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Kaia’s back pain app
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Konstantin Mehl, Founder and CEO at Kaia Health

Helping patients more easily manage their health conditions, the rise of digital therapeutics has been seen across the healthcare sector, with an increase in innovative apps and digital solutions to provide at-home management of a particular condition.

Konstantin Mehl, Founder and CEO at Kaia Health, has discussed why he believes 2019 will be the “breakthrough” year for digital therapeutics and what this means for healthcare professionals, discussing patient-focused solutions, clinical evidence and European device clearance.

A year ago, we thought about what would happen in the digital therapeutics industry in 2018. In hindsight, we all underestimated how fast patients have been adopting digital therapies and how open the big payers and employers are to offer digital solutions to patient needs.

We also underestimated how fast large companies from tech, but also healthcare backgrounds, are entering the digital healthcare space.

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At the end of 2018, the digital therapeutics industry seemed to be quite mature when it came to set standards, user adoption and some market leaders focusing on different diseases.

So, when thinking about 2019, we have a strong feeling that it will be the breakthrough year for digital therapeutics.

Here are my arguments for this feeling:

1. Vertical integrations that combine digital therapeutics with “conventional” products in the medical sector like devices, pharmaceuticals or digital solutions by major tech manufacturers have been a huge topic and based on some examples, we predict a strong increase in these partnerships in 2019.

a) Traditional hardware makers like Apple with its cardiology diagnostic and fall detection program included in the Apple watch 4 are pushing deep in the healthcare sector, as illustrated by Apple’s decision to seek Food and Drug Administration (FDA) clearance. This is a significant step as it shows that Apple is stepping away from wellness-based use cases towards the treatment of diseases and is actively seeking regulatory approval for this step – an outlook to more activity of tech giants in the regulated healthcare space.

b) Integration of digital therapeutics with telemedical consultation providers. It is a commonplace statement that telemedical consultations will gain importance in the future and that is illustrated by globally increasing numbers of consultations as well as large funding rounds in 2018. As patient journeys are becoming ever more digital, we predict strong partnerships between digital therapeutics companies and telemedical consultation services.

c) Digital therapeutics aiding for medication delivery. Combining smart technology with pharmaceuticals is a striking example of where new technologies can fit in with current stakeholders to improve the value proposition and potentially improve clinical outcomes by increasing adherence. An interesting partnership was formed for example by Aptar and Propeller health (later in the year to be acquired by ResMed) in mid-2018. As adherence to medication is a major problem in respiratory diseases, it will be interesting when the potential to monitor inhalator use will be deeply integrated into combined digital therapeutic and pharma programs.

d) Digital therapeutics and patient-facing applications integrating with medical devices. Abbot’s FreeStyle Libre Link is an interesting example of a smartphone application coupled with a medical device. The software allows patients with diabetes to monitor their blood glucose levels using a smartphone app and stores the data in the cloud, making data actionable and available to doctors and patients alike. The app received FDA clearance in 2018 and offers clear benefits in terms of connectivity – a promising illustration of the potential of patient-centred applications and medical devices to be deeply integrated.

2. More transparent but also more patient-centred standards for digital therapeutics have emerged.

Digital therapeutics companies seeking reimbursement have adopted the common benchmark to publish randomised controlled studies (usually comparing their app against a control group receiving standard of care treatments) and getting FDA and/or European device clearance while also having a certified quality management system in place.

FDA has seen several companies in the digital therapeutic space, like Pear with its opioid addiction management program reset or Natural Cycles with its contraception app, enter the De Novo pathway using their previous clinical data and receive clearance afterwards.

Here is my complete checklist I like to use when looking at a digital therapy company:

Regulatory: FDA clearance based on 510k or DeNovo pathway or for European companies, medical device classification with CE branding while at the same time having a certified Quality Management System in place.

Data security: Companies need to be HIPAA compliant or in Europe compliant with GDPR and thus maintain a reasonable standard for security of processed and stored healthcare data.

