"A broader set of payers has realized that the traditional models will only ever reach a small percentage of people in need," says one digital therapeutic executive.
With the $1-trillion-plus bipartisan infrastructure bill now signed into law, the healthcare industry has its own infrastructure challenges to tackle: how to deliver, bill, and reimburse entirely new kinds of benefits. Digital therapeutics (DTx) are one of those benefits and one of the answers is by using healthcare's "existing pipes" in novel ways. While only some DTx products require a prescription (PDT, or prescription digital therapeutics), stakeholders are using PBM channels to advance DTx commercialization in a way that reduces friction while answering unmet need—particularly in mental health.
Using PBM infrastructure for non-prescription DTx
The Digital Therapeutics Alliance defines DTx products as those that "deliver medical interventions directly to patients using evidence-based, clinically evaluated software to treat, manage, and prevent a broad spectrum of diseases and disorders" alongside medication. And while only some DTx products require PDT, stakeholders are using PBM channels to advance DTx commercialization.
This approach begins with a simple question, captured by Peter Hames, co-founder of Big Health: "Can we bill for software in the same way as a drug, even though it's not a PDT?" Hames continues: "The approach involves taking a machine designed for one thing and retrofitting it to make it work in a different way. There isn't an obvious answer, so you have to try it."
Big Health—which offers two non-prescription DTx products (Sleepio for insomnia and Daylight for anxiety)—worked with CVS Health to uncover these answers. "In our partnership with CVS, we worked with their senior leaders on the overall concepts of a digital formulary for a couple of years prior to going live," says Hames. "We brought a good hypothesis of value and went in with humility. CVS brought expertise in how to execute."
Jill Borrelli, LICSW, vice president of behavioral health at Point32Health, agrees that "collaborating to make … innovative digital therapeutics more accessible to people" is key to care access and support for multiple behavioral health conditions. Point32Health is doing its own work in the space, with member Tufts Health Plan piloting a PDT for substance and opioid treatment in Massachusetts.
From pioneering to expansion
Using PBM as a channel for non-prescription, non-drug claims goes one step further than, for example, a payer using its pharmacy benefit to provide DTx coverage. As Hames notes: "PBMs have enormous reach and administer for every type of payer. They offer standardized methods and formats to submit and adjudicate claims that we’ve been able to harness."
The Big Health-CVS partnership paved the way for other DTx products to join the PBM's Point Solutions Management, which grew from six in 2020 to 10. Two additional services target fertility and specialty drug cost management for Point Solutions Management which, per CVS, is designed to help its PBM clients "simplify contracting, secure lowest price and monitor ongoing performance of third-party health care point solutions, which can help maximize their benefits program while minimizing associated spend."
CVS Health is not alone in the DTx partnership space. The leading PBMs including CVS Health—Caremark, Express Scripts, OptumRx—represent 77% of prescription claims managed, are all linked to payers (Aetna, Cigna, and UnitedHealth, respectively), and are all working with manufacturers to help commercialize DTx and PDT.
The impact of unmet need on patients and payers
This expansion is needed. Mental Health America reports that 57.2%. U.S. adults diagnosed with mental illness receive no treatment. Many face access challenges when they do.
"I often say that we are looking the wrong way when it comes to mental health. With … adult Americans experiencing a clinical level mental health issue, we simply don’t have enough therapists to address the body of need," says Hames. "Due to the limited number of therapists, in-person and teletherapy are only addressing the tip of the iceberg. We are focused on helping those under the waterline."
Provider shortages impact patients and payers alike. Despite federal and emerging state laws that mandate and penalize for inadequate networks and long wait times, Kaiser Health News highlights that there are parts of the U.S. that "don't have enough therapists at any price."
This doesn’t mean that DTx is intended to replace providers. "DTx solutions that are proven clinically effective can function as a standalone while also integrating with existing care models," notes Hames.
He does say, however, that established approaches to mental healthcare are topping out: "A broader set of payers has realized that the traditional models will only ever reach a small percentage of people in need."
Solving payer problems
These scenarios create opportunities for DTx to help payers meet need. In a separate interview with Digital Health Today, Hames shared the related insight that the customer is "whoever economically benefits from … [an] individual being healthy as quickly as possible. That customer is, therefore, whoever pays their healthcare costs." In continued conversation with HealthLeaders, Hames added: "Our goal is to align incentives with the people we’re trying to help to deliver value."
The other goal is working out the mechanics of making PBM DTx delivery a "low-lift engagement" through:
- Pre-approved DTx products that make it easier to add them to plan coverage via PBM addendum.
- Integration of distribution and care pathways.
- DTx itemized alongside drugs on pharmaceutical invoices.
"Leveraging standard coding models, creating new ones, looking at benefit categories and copays, who sends what when and how items appear on the invoice. We looked at every single piece of the process and how to apply it to digital therapeutics instead of drug reimbursement in a way that removes friction from the process."
Clinical effectiveness and challenging precedent
Demonstrating clinical effectiveness for improved outcomes is part of this process.
About Point Solutions Management, for example, CVS Caremark CMO Sreekanth Chaguturu, MD, states: "We have analyzed pharmacy and medical claims to identify where these benefits can make a difference and employ a rigorous and transparent evaluation process to [ensure] that any vendor included in Point Solutions Management meets high standards for safety, quality and user experience at the vendor's lowest price in the marketplace."
Collectively, Big Health's Sleepio and Daylight products have been the subject of 13 randomized controlled trials as part of the company's clinical evidence focus.
Results like these are important to payers, with their concerns over outcomes being part of the reason why the Centers for Medicare & Medicaid Services is going back to the drawing board on its federal DTx guidelines.
A combination of proven results and the novel delivery and reimbursement will be needed.
"DTx is technology on the front of human-delivered care," says Hames. "This is a hard area of development and healthcare is largely precedent based. But so much is done just because that's the way it's always been done."
Laura Beerman is a contributing writer for HealthLeaders.
Partnerships between digital therapeutics (DTx) manufacturers and pharmacy benefit managers are increasing as stakeholders look for new ways to deliver novel products for patients needing care.
Retrofitting PBM's "pipes" for non-prescription, non-drug treatment is helping to reduce friction for payers.
Big Health and CVS Health have pioneered one of those partnerships, which now includes multiple DTx solutions.