Since Pear Therapeutics, one of the first digital therapeutics companies, filed for bankruptcy in April. There were discussions on the status of investments in digital therapeutics, existing challenges in standards of care, barriers to adoption and how to succeed in the industry.
Andy Molnar, CEO of We sat down with the Digital Therapeutics Alliance, a nonprofit organization that provides thought leadership and education to drive adoption of digital therapies Mobile Health News to share his insight into the digital therapy market and the impact of Pear’s bankruptcy on the industry.
Mobile Health News: What is happening in the digital therapeutics space and what impact do you think Pear’s bankruptcy will have on the market?
Andy Molnar: It’s such a strange year because this was one of the first years that we saw Medicaid coverage evolve very rapidly, building on the momentum of last year. We’re seeing payers taking digital therapeutics more seriously, and at the same time it’s really hard to get venture capital funding where five years ago it was thrown around lightly. However, at that time we did not know how these products should be paid for. Now we actually see a way. So it was really hard for me to grasp how these two big things are happening at the same time. It’s really hard for me to reconcile that in my head.
Today, we continue to make sure everything progresses as intelligently as we can. I mean digital therapeutics, prescription digital therapeutics and digital health in general are obviously not going away. It’s here to stay and we’re here to help guide it. And when we started five years ago, we just weren’t as smart as we are now.
Maybe it’s just a nice reboot, you know? A lot of people say, okay, how much money does it really cost? How much do we really need? Where are you using your resources? So we put one together Start playbook to help our member companies understand where to best deploy their resources.
MHN: Do you think vendor acceptance rates and payer reimbursement are slowing down the advancement of digital therapeutics?
Molar: I think it’s really clear that the US healthcare system isn’t designed to encourage innovation. The difficulty of integrating an entirely new product category into payer and provider systems, or the required training for pharmacists and the like. Our system is designed to say no, right? If you want to apply for Medicare coverage, you have to find the money somewhere else and take it from someone else. Whatever our bill ends up costing – and we’re in the middle of a CBO [Congressional Budget Office] Process now – if it’s, I don’t know, $10 billion over 10 years, who’s going to lose that money? They don’t want to take it away from the doctors. They don’t want to take it away from other innovations. And so Medicare is at a standstill in terms of coding and things like that. So I know AppliedVR had code, but they were under DME [durable medical equipment]. It’s a little bit different. And then Pear received the code A9291for which Medicare has specifically stated that we will not reimburse them.
MHN: What do you see in digital therapy this year? Where do you see progress?
Molar: Well, I hope that many Medicaid issues continue to move forward because of the momentum we’ve seen from Pear. It’s too early to tell what impact their bankruptcy will have on it. But they had three or four states now, and we’re in talks with other state Medicaid directors. Now that they see a way, they want to follow that way. So I really, really hope Pear’s products stay in the market because you never know what’s going to happen. But at this point, they’re profitable — profitable means their products are generating revenue. And you would love for someone to keep it up. And then we’d like to see these other products behind it. But I would like the commercial spaces to develop further. I would like Medicare to at least acknowledge what types of codes they will issue. But I really believe that the government programs will drive commercial plans as well.
Besides, we do ours opening summit At the beginning of June. We linked it to our hill day events or our fly in days. We held three events last year and the year before. So basically we did it twice a year. And we found that we put together panels of all these government experts, and it was basically half a conference and half talks with Congress. And we were like, you know what, we have such a great dynamic down here. How can we make something bigger out of this? That is why we are holding the conference this year.