Anyone who follows me knows that I’ve been questioning whether digital therapeutics are real and more importantly whether the people building and trying to sell them are simply trying to replicate the American drug pricing model–patent, protect, prescribe & price gouge. So who better to have this conversation with than the person in charge of explaining and selling the notion of digital therapeutics to the world? Megan Coder is Executive Director of the Digital Therapeutics Alliance. She graciously and bravely agreed to talk to me. Who won the argument? You’ll have to watch to decide, but I found our discussion to be a lot of fun and very interesting and I hope you will too – Matthew Holt

The transcript is below

Matthew Holt:

Hi, it’s Matthew Holt with a  THCB spotlight. I’m here with Megan Coder. Megan is the executive director of the Digital Therapeutics Alliance. And we’re here to talk about this thing called digital therapeutics, as to what they are, what the alliance does and whether they really exist and how we should treat them. Megan, thanks for coming on. I know we’ve done a little bit of sparring online and in-person, but I’ve never interviewed you. So I’m looking forward to this. So how are you doing?

Megan Coder:

Good. It’s more fun to spar in-person, but I miss the in-person aspect.

Matthew Holt:

I mean, we’re all hoping to get back of that pretty soon. But I’m in my fifties and they’re not so far away in California from giving us old people the shots and then hopefully we’ll be back to normal at some point. Anyway, for those people who don’t know, just tell people what the Digital Therapeutics Alliance is. And then we’ll dive into a bit about what digital therapeutics are, but tell us about the organization that you lead.

Megan Coder:

Sounds good. So about three and a half or so years ago, we created an association really to come together to talk about what even are digital therapeutics, to the point you’re asking, what are some of the ways that we can define this industry, start to distinguish it from other types of digital technologies out there, how can we encourage quality across all the different types of products out here and really bring people together from across the world to really talk about what this is and how we can do this better. Really with that focal point though of, how do we serve patients, clinicians, payers and regulatory agencies as they start to embark on this pathway? So that has really been our mission from the start and continues to be.

Matthew Holt:

Okay, so you’re kind of an organization that’s on the way to being a typical lobbying group. You had to sort of set up more and identify the industry and do a bit more work than that. And we’ll talk a bit about some of that work you’ve done, but tell me some of the companies who were involved and who are your members?

Megan Coder:

All right. So on the board, for example, we have Akili, we have WellDoc, we have Voluntis, we have Duke Clinical Research Institute, Big Health, Freespira, so we have a lot of those types of companies that are really the innovators and the leaders in this industry. We then also have a number of pharmaceutical & life science companies that are really building into this space in addition to a couple of technology companies, a few academic centers, so it’s really been cool to see a good cross representation of the industry. More or less, we have 40 some companies across 15 countries. So I love the international component of what we’re doing.

Matthew Holt:

All right. Well, we all love that good international travel. I think we met in Berlin and it was a lot of fun.

Megan Coder:

I know. It was a long time ago.

Matthew Holt:

We’ll get back there soon. So you’ve also been involved, not just in the sort of lobbying and sales side, but you guys have done a bunch of work with the Digital Medicine Society and I believe HealthXL  doing some definitions. And speaking as a guy who has been defining Health 2.0 and you probably don’t remember but I defined, oh, I think “Unplatforms” and then we have a thing called the “health interface layer” and the “digital data utility layer” and then Indu Subaiya defined “Health 2.0” in five different ways. So I’m all about the definitions of what’s right and what’s wrong. And then by the digital health is a real definition and there was mHealth and God knows what else, but you came up with a combination of digital health, digital medicine and digital therapeutics. Real quick, can you just run over what the difference is between those three things?

Megan Coder:

So I think to some of the points, I think you’re going to be making eventually, I think the definitions will continue to evolve. So all that to say, we really want to at least start off on this notion of let’s just start to create some of the parameters that we believe exist in the industry. So digital health, everything, basically everything from enterprise support, to clinician support, to patient wellness and so forth. Under and within digital health sits digital medicine, and really DiMe has been really helping me that off.

