U.S. Digital Therapeutics Market - Industry Outlook and Forecast 2022-2027

The following factors are likely to contribute to the growth of the U.S. digital therapeutics market:

• Rise in Chronic Diseases and Need for Controlling Healthcare Costs
• Increase in Adoption of Healthcare Applications & Smart Wearables
• Rising Importance of A.I. in Digital Therapeutics
• Growing demand for Virtual Reality in DTx

MARKET OVERVIEW

Healthcare and technology have merged and created a new category of digital health known as digital therapeutics. It is a subset of digital health and a form of digital medicine that can maximize patient care and healthcare outcomes through independent use or in conjunction with pharmaceuticals. Examples of digital therapeutics include- wearable devices, digital sensors, and artificial intelligence-powered devices.

Digital therapeutics plays a significant role in the treatment and disease management of various chronic and mental health conditions. It presents potential solutions for chronic disease management, ranging from congestive heart failure, type 2 diabetes, Alzheimer's disease, and cancer. Common and expensive chronic conditions include diabetes, obesity, hypertension, heart disease, Alzheimer's disease, depression, arthritis, anxiety, and sleep disorders.

Digital therapeutics (DTx) deliver evidence-based therapeutic interventions to patients driven by high-quality software programs to prevent, manage, or treat a medical disorder or disease. They are used independently or in concert with medications, devices, or other therapies to optimize patient care and health outcomes. DTx products incorporate advanced technology best practices relating to design, clinical validation, usability, and data security. Regulatory bodies must validate them to support product claims about risk, efficacy, and intended use. It empowers patients, healthcare providers, and payers with intelligent and accessible tools for addressing a wide range of conditions through high-quality, safe, and effective data-driven interventions.

Regulatory jurisdictions most frequently categorize digital therapeutics as a subset of software as a Medical Device (SaMD), a framework developed by the International Medical Device Regulators Forum (IMDRF). All DTx products qualify as SaMD, but not all SaMD products are approved as digital therapeutic. However, a dedicated FDA regulatory framework for SaMD products remains in flux. Some DTx must undergo randomized controlled trials under the premarket approval process to demonstrate safety and efficacy like traditional pharmaceuticals.

Entry of Several Start-ups and Rapid Surge in Funding & Investments for DTx Companies

The goal of digital therapeutics is to treat chronic conditions at scale, relieving some of the significant stressors on the medical system, such as physician shortages. With the rise in the prevalence of chronic diseases, there has been a growing awareness of digital therapeutics. Owing to the gradual adoption of DTx, several companies have emerged in digital therapeutics, working with extreme expertise and intent to satisfy therapeutic needs. Furthermore, digital therapeutics saw significant funding growth in 2021, with start-ups delivering medical interventions using evidence-based software for managing and treating a broad spectrum of diseases reporting surging investments. Investments in DTx were at a record in 2020 with $1,065 million with 64 deals. DTx start-ups are likely to increase at an incredible rate, and competition is fierce for the favor of providers, payors, and employers.

Digital therapeutic solutions have caught the eye of big pharmaceutical organizations that started to invest and form strategic alliances with digital therapeutic companies. The rising need to create value beyond drug discoveries, increasing pricing pressures, and the steady incline in chronic and complex diseases all around the globe have majorly contributed to these partnerships. For instance, in early 2021, Click Therapeutics and Otsuka Pharmaceuticals announced a new remote clinical trial conducted on Verily's Project Baseline platform. In addition to this, many DTx companies have attracted significant venture and private equity financing to compete with traditional biotech pharma & companies developing drugs for similar indications. For instance, Pear Therapeutics developing DTx for substance and opioid use disorder raised around $139 million.

Digital therapeutics and telehealth companies can contribute to solutions more effectively than ever by leveraging data available from wearables and other digital sources. These technologies can drive more profound insight, influencing patient behaviors to prevent and manage chronic conditions. With the pandemic significantly raising the adoption of telehealth and virtual care, telehealth companies are looking up to digital therapeutic platforms to enhance the value of their services. For example, Aetna's telehealth business unit, Healthagen, collaborated with Welldoc and LifeScan to assess the usage and potential health benefits of OneTouch Reveal Plus.

Artificial Intelligence & Virtual Reality assisted Digital Therapeutics.

Software applications are playing a significant role in providing digital therapeutic solutions. Mobile app-based digital therapeutic programs are being delivered at a low cost and massive scale, helping prevent disease progression and potentially saving insurers billions of dollars. Some digital therapeutics are entirely replacing medication with behavioral-based treatment, such as apps that use visualization exercises to help people with insomnia.

For the DTx industry specifically, where many new and innovative applications are launched frequently, A.I. plays a major role in driving personalization and engagement to help patients achieve better health. AI-enabled therapeutics offer diagnosis and personalized care by tailoring the treatment itself and anticipating needs and challenges based on the individual's behavior. Digital therapeutics coupled with artificial intelligence (A.I.) and machine learning (ML) allows more effective clinical observations and management at the population level for various health conditions. Furthermore, virtual reality in digital therapeutics is gaining significant attention. It focuses on mental health, such as studying the mental states based on brainwave patterns. It also targets the promotion of healthy lifestyles through innovative virtual coaching.

