For DTx Reimbursement, All Roads Lead to Payers

4 insights from one digital therapeutics startup.

Despite a startup’s unique ability to launch not only its product but its business model from the ground up, many spend years learning the same lesson: all roads lead to payers. At the end of the day, digital therapeutics (DTx) innovation is reliant on healthcare’s most entrenched framework: reimbursement.

These issues were explored in a webinar from the Digital Therapeutics Alliance (DTA) and ClearView Healthcare Partners. The webinar featured Freespira, which has developed an FDA-cleared digital therapeutic for post-traumatic stress disorder (PTSD), panic disorder, and panic attack. The webinar followed DTA’s full case study white paper and its members-only DTx Commercialization Product Launch Playbook.

Here are four insights from that webinar and case study.

1. Follow the dollar, find the end customer

Startups use product journey maps to maximize market access and reimbursement pathways. The end user and end customer may differ but, in the end, the customer is who pays. Companies must also ensure that their pricing models align with that customer.

Like many DTx companies, Freespira’s initial go-to-market strategies can be summarized as EBP: Everybody But Payer. All approaches for its panic attack DTx failed, per President Simon Thomas and for different reasons, before the company landed on health plans:

• Self-pay patients: Failed approach because patients often present with physical symptoms to their primary care physician.
• Providers: Failed due to lack of economic alignment and inability to scale.
• Self-insured employers: Failed, at least initially, because the Freespira pricing model and employer payment model (per-member-per-month, or PMPM) didn’t align. Employers’ desire to administer the DTx through their third-party administrator (TPA).

Thomas noted that the TPA model remains a challenge.

2. Two paths to payer market access

Even when Freespira realized it needed to target health plans and their focus on payment ROI, the company took two payer paths: partner directly with the health plan or indirectly through providers.

The provider approach delivers medical education to a health plan’s network. The health plan approach uses claims data to identify and make direct outreach to patients, including treatment subgroups. This includes working with multiple health plan teams. “We had the insight of working with case managers and payer sales channels.

There is also the “start and span” approach — going to market with one payer type before expanding to others. Freespira started with Medicaid, per Vice President of Marketing Sarah Koenig, moving to Medicare, then commercial. Koenig adds that each has unique commercialization considerations (e.g., Medicare’s marketing guidelines).

While president Thomas notes that payers are growing savvy beyond ROI, hurdles remain.

“Right now, the regulatory environment is pretty challenging. Health plans [are] not super savvy about regulatory pathways for DTx,” noted the Freespira exec.

3. Patients are still pivotal

“Given digital tools’ emerging role as a therapeutic approach, the point at which a digital therapeutic should be introduced to the patient often varies depending on the therapeutic area being pursued, and perspectives may differ across stakeholders.” This from the DTA-ClearView Healthcare Partners case study white paper, which adds that “a successful launch approach should account for adoption at multiple points in the patient journey, while zeroing in on the point at which patients are most likely to benefit from a new, innovative intervention.”

Freespira’s Koenig noted that while claims help identify target populations by diagnosis, starting with symptoms may be a better way to start discussions with patients.

“It’s about receptivity. It’s better to talk to them about their sleep, anger, avoidance, or unhealthy coping versus ‘Hey, let’s talk about your PTSD.’”

The white paper adds that the mental health patient journey “is often nonlinear — PTSD patients may experience symptom onset immediately after an incident or years later, while also delaying seeking treatment due to avoidance and feelings of shame.”

4. How the DTx playbook differs from pharma — but not the rest of the industry

There are multiple conversion points on the DTx journey from product-market fit to patient uptake, provider acceptance, and payer reimbursement. DTA’s commercialization playbook includes eight functional areas to help “standardize commercialization considerations for product launch and scale”: Marketing, Field Force & Commercial Ops, Medical Affairs, Patient Advocacy, Market Access, PR & Government Affairs, Distribution & Patient Services, and Compliance.

“By utilizing these tactics, companies will continue to increase disease awareness while driving acceptance of digital therapeutics and the underlying mechanisms by which these products work to treat disease. This will allow physicians to clearly understand how DTx can complement and enhance existing treatment approaches rather than further complicate them.”

Freespira’s Koenig recommends that DTx developers:

• focus on 1-2 things the product can deliver;
• apply short- and long-term marketing approaches;
• hire sales and marketing teams that know how to work with payers; and
• deploy marketing analytics at every commercialization stage.

The white paper adds: “By utilizing these tactics, companies will continue to increase disease awareness while driving acceptance of digital therapeutics and the underlying mechanisms by which these products work to treat disease. This will allow physicians to clearly understand how DTx can complement and enhance existing treatment approaches rather than further complicate them.”

Koenig added that Freespira “didn’t go with the traditional pharma playbook — education on patient condition awareness — and called focusing on “who’s writing the check an evolved commercialization approach.” That might be the case for DTx but it’s hardly true for healthcare in general. Even then, success isn’t guaranteed. Pear Therapeutics had an FDA-cleared app for substance and opioid use disorders and insomnia and Medicaid contracts with multiple states.

It still went bankrupt, blaming payers on its way to auction.