Matthew Holt:

That’s the Digital Medicine Society.

Megan Coder:

Perfect. Thank you. And then, so that (Digital Medicine) is more of those products that are measuring and intervening. And digital therapeutics are the subset of digital medicine that intervenes. So it really is just a way to help people understand what we’re talking about and where we all fit. There’s a number of other characterizations that will, I’m sure, be created, but that was just our first attempt to really start to say if digital health is everything, digital medicine are those that require clinical evidence and some degree of regulatory oversight as appropriate to the claimant indication and then digital therapeutics really are that more narrow subset that really fits within the digital medicine space.

Matthew Holt:

Okay. So let’s unpack a little bit what people are calling digital therapeutics. Now, the other thing is that not everyone who has a digital therapeutic, quote, unquote, is quite applying to your definition. Not everyone’s necessarily a member, but you’re seeing a lot of people talk about this. And in fact, going way back to when Sean Duffy from Omada started writing about this in 2014, there I think was a product, what you might call digital medicine or even digital health but he originally started calling it digital therapeutic. But really a lot of what was going on in say the diabetes prevention space or maybe in the mental health space are essentially taking what had been long-term practices that were done and delivered, either by a book, or by community, or by some direct instruction or however and basically creating a digital format of those.

And you could argue that’s what Omada did with DPP, and you can argue a lot of what’s going on in the CBT world, in mental health is in that bucket. I think it’s a stretch as to whether to call that a therapeutic because you tend to think of a therapeutic as something that’s regulated by the FDA, because it has the potential to harm people. That’s why the FDA is there, it’s obviously for safety, and to some extent for effectiveness, and potentially one day maybe, or you’re an international organization– so the Australian FDA looks at cost effectiveness as well. But the question is, there’s a distinction between digital products that are attempting to, if you like, reproduce what happened before and those that are trying to do an effective, actual change of condition.

So you mentioned Akili. They have a video game which essentially standalone they say–I mean, they have data from clinical trials–is the equivalent of taking a medication like Ritalin, which is an ADHD medication for kids. And essentially they’re saying it does the same thing by making a physical intervention with the brain via the video game. There are other people doing this with flashing lights for pain and we’re talking about people doing this in Alzheimer’s using different types of ways and people using sound or other types of things. So that category I get. I understand you could call that a therapeutic, digital therapeutic. Do you find that you are seeing the distinction between that kind of category and the ones that are kind of more like “we’re putting together a series of tools that were used before, or maybe are new, but are now kind of more of a general healthcare process?” And I’d argue to some of the tools you get from a Pear or Click Therapeutics might be more like that.

Megan Coder:

All right. Well, you had a lot in that question to unpack!

Matthew Holt:

Well, I’m trying to get this distinction about what is the bit that’s really therapeutic?

Megan Coder:

Okay. I think let’s just stand back and the way that I’ve been talking about digital therapeutics and we at the alliance and others within the industry has been looking at the idea that it’s software that is generating an intervention, delivering that intervention and really looking at that intervention for the sake of actually saying, I want to prevent, manage, or treat a medical disease or disorder. So I think to one of the points you were making earlier, is it actually has to have an impact on a disease state, exactly what you’re doing. So as soon as you’re using software to actually impact a disease state for a specific patient and specific condition, that’s when in my mind, it goes from that wellness space and into that therapeutic side.

So digital therapeutics can work alongside of medications, they can work alongside of different in-person therapies, they can also then work alongside of other different types of platform technologies. And I think some of what you’ve mentioned earlier are now more in that space, where you’re looking some monitoring diagnostic fitting in with the digital therapeutic and alongside of clinician support and other forms of coaching and all of this. So it’s more of a suite of products. One aspect of that though, is a digital therapeutic. And that’s the point where we say, now you have to do a clinical trial and submit to regulatory oversight, and quality management systems, and patient centricity and all of those notions there. So that is really where the area I’m focusing in on. When we’re talking about digital therapeutics, so you bring up the point, there are a lot of different mechanisms of action. So some will have delivery of CBT, some will have a direct activation of neural networks, others will have a variety of other aspects too.

