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Digital Therapeutics as Digital Companions: Models for Effective Pharma Partnerships

October 20, 2020


Written by: Tom Rutkowski Eric Yang Eric Bernath Temitope Coker Manon Ricard

Executive Summary:

  • Commercialization of digital therapeutics (DTx) that function as digital companions may increase post-COVID-19 as biopharma manufacturers enhance next-generation commercial offerings for patients who are now more accustomed to digital health technology
  • Drug manufacturers that are facing market access or uptake challenges may find distinct commercial advantages in prioritizing digital companions that enhance outcomes for products within their portfolio
  • Pharma and biotech companies should be prepared to make long-term investments in capability building, market development, and evidence generation to maximize the value of digital companions; it will be crucial to proactively identify potential bottlenecks in the real-world adoption of digital companions, as these may not present themselves in the controlled setting of a clinical trial
  • DTx that are well-suited for innovative payment models or risk-sharing contracts will have the highest likelihood of coverage by payers, who are beginning to expect such arrangements before granting access

CBPartners’ Take: DTx that serve as digital companions for drugs can be advantageous commercial investments by improving a biopharma manufacturer’s strategic position through innovation that enhances the value proposition for patients. Companies should establish DTx vetting processes as soon as possible to avoid missing out on valuable opportunities

Engaging Patients with Digital Technology

  • The use of digital technology to engage patients and providers has skyrocketed over the past few years. The paradigm-shifting impact of COVID-19 has further accelerated the momentum to leverage technology to improve patient outcomes
  • Digital therapeutics (DTx) – software that delivers a clinical mechanism of action on its own or in combination with other treatments – have begun to rapidly enter the mainstream to provide innovative healthcare solutions
  • Digital companions, which can improve outcomes through dosing optimization, adherence support, or even disease-modifying interventions, remain a nascent category in the DTx field. However, certain market forces are converging to create an environment more favorable to the adoption of these novel technologies:
    • Payers and providers are leveraging digital solutions to harness real-world evidence and better manage patient care, especially in the wake of COVID-19
    • Patients are seeking enhanced support along their treatment journey via consumer-oriented digital offerings
    • Biopharma companies are looking to enhance their value proposition as well as their commercial position in competitive spaces, especially if drug pricing continues to be under the spotlight
  • Specific to biopharma, DTx should be viewed as a key strategic priority for future business growth. Companies should invest in DTx with a targeted approach in light of potential pitfalls, but when well-executed, DTx may unlock significant commercial opportunity as the rapid evolution of digital technology transforms patient engagement
  • Digital companions for traditional pharmaceuticals have already been commercialized for a wide variety of disease areas, including respiratory disease, mental health, diabetes, oncology, and gastrointestinal disease. This approach to optimizing drug therapy can provide a major enhancement to clinical outcomes when accomplished successfully. However, a careful vetting process is essential when evaluating the commercial potential of digital companions for partnerships or acquisitions
  • To help guide the biopharma decision-making process on DTx, CBPartners has prepared two sets of insights focused on what it will take to succeed in the digital companion space:
    • A robust assessment of how digital companion have successfully engaged with biopharma in the past
    • A high-level framework biopharma companies can use to guide their future digital companion decision-making

Digital Companions Case Studies

To identify the success factors and pitfalls in past partnership / acquisition decisions for digital companions, CBPartners conducted an in-depth assessment of a range of approved and pipeline digital companions. These case studies span across a spectrum of brand-agnostic to brand-specific digital companions and involve a variety of therapeutic areas and industry partners.

A total of five DTx companion partnerships / acquisitions were analyzed across the following dimensions:

  • General context (e.g., partnerships, disease areas)
  • Evidence generation (e.g., clinical trials, endpoints)
  • Success factors (e.g., reasons why partnerships were signed)
  • Challenges (e.g., reasons why uptake may be low)

The results of the analysis are shown in the table below, and they point to common success factors (e.g., addressing unmet needs) and challenges (e.g., generating robust real-world data). CBPartners leveraged commonalities and insights from these case studies to develop a DTx investment decision-tree.

When to Invest? – Decision-making Process for Investing in Digital Companions

Drug manufacturers seeking to invest in digital companions need to account for both organizational readiness and commercial opportunity, which can be challenging to think through without a structured framework. To delineate the multiple layers of a robust decision-making process for vetting digital companions, CBPartners drew upon key trends observed in the aforementioned case studies. The commercial framework below outlines each key decision point that could be leveraged to make important partnership / business development decisions around companion diagnostics.

To better understand how the decision-tree can work in practice, let’s examine the decision-making process for each of our analogues across key decision points. Additionally, as PBMs are likely to expand digital formulary coverage in the future to other therapeutic areas like gastrointestinal, women’s health, oncology, inflammatory and musculoskeletal conditions, it is also important to illustrate how the decision tree could influence biopharmaceutical DTx BD decision making.

