Most Payers Are Unfamiliar with Prescription Digital Therapeutics

Prescription digital therapeutics (PDTs) coverage remains nascent, as the adoption rate is only at 40 percent among the minority of payers who have familiarity with PDTs, according to a survey that Avalere conducted for Pear Therapeutics.

A post from the Institute for Patient Access defined PDTs most succinctly.

“Prescription digital therapeutics are software programs that physicians prescribe as a form of treatment,” the post explained. “The software captures patients’ information about symptoms or progress that can then be shared or remotely accessed by their providers. The technology has been found to help patients adhere to their treatment plans.”

Out of the 180 payers and self-insured employer groups that responded to the survey, 30 payers and 10 self-insured employers—representing over 190 million covered lives—were familiar with PDTs. Over three-quarters of the respondents had no familiarity with PDT and were discounted from the survey.

Four in ten respondents indicated that they currently cover PDTs. Half of the respondents predicted that they would start covering PDTs in the next 18 months. Five percent remained uncertain about whether they would cover PDTs and another five percent reported that they were unlikely to start covering PDTs in the next 18 months.

Payers emphasized four reasons that they would consider covering PDTs. Randomized controlled trials and published real-world evidence would offer the fundamental evidence that the therapeutics were effective. FDA authorization would also demonstrate efficacy. Lastly, proven cost offsets would be a significant motivator for payers to cover these therapies.

In addition to these data points that would provide an evidence base for coverage, payers found PDTs valuable when they could offer on-demand access to care, when they cost less than counterpart solutions, and when providers could receive patient-reported outcomes. 

Although PDTs have the potential to add this value, barely over half of the respondents stated that value-based reimbursement would be appropriate for PDT reimbursement. For those who were interested in using value-based contracting to cover PDTs, key metrics could include cost savings, patient adherence, fewer hospitalizations, patient outcomes, and patient satisfaction.

Payers are prepared for PDTs in certain areas, but there is still room for improvement. For instance, two-thirds of the insurers and employers had created coverage criteria for PDT coverage. However, 60 percent of payer respondents and 90 percent of self-insured employer respondents stated that they had not established a PDT formulary.

The lack of a PDT formulary may be connected to the fact that eight out of ten respondents stated that pharmacy benefit managers have the responsibility to determine PDT coverage.

The survey investigated how payers learn about PDTs. Nine out of ten payers stated that manufacturers were responsible for informing payers about PDTs. Education on coding and reimbursement will be essential to expanding PDT coverage, payers indicated. Manufacturers also need to be clear about the patient population that the PDT will serve.

Establishing pharmacy and therapeutics committees was the most common method that payers used to assess PDT solutions (43 percent). Three out of ten payers used medical benefits committees to analyze the solutions, while 12 percent had no process or an alternative process for analysis.

PDTs are slowly gaining more evidence and more traction, however, which means that payers soon may have to confront PDT coverage.

In March 2020, the FDA approved the first prescription digital therapeutic that addressed chronic insomnia in adults. 

A little over a year later, the same PDT company partnered with Northwell Health to allow providers to prescribe digital therapeutics for substance abuse treatment programs. Research on this effort indicated that the therapy was positively associated with substance abstinence and treatment adherence. Over nine in ten patients satisfied the urine drug screening metric.