Can you really replace a drug with an app? According to Andreessen Horowitz, a leading American venture capitalist the answer is yes, if we start thinking of the so-called “digital therapies” as the “third wave of medicine”.

But what are digital therapies?

Digital Therapies are clinically validated technological solutions designed to complement, and one day possibly replace, traditional therapies, ensuring greater patient involvement while improving the overall quality of healthcare over the long term.

The Digital Therapeutics Alliance, a working group formed by some of the top digital health companies in the field such as Pear, Akili, Propeller Health, WellDoc, Omada Health and Voluntis is working towards creating a common understanding and acceptance of “digital therapy” guidelines with measurable and repeatable outcomes. The DTA’s mission is to promote and foster the understanding, adoption and integration of digital therapeutic solutions.

Their groundbreaking innovative solutions from the founding members include videogames designed for the treatment of children with ADHD from Akili, online programs like Omada Health to help lose weight and thus reduce the risk from metabolic diseases, and mobile platforms and sensors to support the management of respiratory diseases as those designed by Propeller Health. These are just some of the most popular digital therapies available in the US, and in most cases they are aimed at patients suffering from chronic diseases or neurological disorders, often not well addressed by the traditional healthcare industry. In addition, these new therapies can offer a very cost-effective option for treatment and at the same time help reduce the workload for doctors by providing individualized support to patients.

If these are the obvious benefits, why haven’t digital therapies yet been fully integrated into the healthcare offer? Why are they not prescribed by doctors and why are pharmaceutical companies not investing in developing new digital therapies? According to McKinsey & Company, there are two obstacles to a real rise of digital therapies: their differentiation in the digital health market and the inefficient distribution of incentives.

Digital Therapies vs digital health apps

The number of health apps has increased greatly, just think that in 2017 over 318,000 health apps and 340 wearable devices were released, but but too many of them have demonstrated any appreciable therapeutic value. To be considered digital therapies, these solutions should prove to be clinically valid through evidence-based studies and satisfy the standards of safety, efficacy and value just like other drugs and OTC supplements. These are common benchmarks in the healthcare industry that digital solutions need to strive to achieve. The role of regulators in starting to assess the efficacy of digital solutions is therefore crucial, as their validation will enable consumers to understand what the benefits of a digital therapy really are. It is no surprise that the FDA is now thinking about creating a digital health unit to help oversee this new industry and the health solutions it is bringing to market.

Inefficient distribution of incentives

For digital therapies to be as widespread as current drugs, changes in the entire health delivery chain are indispensable. The first change needs to be in the approach that doctors take to collecting and sharing data on patients’ health status. For example, many digital therapy apps and software platforms are built around monitoring patient symptoms. Making this volume of data available to doctors to conside is often considered by physicians to be more of a nuisance than a help. Therefore, doctors must be tought how to see this data as a very useful information tool when used with analytical software that can help them interpret its meaning.

From the patients’ point of view, it is important that the adoption of these new therapies also be reimbursable, but this depends essentially on the type of result that can be achieved by adopting these new therapies. In general, the insurtech sector tends to reimburse those therapies that provide better management of health conditions and/or contribute to better control of the underlying pathology.

Finally, to have a real adoption and widespread distribution of digital therapies requires significant investment from pharmaceutical companies, which traditionally have approached innovation in very different ways than that of the newcomers from outside the industry. Most of the time, innovators and distruptors are new startups using the latest technologies unencumbered by slow internal business processes or internal regulatory constraints. But some things are starting to change in the pharma sector and one significant recent example is that of Roche acquiring mySugr, a support app and platform for diabetic patients that Roche plans to offer to all diabetic patients regardless of whether they use Roche drugs. In the near future, more pharmaceutical companies may launch their own digital therapy units and services, but in the short term, the easiest way to catch up to the fast moving field of healthcare innovation is to expand their own internal innovation “capabilities”. This can be done by increasing awareness across all internal areas of their business and look to solving challenges in the business through the eye of an innovation, and by establishing partnerships with promising startups that can help solve some of those challenges, and to help these new businesses grow.