Increasingly sophisticated and often clinically-validated digital health tools and therapeutics (DTx) are coming to market. However, in the fragmented U.S. market, a big potential barrier remains: the question of who will pay for them. Study data suggest payers are warming to this emerging field of technologies.
Decision Resources Group surveyed 157 U.S. P&T committee members and found that nearly half agree that “Digital therapeutics are the future of healthcare.” Among these healthcare executives, who make formulary decisions within hospitals, IDNs, MCOs and PBMs, 25% said their organization currently provides coverage for DTx, and another 45% expressed interest in providing coverage.
Digital therapeutics coverage was reported at higher levels among P&T committee members in IDNs that offer their own plans, along with MCOs and PBMs offering plans through:
Employers 
Health Exchanges Among all U.S. P&T committee members in IDN+s, MCOs, and PBMs
Those offering Medicare PDP demonstrated the highest level of interest in covering DTx (56%).
Among all U.S. P&T committee members
Source: Multichannel Payer Marketing 2020
Among all U.S. P&T committee members in IDN+s, MCOs, and PBMs
Source: Multichannel Payer Marketing 2020
Growing receptiveness among formulary decision-makers could boost interest in DTx among physicians. In the U.S., 44% of physicians express interest in prescribing medical apps for patients. Among physicians who are active P&T committee members, that interest climbs to 52%.
Some manufacturers of digital health tools have explored direct-to-consumer commercial models, but DRG studies show little consumer appetite for this – of the 22% of U.S. adults who are interested in using DTx to manage or treat health conditions, 1 in 5 say they would pay for it just as they would any other medication, while another 22% of those interested in DTx expect their insurance to cover digital treatments just as it would a traditional prescription medication.
Towards the end of 2019, DRG analysts showed major shifts in the reimbursement landscape, as two major PBMs comprising a combined 53% market share in the U.S. adapted to facilitate DTx in health plans:
CVS Caremark unveiled a platform enabling payers to formalize and streamline the process for DTx reimbursement and distribution, allowing health plan clients to access negotiated pricing, verify member eligibility, and navigate the payments process.
Express Scripts announced that DTx solutions would be added to its digital health "formulary." The categorization of DTx into coverage tiers, much like traditional medicines, aims to protect health plans from higher costs while providing better access to these novel solutions.
In addition, Blue Cross Blue Shield, Medicaid, Highmark Health and Competitive Health added digital solutions to their benefits lists. Notably, Medicaid and Highmark have expanded coverage for tools beyond traditional therapeutic area indications (e.g., mental health or diabetes) to include novel digital tools for precision prenatal/postpartum care and cardiac rehab respectively. Findings from DRG’s Multichannel Payer Marketing study revealed that P&T committee members who have voted for, or advised on, new prescription medications or indications related to cardiovascular disorders are more interested in providing coverage for DTx compared to those voting/advising on other therapeutic areas.
As DTx gains traction among P&T committee members, physicians, and patients, more opportunities emerge for pharma to collaborate with big tech and health plans on digital-centric solutions. Completing the virtuous circle, these strategic partnerships can also encourage favorable formulary placement as payers begin to recognize the clinical and cost efficacy associated with digital health tools.