Impact of COVID-19 on Digital Therapeutics

After the COVID-19 pandemic broke out, the utilization of DTx applications in various fields boomed. DTx provides unique solutions to satisfy healthcare needs, reducing the danger of COVID-19 exposure during a hospital visit. The COVID-19 pandemic joined the other major drivers for the growth of DTx, such as enhanced focus on preventive healthcare, high incidence of chronic diseases, and affordable gadgets due to technological advancements. In the post COVID era, DTx became a dominant player in the digital health industry, and its scope is likely to rise.

Insights by application

In 2021, the treatment & disease management segment accounted for the largest share of more than 80%. This treatment & management market will increase its domination during the forecast period and is likely to grow at a faster growth. This segment includes managing and treating diseases like chronic care, mental health & neurological disorders by using DTx. Digital therapeutics are being increasingly adopted due to the growing concern of chronic diseases. It is intended to help patients change their behaviors, often through cognitive-behavioral therapy (CBT), to successfully implement care plans for their chronic health or mental health conditions.

• Treatment & Disease Management: Vendors targeting the treatment and management of various diseases are Teladoc, Canary Health, Noom, Cognoa, Pear Therapeutics, CureApp, 2Morrow, Sharecare, and others
• Preventive Care: This includes pre-diabetes, weight management, and others. Vendors involved in providing digital therapeutics in these areas are Omada Health, One drop, WellDoc, Lark Health, and others.

Insights by End-users

In 2021, healthcare providers accounted for the largest share of 29.11% in the digital therapeutics market in the U.S. Digital therapeutics empower patients, healthcare providers, and payers with intelligent and accessible tools for addressing a wide range of conditions through high quality, safe, and effective data-driven interventions. It promises many advantages for physicians, care providers, patients, payers, employers, and other stakeholders. As primary end-users, patients are at the core of the DTx landscape. Most therapies are delivered via smartphones or tablets to patients, increasing access to care compared to traditional treatments.

Segmentation by Application

• Treatment & Disease Management
• Chronic Care
• Mental Health & Neurological Disorders
• Others
• Preventive Care
• Pre-Diabetes
• Weight Management
• Others

Segmentation by End-User

• Healthcare Providers
• Patients/Individuals
• Payers
• Employers
• Others

COMPETITIVE SCENARIO

Vendors dominating the digital therapeutics market are developing strategies such as partnerships, collaborations, joint ventures, mergers, and acquisitions for their growth and establishment. Major companies made successful partnerships to advance the adoption of DTx. Noom and Eversana partnered up to cater to patients with chronic conditions and rare diseases and check patient adherence and engagement for long-drawn-out therapies. The consolidation in the digital therapeutics market continues with vendors indulging in strategic acquisitions and collaborations with pharmaceutical companies to enter the digital therapeutics space and extend their presence in the market. Some significant acquisitions also took place in the DTx market. These include Biofourmis acquiring Gaido Health, Virgin Pulse acquiring Blue Mesa, and Novartis acquiring the digital therapeutics firm, Amblyotech. Over the next five years, there will likely be an uptick in mergers and acquisitions and closures among DTx companies.

Key Vendors

• 2Morrow
• Akili Interactive Labs
• Cognoa
• Fitbit
• Kaia Health
• Lark Technologies
• Teladoc Health
• Omada Health
• Pear Therapeutics
• ResMed
• Voluntis
• WellDoc
• Dario Health
• Happify Health
• One Drop
• Virta Health

Other Prominent Vendors

• Ayogo
• BehaVR
• Calibrate Health
• Canary Health
• Cara Care
• CardioRenal
• Cerebral
• CogniFit
• CureApp
• Freespira
• Ginger
• Glooko
• Kelvi
• Mahana Therapeutics
• Mantra Health
• Meru Health
• Monument
• Neurotrack Technologies
• NightWare
• Noom
• Sharecare
• SWORD Health
• Talkspace
• Thirty Madison
• TRIPP
• Vida Health
• Vivante Health
• Workit Health

KEY QUESTIONS ANSWERED

1. HOW BIG IS THE U.S. DIGITAL THERAPEUTICS MARKET?
2. WHAT IS THE GROWTH RATE OF THE DIGITAL THERAPEUTICS MARKET IN THE UNITED STATES?
3. WHAT ARE THE KEY COMPANIES IN THE DIGITAL THERAPEUTICS MARKET IN U.S.?
4. WHAT ARE THE MAJOR DRIVERS IN THE US DIGITAL THERAPEUTICS MARKET?
5. WHAT ARE THE LATEST TRENDS & OPPORTUNITIES IN THE US DIGITAL THERAPEUTICS MARKET?