To understand how this decision-tree structure could be applied to future DTx innovation, CBPartners will present a hypothetical future situation in which the manufacturer of an irritable bowel syndrome (IBS) drug seeks to select a digital companion partner.

  • There are already several DTx in the pipeline with a focus on gastrointestinal disease (i.e., Mahana, MetaMe, Bold Health), but to-date, none have established an industry partnership
  • For this thought exercise, CBPartners considered the IBS DTx that is furthest along in its development trajectory – Parallel, a cognitive behavioral therapy (CBT) app developed by Mahana that has published data from a large randomized controlled clinical trial (N=558, 12-months). Parallel provides a complementary treatment, intended to work in combination with any IBS medication a patient’s doctor may have prescribed
  • In this case, we will assume that integrating the novel drug within a CBT platform will lead to improved adherence and greater patient benefits than using the drug alone

DTx Investment Decision Point: Overarching Purpose

Digital companions can offer distinct benefits to support the access and uptake of associated drugs. For example, they can promote adherence in chronic disease areas or provide a path to real-world data collection. When evaluating the Overarching Purpose node, it will be important to clearly articulate the drivers which will lead to a clear commercial advantage and then determine if a digital companion aligns with promoting those drivers.  Drug manufacturers should also think about whether the commercial advantage of a digital companion is replicable by competitors; an optimal DTx investment should have a low risk of value erosion from other companies following suit.

If there are no immediate access or uptake challenges to address, biopharma companies should only consider digital companions if their leadership teams are interested in sparking organizational change. Investing in a digital companion should be accompanied by the development of internal digital capabilities, including IT expertise and marketing / sales training, and forward-looking clinical studies.

EXISTING CASE STUDY: BIIB partnered with MicroHealth, a care management app, to both promote adherence and compete for share of patients in the crowded hemophilia space.

Future Application: IBS DTx Market

  • A novel drug to treat IBS would likely be compared against the many low-cost symptomatic therapies used today. As such, launching with a digital companion could drive greater value differentiation from existing therapies, especially if CBT clearly shows a synergistic effect with the disease-modifying drug that isn’t seen with symptomatic treatments
  • If the novel IBS drug is already able to generate paradigm-changing patient improvements on its own, a CBT digital companion may be less valuable from an incremental outcomes standpoint but could still support patient engagement, real-world data collection, and brand loyalty, justifying the investment
  • In a future world where multiple IBS digital companions exist, drug manufacturers should only consider an exclusive partnership if one of the following drivers of competitive advantage hold true:
    • DTx has a large user base, likely due to favorable UI functionality and ingrained provider or PBM relationships that would be hard for others to replicate
    • DTx is clearly differentiated in terms of the strength of its clinical evidence, and it would take years for the others to catch up
    • DTx is able to generate robust evidence in support of switching to a specific drug therapy over competing drug therapies

DTx Investment Decision Point: Evidence Generation

DTx are an intrinsically differentiated subset of digital health driven by the pursuit of robust clinical evidence. However, not all digital companions have a robust evidence base, and drug manufacturers should be conscious of the amount of investment and data generation needed to demonstrate measurable clinical outcomes that support the benefits of a digital companion. Even with a comparative clinical trial, the wrong endpoints or the wrong data collection timeframe could significantly limit the perceived value of a digital companion by payers or providers. In addition to clinical trial data, payers may demand to see real-world evidence, so drug manufacturers should be prepared to support long-term evidence generation plans for their digital companions as part of their financial commitments.

EXISTING CASE STUDY: AZ partnered with Voluntis / Theraxium Oncology to develop an adverse event management platform to run clinical trials in association with their specific brands in oncology.

Future Application: IBS DTx Market

  • Given that the existing IBS DTx manufacturers (e.g., Mahana and Parallel) already have data collected from refractory IBS patients as part of a three-arm, comparative RCT, a biopharma partner can be assured that initial clinical research in the target population to assess safety and effectiveness has been completed
  • However, patient-reported endpoints like symptom severity and quality of life are unlikely to have much influence on payer decision-making in the US; this will become a potential bottleneck in the decision tree, where a partnering drug manufacturer will need to be ready to help a DTx manufacturer design real-world studies that look into hospital resource utilization and patient productivity impact from reduced severity of IBS

DTx Investment Decision Point: Utilization Potential

Drug manufacturers should also be prepared to invest additional resources into shaping the market to overcome hurdles to real-world uptake. There are three key stakeholders to engage in market-shaping activities, depending on the nature of the drug and the digital companion:

