reported facing challenges in adopting PDTs due mainly to the lack of evidence and regulatory guidance, according to Hornung. The majority of panelists surveyed (80%) ranked the priority of PDTs as low or moderate to their organization.

Furthermore, “only 30% of the panelists have received a provider request for a PDT and a majority of those requests were denied,” she said, adding this feedback illustrates the lack of groundswell from physicians and employer groups to push payers to consider these products.

“This is a great area for value-based contracting,” Hornung stressed, “we just have to set the groundwork for it.”

According to Hornung, so-called digital health formularies are not formularies in actuality, but rather a catalog of vetted apps that a payer or PBM would reimburse if requested to do so by an employer.

Additional survey findings included:

  • Payers mainly agree clinical outcomes are the most important attribute of a PDT review
  • A quarter of plans had a contract in place with PDT manufacturers
  • A minority of plans cover current PDTs, and many have never even heard of them
  • Almost 40% of payers have a structured process in place to assess PDTs; the remainder are developing one or have interest in developing one

Another PDT example is EndeavorRx, a prescription video game for children approved as an add-on treatment for certain forms of ADHD. It was approved in 2020 based on 5 clinical trials of over 600 patients.

Although the studies do exist, “payers are held back because they don't believe that there's a formal standard regulatory process for those studies,” she said.

This PDT costs $150 per month with a discounted rate for patients with no insurance. With regard to coverage, Anthem has claimed it is not medically necessary, Aetna has called it experimental and investigational, and UnitedHealthcare says it is unproven and not medically necessary.

Similar opinions were reported about Pear Therapeutics’ reSET and reSET-O, FDA-approved PDTs for substance use disorder and opioid use disorder, respectively. Both are prescription only, utilize cognitive behavioral therapy, and are indicated as add-on treatments.

Based on the survey findings, Hornung believes the lack of standard approval processes contribute to payers’ hesitation when making coverage decisions. Concerns regarding adherence measurement and reimbursement were also raised.

“Many feel the deep understanding of when, where, and how to use digital therapeutics to best serve the patient is lacking,” she added.

Recent legislation, including HR 7051, the Access to Prescription Digital Therapeutics Act of 2022, has bipartisan support and may function to broaden payer embrace of PDTs, Hornung said. This bill in particular would expand Medicare coverage of PDTs so they have a category to allow for HCPCS coding. Some products have national drug codes while some do not, posing additional billing challenges.

“Digital health is becoming an essential part of how health care is delivered,” Hornung concluded. “It's very likely that this category of health care [PDTs] is going to grow exponentially and we expect further research and evidence to support these technologies. Digital health and digital therapeutics are here to stay.”

Related Videos
Mikkael Sekeres, MD
Jennifer Brown, MD, PhD
Ted Okon, MBA, of Community Oncology Alliance, during a Zoom video interview
Virginia Kaklamani, MD | image credit: uthscsa.edu
Bevey Miner, executive vice president of health care strategy and policy, Consensus Cloud Solutions
Related Content
© 2023 MJH Life Sciences
All rights reserved.