What Does the former CPO of Pear Think About the PDT Business Model?

By Jeremy Gilbert

Protected: Prescription Digital Therapeutics – Is there a reason to believe?

On a weekly basis people call me and ask me what I think about PDTs, otherwise known as “prescription digital therapeutics”. I used to be the CTO/CPO of Pear Therapeutics, which arguably pioneered the entire PDT business model. While at Pear, I recruited a very large team and oversaw a massive pipeline of more than a half-dozen products in this space, taking them from incubation, to FDA and into commercial. Since leaving Pear, I’ve been advising investors, boards, management teams and product development teams. So the question around the future of the PDT space comes up quite a bit.

PDTs are a form of digital therapeutic


To start, let me lay out the territory and set some context. “PDT” is just one business model out of many for the emerging class of digital therapeutics, sometimes styled as “DTx”. DTx is used to describe products that improve patient health outcomes through digital interventions — imagine a mobile application that treats a disease or medical condition as you use it. The word “treat” here is critical – DTx isn’t centered on making appointments or receiving lab results or telemedicine. In DTx, the software is the therapy itself, meaning that use of the product itself is the cause for improved outcomes. This distinction is what separates a true digital therapeutic from the broader field of digital medicine, a term that encompasses all use of digital technology in healthcare.


Digital therapeutics are a pretty hot topic. There are some high flying companies like Livongo, Pear, Canary Health®, Akili, Omada, Noom, Headspace, and Calm which offer products containing a digital therapeutic component. The secret sauce for the most effective of these therapies is the inclusion of software designed to help a patient think, act, behave or perceive differently. At the shallow end of this is having a virtual coach or a training buddy. In the more advanced cases, these apps contain entire psychological treatment protocols that are not that different from what a human therapist might deliver.

A question of business model


PDT is just one business model out of many for delivering digital therapies. In fact, by my tally, there are about 7 different business models that can conceivably operate in this space. That long list of companies are all working in one way or another to tap into the potential for digital therapeutics to improve patients’ lives. So why so many different business models? At the end of the day, someone has to pay for the R&D costs to build a digital therapeutic and deliver that therapeutic to consumers. Who pays for this? The consumer? Health insurance? The doctor? The employer? The government?


The PDT business model for digital therapies


PDT represents a very interesting (and sometimes controversial) business model in digital medicine. Current PDT companies, such as Pear, Akili and Mahana, are placing a bet on a version of digital therapeutics which is effectively “software-as-a-prescribed-drug”. In this model the app is actually prescribed by a doctor and used by a patient on their own digital device. Unlike many of the other business models available, PDTs are FDA reviewed, just like molecular drugs. The FDA has a process for regulating these type of products and applies similar standards on clinical data, quality, and safety to these apps as it does to traditional pills. Pear was the first ever company to win FDA clearance for a software monotherapy.


The PDT business model is complicated due to the need to create and validate a therapy completely before it is sold. Development is usually a multi-year process. The digital therapeutic design starts with an underlying mechanism of action that typically has a strong mechanistic & scientific foundation. Often this mechanism is CBT, ACT, or DCT or some combination, usually arranged into a curriculum and with a user-friendly delivery based on a detailed and empathetic understanding of the patient. Combining the psychologic with user design is a complex art, and takes a long time to get right. Once the product is ready, the company runs clinical trials to prove the therapy works. The data from the trial will be used to justify claims about efficacy and safety. The data from the trial undergoes FDA review, and if the agency agrees that the data supports the claims, it will issue premarket clearance. The FDA is one of the most trusted medical authorities in the world, so getting FDA clearance is a very trusted and high bar.


PDTs work just like apps on the phone, except that they are usually prescription-only. A doctor reviews the patient’s medical situation and picks the therapy based on the evidence and needs of the patient. They actually write a prescription, and a digital pharmacy “fills” the prescription by enabling the app on the patient’s phone. The patient downloads the app containing the product, punches in the prescription code and starts to use the therapy. The payment for the product is billed to the insurance company.


PDTs are already out in the wild. Pear Therapeutics, my former employer, actually has three on the market already. And Akili Interactive is also now entering a commercial stage. The frontier has been opened.


Why PDTs are so compelling


The PDT model for digital therapeutics offers a number of clear advantages (in my personal view):

  • FDA clearance provides a high bar for quality, safety and accountability. Patients, providers and doctors can trust the claims made about the product’s efficacy because they’re backed by rigorous trials and strict promotional requirements. It would be impossible for the PDT marketplace to become overcrowded with shoddy knock-off products like many other markets. (I personally appreciate knowing the medicines I use are tightly regulated – it’s the ultimate consumer protection against fly-by-night operators. I shudder to think what would happen if Amazon sellers were allowed to sell prescription medications.)
  • The treating physician or nurse is in charge of the treatment, not the insurance company or the app store. Most patients will trust the advice of their doctor more than other sources of information. They are much more likely to adhere to treatment, and it means that the digital product becomes a trusted extension of a care system they likely already trust.
  • Deep provider involvement means that providers will adopt digital more readily. Most providers I speak with express a lot of reservations about the massive proliferations of health apps, and can hesitate to make unqualified recommendations to their patients. They are not likely to monitor patients using these “off the shelf” products, and unlikely to see value in making their practices more digital ready. A trusted, evidenced-based FDA-cleared therapy will go a long way to changing that. The patient’s existing medical insurance (maybe even their prescription drug plan) can cover these apps, meaning that patients are stuck holding the bill.


For all of these reasons, I’m personally convinced that the PDT model is a crucial part of the future of digital medicine. As a patient, I’m sick of showing my doctor apps on the app store that might help me and seeing them shrug or ignore them. I want to live in a world where digital medicine is integrated with existing medical practices, not something consumers pick and choose on their own based on reading app store reviews or marketing tie-ins. Furthermore, I worry there are a lot of incentives for app developers to make false or misleading claims about the effectiveness of their products, and a lot of opportunity for market confusion if they are allowed to do this.



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