Digital therapeutics is a new milestone in the healthcare industry.
Digitalization and increased intellectualization are irreversible developments that are sweeping the healthcare area. The digital transformation trend in healthcare is not only reflected in online registration and payment but also in reforming the diagnosis and treatment approaches. Digital therapeutics is a radical departure: imagine that the prescription given by the doctor is not in a solid form but more like an app or a video game. You can treat or manage your diseases by interacting with a digital device. Can digital therapeutics only be used as a supplement to medical devices and drugs, or can it develop into a unique existence in the future and show itself more than able to stand up to traditional treatment? With such questions and expectations in mind, we will study the digital therapeutics industry and conduct in-depth interviews with industry celebrities to complete this series of articles.
Definition and current situation of digital therapeutics
The Digital Therapeutics Alliance has clearly defined Digital Therapeutics (DTx) in its report. That is, DTx delivers evidence-based therapeutic interventions driven by high-quality software programs to prevent, manage, or treat a medical disorder or disease. They are used independently or in concert with medications, devices, or other therapies to optimize patient care and health outcomes.
We believe that the most important priority is to ensure the safety and effectiveness of DTx, and the therapy must be based on clinical evidence and driven by artificial intelligence.
Currently, numerous companies are telling stories under the banner of digital therapeutics. Most of them simply integrate the resources of all parties through the Internet platform. However, truly evidence-based and AI-driven therapies are buried in many press releases, making it difficult for all stakeholders to distinguish between them. EqualOcean is preparing the 2022 Digital Therapeutics Industry Research Report to sort out the enterprises in a different disease area that really focus on researching and developing products and summarizing the appropriate business models and future development directions in various vertical diseases.
We look forward to finding out the leaders in various vertical disease fields and outlining practical solutions.
How does DTx revolutionize the healthcare system?
The existence of unmet clinical needs and the pursuit of serious medical treatment has led to the rise of digital therapeutics. As more and more players enter this field, the boundaries of digital therapeutics are constantly expanding, and the stakeholders of the entire healthcare system will benefit.
For patients, digital therapeutics can provide more convenient, high-quality and personalized medical services, expand medical service access channels, and reduce the overall diagnosis and treatment costs. The online mode improves the accessibility of high-quality medical resources and can significantly improve the equity of medical resource allocation. Patients in areas with high time costs or less developed economies can benefit. At the same time, digital therapeutics can also alleviate the patient's shame feeling. In addition, digital therapeutics will provide personalized prevention, treatment or management interventions according to the information input by the patient, to improve the patient's condition and health outcome. Digital therapeutics has the characteristics of Internet products, whose meager marginal cost can reduce the patient's burden in the clinic.
Healthcare providers can also benefit from digital therapeutics, and the most important point is to improve the operation efficiency of the hospital. Digital therapeutics can not only replace the highly repetitive work to improve the physician's diagnosis and treatment efficiency but also enhance recovery after surgery and improve hospital bed turnover rate. Through digital therapeutics solutions, physicians can timely monitor the prognosis of patients, foster their engagement, and access disease management data that were difficult to collect in the past. Also, they can provide patients with full life cycle services from prevention, treatment, follow-up and management.
In addition, digital therapeutics can provide a large amount of real-world data for pharmaceutical and medical device companies to help research and develop their products. This may also be the reason why Novartis, Abbott and other pharmaceutical giants are getting involved in digital therapeutics. The huge amount of data generated by digital therapeutics will far exceed the randomized controlled trials. These real-world data can be used for product development and upgrading and help these companies better understand market demand and achieve accurate marketing.
The application of digital therapeutics in the insurance sector is in line with their companies' risk management. In addition, insurance companies can also use the collected data for actuarial statistics and develop new insurance products. One example is the cooperation between the insurance technologies Yuanxin Huibao (Chinese: 圆心惠保) and the digital therapeutics company Best Covered (Chinese: 博斯腾科技). Best Covered can provide Alzheimer’s screening services for the elderly covered by Yuanxin Huibao, and the insurance technologies can share customer resources with Best Covered to achieve a win-win situation. Insurance companies served by Yuanxin Huibao also need digital therapeutics. Best Covered provides help for their policyholders with health management and reduce expenses.
Of course, there are risks of disclosure and abuse of customer data collected by digital therapeutics companies, and the data transaction issue, as well as the confirmation of data rights, are questions that still need to be explored.
China's medical resources are distributed unevenly in different regions, and most of them are concentrated in big cities. People often need to travel long distances to tertiary hospitals in Beijing or Shanghai for high-quality healthcare services. This imposes not only heavy burdens on these hospitals but also harms the balanced development of healthcare in China in the long run. According to the '14th Five-Year Plan on National Healthcare Security' issued by the General Office of the State Council, China is going to ensure that basic healthcare security is more equitable and inclusive. Also, the responsibilities of all parties should be more balanced, the scope and standards of the security more compatible with the level of economic and social development, public services more accessible and the gap between systems, populations and regions gradually narrowed. The redistribution function of healthcare security will also be continuously strengthened. All the achievements listed above are what digital therapeutics can accomplish. Digital therapeutics can integrate the treatment plan, experience and knowledge from top hospitals and provide them to a wider population, especially those who are difficulty obtaining high-quality health resources.
The changes brought by digital therapeutics to the health system also contribute to the value of digital therapeutics products. Currently, most Chinese digital therapeutics companies have not successfully commercialized, and commercialization is also the core bottleneck for the digital therapeutics industry. The payers of digital therapeutics are nothing more than patients, healthcare service providers, pharmaceutical companies or employers. The following analysis articles will describe the business models suitable for each vertical disease.
Promising Chinese Digital Therapeutics Companies
According to a report from Iqvia, 68% of global digital therapeutics are psychological and psychiatric products, which may be related to the FDA's giving a green light to the regulation of mental health digital therapeutics during Covid-19. This is also in line with our review of domestic digital therapy enterprises. We have selected representative enterprises in various fields to draw the following industrial maps. If there is any omission, please contact us.