  1. Patients: There have been past examples where digital companions with impressive records in clinical trials experienced minimal adoption or a quick drop-off in utilization in a real-world setting. The lack of adoption then becomes a showstopper for coverage by payers or employers, who have no interest in driving uptake on their end
  2. Providers: Because most digital companions will lead to increased patient data outputs, there is always a risk of provider overload from data analytics workstreams or overcommunication from patients. When vetting digital companions, drug manufacturers should try to resolve any issues of incremental provider burden in order to ensure that prescribing physicians have a positive option of the DTx
  3. Employers: While their involvement may be situational, employers could be an important stakeholder in driving DTx adoption. For reimbursed DTx, employers who can be convinced of productivity gains for their employees may choose to set up incentives for patients to sustain their DTx utilization. For non-reimbursed DTx, employers could decide to offer free employee subscriptions to realize proven productivity gains

EXISTING CASE STUDY: SANDOZ returned the commercialization rights to Pear Therapeutics for reSET-O, a prescription mobile application to reduce illicit drug use, after it achieve FDA approval. This was likely triggered by the relatively low uptake (i.e., only 4,000 total prescriptions by late 2019), which may have been caused by the fact that the app was paired with a poor drug choice, as 90% of opioid clinics use methadone rather than buprenorphine.

Future Application: IBS DTx Market

  • If the IBS drug manufacturer is willing to support further evidence generation, DTx app engagement is likely to be high for a disease like refractory IBS
  • For these patients, conventional symptomatic therapies will have limited effectiveness, so the presence of uncomfortable symptoms will be a constant reminder to stay adherent to the CBT lesson schedule
  • For GI physicians, CBT would be unlikely to conflict with their service offerings, so they will be more likely to recommend a DTx (e.g., Mahana and Parallel) in order to improve overall patient satisfaction with their care
  • For employers, the workplace productivity gains for employees who can better manage their IBS symptoms may be meaningful enough to warrant incentivizing app adoption and its sustained use

DTx Investment Decision Point: Pricing and Market Access

Pharma and biotech companies should evaluate the business case for separate reimbursement of the digital companion. Some digital companions may be designed in a way that facilitates separate coverage by payers / reimbursement for providers; other digital companions may still add value for their associated drugs without direct reimbursement. The following models are all viable:

  1. Reimbursement by payers for separately prescribed digital companions (typically with an NDC code and strong clinical evidence)
  2. Non-reimbursed digital companions as free offerings to patients that enhance the value proposition for payers or drive patient engagement to increase commercial adoption
  3. Non-reimbursed digital companions as a free offering to patients that can generate real-world data for drug companies to inform long-term biopharma portfolio strategies

Any drug manufacturer intent on pursuing coverage for digital companions should be ready to face payer demands for alternative pricing models / innovative contracting. Unlike in the past, when risk-sharing was viewed to be skewed in favor of manufacturers, payers see risk-sharing for digital therapeutics to be more balanced, given the uncertainty of long-term data on both sides. Drug manufacturers need to have relevant internal digital contract management and analytic capabilities before they begin to approach payers about reimbursement for digital companions.


  • TEVA developed ProAir Digihaler, an in-house a companion DTx for their successful brand, that would fall within traditional pharmacy reimbursement channels
  • ROG partnered with MySugr to support medtech product use and introduced a DTC self-pay model

Future Application: IBS DTx Market

  • When considering the need for DTx coverage, the final decision on whether or not to partner with an IBS DTx partner (e.g., Mahana) will depend on the goals of the IBS drug manufacturer
  • Given that payers are likely to be skeptical about the value of CBT for gastrointestinal disease, a reasonable near-term assumption would be that the digital companion itself will not achieve separate reimbursement
    • In the case that the IBS drug is facing access hurdles, partnering with a DTx manufacturer to generate more real-world evidence may be valuable to address certain payer concerns
    • Partnering with a DTx manufacturer could also help a novel IBS drug address competitive pressures, with the IBS drug manufacturer sponsoring adoption of the digital companion
    • However, if the IBS drug manufacturer lacks the resources to support the scale-up of the digital companion, the partnership faces pitfalls that will hinder commercial success

Looking to the Future of Digital Technology

Through the case studies examined in this article, it is clear that some digital companions are less integrated with biopharma companies compared to others. This is in part driven by the underlying differences in the technology and drug attributes, but it is also attributable to the complicated FDA regulatory landscape on prescription drug companion apps.

However, there is a current proposal (Docket Number: FDA-2018-N-3017) to regulate brand-specific prescription drug companion apps as promotional labeling given it accompanies a specific drug, which would not require an additional FDA approval process. This could potentially change the way biopharma companies in the future develop and partner with brand-specific digital companions and presents an opportunity for further development in the DTx space.


If you are interested in reading more about the digital therapeutics landscape, read related posts in the expertise team’s thought leadership channel.