Discussion on the Challenge of the DTx Market — Pear Therapeutics Case
In the United States, it is not recommended for such businesses to rely solely on insurance reimbursement. It is suggested that they focus on the institutions such as IDN(Integrated Delivery Network).
In terms of organizational structure, it is not recommended to solely rely on DTx products. It is best to attach or partner with telehealth or RPM-type companies for optimal efficiency.
The news of Pear Therapeutics’ bankruptcy is the setback of this industry.
Discussion
The issue of insurance reimbursement is the main reason for this company’s lack of revenue. In fact, in the United States, any service related to insurance reimbursement often faces situations where reimbursement is denied. Some companies use agencies to handle related matters, but the effect is limited.
Although this type of product can improve the quality of medical care, for insurance reimbursement units, it may be considered as an additional item and an additional expenditure. From the perspective of insurance reimbursement, the efficiency brought by this type of product is not felt, and it may even squeeze out limited resources. Only IDNs feel the value of this type of product. Please refer to the following article.
The article discusses the concept of value-based contracting, which is most suitable for IDS (Integrated Delivery Service) or IDN (Integrated Delivery Network) organizations. These organizations combine insurance and medical services under the same system and are focused on Fee for Performance, which means they prioritize achieving the best medical outcomes while avoiding unnecessary expenses. This is different from Fee for Service, which is more common in other healthcare organizations and can lead to unnecessary procedures to increase revenue.
DTx products, which can assist in achieving proven medical outcomes and save on unnecessary drug costs, are suitable for IDS/IDN organizations. While Pear Therapeutics’ strategy involved partnering with pharmaceutical companies, the practical operations of any organization using DTx products need to be carefully planned, regardless of product type.
The author suggests that a company with a joint venture with a pharmaceutical company may be more suitable for DTx products, and the best approach is to enter through companies such as Telehealth and Remote Monitoring. For instance, Remote Monitoring companies can offer both services and insurance coverage, as well as opportunities for CRO (Contract Research Organization) projects, providing stable revenue streams for the company. Utilizing remote monitoring systems can also enhance the user interface and service experience.
Summary
Therefore, for the US market,
- The target audience of these businesses should prioritize IDN-like institutions, followed by other insurances, and also seek mechanisms for user-paid services.
- In terms of organization, in the current environment, purely doing DTx products would require considerable financial support to wait for profitability due to long development, evidence gathering, and clinical trial periods. Thus, attaching to companies such as Telehealth and Remote monitoring is the most suitable strategy since they have appropriate services for IDN-like institutions, and their platforms, interfaces, and architectures can be used, as well as the benefits of existing revenue.
Another business model is to seek hardware integration and revenue through hardware sales, although this is a rare opportunity.
The author believes that technologies that help humanity should be promoted to benefit society and looks forward to Pear Therapeutics’ revival.