Clinical evidence: Companies should follow a research programme with increasing quality of evidence in the process as suitable for their claims. This might include observational studies showing benefits of the product with real-world-evidence, or randomised and controlled trials (or ideally a combination of both), or a research programme that addresses data from both domains.

Medical foundation: Does a company invent a new therapy or digitise an existing gold-standard therapy? I find it much easier if digital therapy companies digitise an existing gold-standard therapy as the buy-in of medical professionals and the research done is more solid.

App quality: Do they have a cutting-edge consumer app that makes patients feel like treating a disease can be a pleasant experience or a boring looking app that makes patients feel like treating a disease is something painful? Producing medical apps in a customer-centric way and redeveloping them to meet patient’s needs seems to lead to increased engagement in the app and thus even to potentially improved clinical outcomes as we have published this year. We expect patient centricity as a hallmark of long-term success as dynamic outcome-based pricing and transparency with user data will convince payers to cover only those apps that really are adopted. Patients, on the other hand, will expect medical apps to perform and look like consumer apps in other sectors.

Artificial intelligence: Does a company use artificial intelligence (AI) in a way that the quality of care is increased? Are they really using AI or just filtering? If they use AI, how big and medically relevant is their training data set?

Scalability: Does a product have to be prescribed or can users access it directly (OTC digital therapies) or is both possible? If it cannot be prescribed, it is very important to look at the medical evidence. If it is prescribed, typically the clinical evidence has to be quite good.

3. Lawmakers around the world have introduced more reimbursement codes for digital interventions.

Several countries have allowed additional reimbursement codes for online services and thus made the integration of digital therapeutics more attractive for physicians or to provide the base for reimbursement of virtual clinics. This allows digital therapies to further enter the core of the medical system and to integrate more deeply with payers. Germany, Japan, US, Canada have all recently introduced reimbursement codes for the integration of telemedical consultations or digital therapeutics in conventional medical practice. This process should be at its starting point as more data is being provided to physicians by digital therapeutics and monitoring this data as well as translating it into actionable advice will prove a significant workload for healthcare professionals that needs to be reimbursed to make the integration of digital in current healthcare systems work.

4. Distribution of the product is becoming more flexible.

There has been a strong consensus among digital therapeutic companies to aspire to become a prescription therapeutic, thus relying on conventional distribution channels (e.g. physicians) to distribute the product with a prescription when it is reimbursed. While this can, for now, be considered as the standard of distribution, more disruptive models are also emerging whenever the indication and safety profile of the application makes this possible. Partnerships of Kaia with several German insurers make direct access to our therapies by patients themselves possible, increasingly as a digital-only access without involving phone hotlines. This may even be less disruptive than it seems. In some countries, like in Germany, insurers have been offering reimbursement for non-pharmacologic treatments like mind-body therapies as secondary prophylaxis (e.g. after the onset of a condition to prevent worsening or recurrence of the condition) without involving physicians for decades. Why not go digital in this process? We expect that digital distribution models while still maintaining reimbursement possibilities will greatly increase access to digital therapies.

5. More sophisticated outcome-based pricing based on claims and patient-reported outcomes should be expected and will more clearly show benefits to payers.

Outcome-based pricing has always been a core idea associated with digital therapeutics as there is a strong promise not only to have a positive impact on several clinical outcomes but also to make data to monitor those outcomes more easily available. Patient-reported outcomes (PROs) have repeatedly been shown to be predictors of the course of disease, quality of life and even a patient’s prognosis in medical fields as widespread as pain medicine or respiratory care. Furthermore, digital biomarkers that can digitally track disease activity are on the rise with several high-class publications on their validity published in 2018. We expect payers to respond to these trends by creating sophisticated models for outcome-based pricing based on several pillars. Manufacturers of digital therapeutics should be prepared by being able to offer a rich, clinically meaningful data-set reflecting on the efficacy of their product to payers based on data from real-world collectives.

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