Health is a Catalyst For Growth, So Innovation Should be its Driver

Why does healthcare need digital therapeutics?

I guess I would rephrase the question slightly: Why can digital therapeutics contribute to better health and well-being? If we start from the objective of health and well-being for all people, it seems quite obvious that digital solutions can have a positive impact on health and well-being. After all, people spend an enormous amount of time with their digital devices, be it smartphones or wearables. Given this fact, wouldn’t it make sense to “use” these digital devices to make a positive contribution to health and well-being?

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Investments in digital therapeutics companies are growing. Pharma companies are cooperating with DTx startups. What requirements must be met to accelerate DTx adoption?

There are some general factors that determine eHealth adoption across countries, which also have an impact on digital therapeutics: Does the country in question have a digital health strategy and does that strategy include digital therapeutics? How about a regulatory pathway for digital therapeutics? A pathway for (nationwide) reimbursement? Is there a digital health infrastructure in place that enables the adoption of digital therapeutics (this includes the classical enablers like electronic patient records and e-prescriptions)?

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Finally, how does digital health literacy look to healthcare professionals and patients? How easy or cumbersome is it for healthcare professionals to prescribe digital therapeutics compared with prescribing medication and medical devices?

There are, in addition, some direct-to-consumer categories of digital therapeutics. For these, the usual mechanics of “app stores” can determine the success of their adoptions. For example, when analyzing downloads of health-related apps, it’s often found that there are usually three to five apps in a category that have the majority of downloads. This often correlates with the rating of the app.

Can we expect a new form of the digital-pharmaceutical industry to take shape soon, or will we see collaborative models (but separated by a clear boundary between “drug” and “application”)?

In my opinion, just how prevention, classical medication, medical devices, and digital therapeutics will come together to ensure better care or “disease management” for patients is yet to be determined.

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Let’s take diabetes as an example: a western European health system typically has more than 100 medical interventions at its disposal to deal with diabetes, ranging from prevention to dealing with the complications as the disease progresses. Thus, the problem is often not the lack of interventions, but rather the coordination of the care, education, coaching, and support for the patient in a way that allows the most important requirement for many diseases: the enabling of a sustainable change in behavior, often in areas such as fitness, nutrition, sleep, and stress management. If this is the aim, then I am hopeful that digital therapeutics can play an important part in driving this much-needed behavior change, leading to improved patient outcomes.

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Early signs seem to show that pharmaceutical companies are increasingly open to collaborative models with digital health companies, resulting in combined digital-pharmaceutical interventions.

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DTx has introduced a new healthcare model in which patients take more responsibility for their health and engage in therapy and prevention. It might be easier to change the regulatory ecosystem than to drive a cultural shift.

I am convinced of the benefits when people take more responsibility for their health and well-being. This requires work to strengthen health literacy and health education of the whole population. As such, I see this cultural shift much broader than “just” the scope of digital therapeutics, although it applies to digital therapeutics as well, of course.

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In leading a health and well-being program at McKinsey Germany, I spend a lot of time on topics that help people be at their best, both from a physical health and a mental well-being perspective. Personally, I have explored topics like mindfulness, nutrition, sleep, and fitness for almost ten years now and it has been a complete game-changer for me. As part of this exploration, I have found a set of micro-habits that I use pretty much every day. Some of them are even supported by digital therapeutics (e.g., mindfulness) or wearables, while others are non-digital, like my dietary habits.

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Coming back to the second part of the question: regulatory, health technology assessment, and reimbursement pathways for digital health have started to emerge (e.g., the DiGA pathway in Germany). With that said, there are quite a few “gaps” where such regulation is not in place, both from a national perspective and/or for certain digital health categories. For example, remote patient monitoring has been shown to offer benefits for many diseases, but it is part of standard care only in a few countries so far.

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Apart from compliance with the local/national regulatory landscape, health apps must also inspire trust in individuals, and trust is often culturally determined. How can DTx companies that are scaling their solutions globally overcome this challenge?

Trust in digital therapeutics is driven by the benefits they deliver. Therefore, having evidence for these benefits will be crucial. Looking at digital health overall, there is still a lot of work to be done on evidence generation. For example, when we conducted a structured literature search for publications about medical interventions for the past 20 years in Germany, we found that only about 1% of these publications were about digital health. And when we looked at the publications themselves, only a fraction of them had analyzed the benefits of digital health.

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On the positive side: of the publications that were looking into the benefits of digital health, 80% of them showed a positive impact from digital health, mainly in terms of patient outcomes and also in terms of time-savings and cost-savings (e.g., time-savings for the healthcare professional or cost-savings for the health system). Evidence generation and education will be key!

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One of the conclusions of the recent “The Promise of Digital Therapeutics” conference hosted by McKinsey and Digital Therapeutics Alliance is that “it is not hard to imagine the emergence of a very different healthcare system powered by digital technologies within ten years.” What should the model be like to address the most critical challenges in healthcare?

I am pretty excited by a piece of research done in the past year called “Prioritizing health: A prescription for prosperity” and an economic lens used to look at health at the country level. In short, the results were that it would make sense to look at healthcare as a positive, strategic investment case as a country, instead of looking at healthcare as a budget that needs to be controlled. What I found most promising was that for every US dollar that a country invests strategically in health, the return is between $2 and $4, depending on the type of country.

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If countries invested strategically in health, then the economic return would be an additional $12 trillion by the year 2040. In other words, investing strategically in health could drive about 0.4 percentage points of economic growth per year.

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For this to come true, we would need a different model for health and healthcare, and focus on four things:

1. Making health a social and economic priority:  instead of thinking of health as a cost to manage, focusing on health as an investment that can deliver significant social and financial returns.
2. Keeping health on everyone’s agenda. The pandemic has forced health on everyone’s agenda – we need to keep it there. That is because, as we can see, more than 70 percent of the benefits we identified cannot simply be left to healthcare providers or healthcare systems.
3. Transforming healthcare systems towards preventive health and building out access to quality healthcare where it is lacking.
4. Doubling down on innovation in therapeutics and beyond.

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What are your three “unlocks” that would enable the growth of the DTx market in the next five years?

First, we would need to see more countries establishing regulatory, health technology assessment, and reimbursement pathways for digital therapeutics. Ideally, there would be harmonized assessment methodologies across Europe, but this might be wishful thinking.

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Second, we would need successful digital therapeutics companies (e.g., companies that apply cognitive behavioral therapy approaches and can show clinical evidence for patient outcomes) to expand their strategies across different disease areas, especially chronic diseases.

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Finally, digital therapeutics would need to become part of broader “digital health ecosystems,” i.e., broad offerings that are designed to support both health and well-being.

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