Digital therapeutics — identifying the hurdles and establishing the evidence for transformational clinical and economic impact

By Jonathan MacQuitty & Galym Imanbayev

Digital therapeutics are a new category of medicine, delivering clinically validated, FDA-cleared medical interventions. In the past half decade, investment in digital therapeutics has grown at a strong pace, with yearly investment growth rates of 40%¹ and over $1B invested since 2018². Despite this investment, we are still in the early innings.

With healthcare’s long march towards efficiency accelerated by Covid, digital therapeutics, like telehealth, hold immense potential for scalable, high quality and cost-effective care. We’ve seen this potential start to realize in Freespira, a Lightspeed portfolio company, in the treatment of panic attack disorder and PTSD which have especially heightened during the pandemic³. We’d like to highlight the unique hurdles facing digital therapeutics and present a case study of Freespira on the foundational step of all digital therapeutic journeys.

Identifying the hurdles

In the increasingly intertwined healthcare ecosystem, it is critical to delineate the key hurdles for broader adoption of digital therapeutics. Providers do hold power in the prescription of digital therapeutics, but are often also the founders pioneering the field, and as such, can be as much allies as skeptics to adoption. Policy can slow progress, but in the case of digital therapeutics, regulatory bodies have been a net positive, starting forward-thinking initiatives for future CMS coverage. However, patients are often the victims here and have consistently shown preference for the non-invasive, non-pharmaceutical and remote attributes⁴ of digital therapeutic options⁵. Pharma has leaned in, viewing digital therapeutics as an opportunity to advance strategic objectives in program-specific diagnoses and companion therapies.⁶

The primary bottleneck to, but also greatest opportunity for, increased adoption, are payers. While there are commendable exceptions, many payers, whether they be plans or employers, fail to appropriately assess and lean into well-validated digital therapeutics opportunities. Instead, they fall back to the safety and comfort of wellness solutions that may achieve limited engagement and improve employee satisfaction metrics based on availability, but which ultimately were neither built for nor tested rigorously for clinical and economic impact. We understand that with over 350,000 digital health solutions competing for limited mindshare⁷, it’s not easy for payers. Issues often arise from either inappropriate and outdated criteria or poor evaluations that miss or underweight key evidence.

Freespira — a case study in evidence-building

About 27 million people in the US are estimated to suffer a panic attack each year, with an additional 8 million suffering from PTSD. These conditions severely impact patients’ lives⁸ and lead to substantially higher healthcare costs⁹. With high rates of relapse on existing treatments and rising COVID-related panic attacks and PSTD, patients are looking for better treatment options.

Freespira developed the only FDA-cleared digital therapeutic shown to significantly reduce or eliminate symptoms of panic disorder (panic attacks), and PTSD. The Freespira platform incorporates a proprietary sensor, physiological feedback display and coaching to train users over a 28-day program to normalize the respiratory irregularities underlying a key physiological driver of symptoms (carbon dioxide hypersensitivity).

Real world data has been collected from more than 4,000 treated patients, including five clinical studies along the following evidence building path:

1. Establishing the foundational science

A randomized study with 37 participants was designed not only for outcomes but also to help establish the foundational mechanism of action of the treatment protocol. Since selecting an active control group is challenging in the setting of digital therapeutics, in this study, a wait-list control group with no treatment was used as controls. Among those treated, 68% were panic attack free 12 months post-treatment; 93% with clinically significant reduction in panic symptoms 12 months post-treatment, all with 91% treatment adherence.¹⁰

2. Building real world evidence

Freespira next benchmarked its results outside of a controlled research environment by testing in multiple practicing clinics across demographically diverse populations. In a study that offered 69 patients treatment across four non-academic settings, 71% and 79% panic attack free immediately and at 12 months post-treatment, respectively; 82% showed clinically significant reduction in panic symptoms 12 months post-treatment; and 70% no longer met criteria for panic disorder diagnosis one year post-treatment.¹¹

3. Demonstrating healthcare economic benefits to payers

Freespira partnered on a study with Highmark Health, a top ten health plan, and the Allegheny Health Network, a large multi-specialty healthcare system. In a prospective study of 50 patients, Freespira demonstrated both clinical (86% and 73% panic attack free immediately and at 12 months post-treatment, respectively; 91% clinically significant reduction in panic symptoms 12 months post-treatment; and 84% treatment adherence), and economic benefit (35% reduction in any-reason medical costs, 65% reduction in emergency room costs and 68% reduction in pharmacy costs at 12 months post-treatment).¹² In a separate study at the Palo Alto Veterans Affairs Health Care System, 55 patients were treated for PTSD symptoms, with 88% experiencing clinically significant drop in severity, with 48% and 50% experiencing remission from PTSD two months and six months post-treatment, respectively.¹³ Freespira demonstrated value directly on the payers’ own members, prospectively and within their trusted practice environments, with continually more outcomes data to come.

We at Lightspeed believe Freespira’s example helps highlight the efforts undertaken to establish scientific, clinical and economic impact. We urge payers to re-evaluate their existing assessment and distribution strategies for digital therapeutics and to reach out to organizations like the Digital Therapeutics Alliance to better understand developing industry standards and the maturity of its community of companies. By appropriately building and assessing evidence, digital therapeutic pioneers and payers can unlock the immense impact both can have on patient lives.

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“Investigation of a Capnometry Guided Respiratory Intervention in the ….” 1 Sep. 2021, https://link.springer.com/article/10.1007/s10484-021-09521-3.