Q&A: Digital therapeutics’ future after the fall of Pear Therapeutics

Since Pear Therapeutics, one of the earliest digital therapeutic companies, declared bankruptcy in April, there’s been discussion surrounding the state of investments in digital therapeutics, challenges that exist around standards of care, barriers to adoption and how to achieve success in the sector. 

Andy Molnar, CEO of the Digital Therapeutics Alliance, a non-profit organization that provides thought leadership and education to advance digital therapeutic adoption, sat down with MobiHealthNews to provide his insight into the digital therapeutic market and how Pear’s bankruptcy has affected the industry. 

MobiHealthNews: What’s going on in digital therapeutics, and how do you feel Pear’s bankruptcy is impacting the market?

Andy Molnar: It’s such a weird year because this was one of the first years we saw Medicaid coverage move forward really quickly, continuing off of the momentum from last year. We’re seeing payers take digital therapeutics more seriously and, at the same time, venture capital funding is really hard to get, where five years ago it was being handed out easily. But back then we didn’t know how these products were going to get paid for. Now we actually see a path. So for me, it was really hard to kind of grasp how these two major things are happening at the same time. It’s really hard for me to reconcile it in my head.  

We’re still keeping everything moving forward as smart as we can be today. I mean digital therapeutics, prescription digital therapeutics and digital health in general is obviously not going away. It’s here to stay, and we’re here to help guide it. And five years ago when we started, we just weren’t as smart as we are now.  

Maybe it’s just a nice reset, you know? Many people say, okay, how much money does it really take? How much do we really need? Where do you put your resources? That’s why we put together a launch playbook to help our member companies understand what’s the best place to put your resources. 

MHN: Do you think the rate of provider adoption and payer reimbursement is holding back the progression of digital therapeutics?

Molnar: I think it’s really clear that the U.S. healthcare system is not designed to promote innovation. The difficulty of bringing a totally new category of products into payer systems and provider systems or the training needed for pharmacists and things like that. Our system is built to say no, right? When you want to get Medicare coverage passed, they have to find that money somewhere else and take it away from somebody else. So whatever our bill ends up costing — and we’re in the middle of a CBO [Congressional Budget Office] process now — if it’s, I don’t know, $10 billion over 10 years, who’s gonna lose that money? You don’t want to take it from doctors. You don’t want to take it away from other innovations. And so with that, Medicare has been in a stand still when it comes to coding and things like that. So I know AppliedVR got a code, but they were under DME [durable medical equipment]. It’s a little bit different. And then Pear got the code A9291, which Medicare specifically said, we’re not going to reimburse for.

MHN: What do you see happening this year within digital therapeutics? Where do you see it progressing?

Molnar: Well, I’m hoping that a lot of the Medicaid stuff continues to drive forward from the momentum that we saw from Pear. It’s still too early to say what effect their bankruptcy is going to have on that. But they had three or four states now, and we’re in conversations with other state Medicaid directors. Now that they see a way, they want to follow in that path. And so I really, really hope that Pear’s products stay on the market, because you don’t know what’s going to happen. But they’re profitable at this point — profitable meaning their products are making revenue. And so you’d love to see somebody continue that on. And then we’d love to see these other products sort of come in behind it. But I want to see the commercial space move forward. I want to see Medicare at least acknowledge what types of codes they’re gonna give out. But I really think the government state programs will start pushing commercial plans as well.

Also, we’re doing our inaugural summit in early June. What we did was we tied it on to our Hill day events or our fly-in days. We did three events within last year and the year before. So basically, twice a year is what we were doing. And we found that we were putting panels together of all these specialists in the government and it was basically, half of it was a conference and half of it was talking to Congress. And we thought, you know what, we have such great momentum down here. How do we turn this into something bigger? And so that’s why we’re doing the conference this year.