So I think what we’re seeing now is really that evolution of what the mechanism of action is, and how they’re addressing specific disease states, and why there’s the full disease state that they’re addressing versus a component of it, or if it’s an addition to a medication, how that’s working too. So I think we’re seeing a lot of evolution already with what has taken place from 2010 and beyond in the digital therapeutic industry. There’s been a lot of evolution. There’s going to continue to be a lot of evolution. And that is why I’m increasingly excited and intrigued by ideas that I never would have thought of myself, we’re really seeing that start to come to market and be developed. So I’ll pause there. I also gave a long answer to a long question

Matthew Holt:

It’s a very complicated topic, because there are many things that are overlapping. So one of them is, as you said, is the therapeutic kind of doing the equivalent of a molecule or a compound. It’s making some kind of change to the human body, to the brain, or what have you. So that’s a big one. And you can argue, of course, that all health care and medical interventions are making some kind of that change. You read a diet book and go on a diet, you’re making some change to your body, but the hope is that using a tool like in Omada or Retrofit, one of these things, you’re doing it more effectively, you’re going to do it better. I wouldn’t say that was the same as putting a drug in your body.

If you put a drug in your body, if you put a chemical compound in your body, there’s obviously a lot of risk of side effects and that’s mostly what the FDA was originally set up to do. You got FDA regulation to make sure the thing wouldn’t kill you, going back to the 1930s. And then later on, they added this idea of efficacy, so is it going to be effective and is the outcome of the drug worth the side effects? Because all the drugs have side effects. You could argue that a lot of the issue around risk is that there’s not as much risk with many of these digital interventions, because if you–and I agree there has to be some testing of this–but if we are making you play a video game and it improves your ADHD, I mean, I guess there’s a risk of getting more addicted to video game or there’s a risk it doesn’t work, but there’s probably not an actual physical risk like there is in taking a drug. Would you accept that or am I misstating?

Megan Coder:

I won’t accept that in all regards, but some I think there’s fairness there. So if you look at those that are responding to patients with insulin, for example, a digital therapeutic knows what your last dose of insulin was and what your blood glucose is, and then tells you, now take this many units of insulin right now, because that’s responsive and is an active response. If it’s off by decimal point there is significant harm there. So I think there are different levels of risks that are embedded in some of these products and some of them could actually be very harmful in some regards.

Again, I’m a pharmacist by background, so I spent quite a few years counseling and going over the side effects of medication, so I know that intimately well. Digital therapeutics, there are fewer risks I think in general, which is great. There are some though, and I think some of those could relate to some more of those medication specific ones or other notions of that nature. But I think you brought up the efficacy point. There’s a lot that can be said about digital anything. So let’s make sure that it’s actually doing what it needs to be doing and it’s impacting patients the way it needs to be impacting them. So that’s why we’re really looking at doing clinical trials, getting them published in a peer reviewed journal, undergoing regulatory oversight, so all of that to say, I think that efficacy is really important and that’s where entities like notify bodies, FDA, or other entities out there who are looking at this really come into play for our industry.

Matthew Holt:

So I think there are two things that are crossing here, maybe three if we’re in a multidimensional space. I guess when I wave my hands around in this Zoom background that may be indicative of it!

So one is, and I think you’re referring one of the first ones that got FDA approval Welldoc where it says, time to eat more glucose because your insulin level is up or down or what have you. And yes, if things go wrong that can be extremely risky. And this is a line that the EMR industry tiptoed around. Sort of when it’s giving you an instruction as to what to do as a clinician, what to do next, or it’s telling a patient what to do next.

There was also an idea that a clinician, a pharmacist, or a doctor, or nurse was making a judgment that it was their decision based on the information they were given, but we know half the time people would just sort of those clinicians were just putting in the instruction of what they’d been told. And so, yes, the EMR industry’s always danced around not being FDA regulated, whereas the Welldoc’s of the world said, OK we should get regulated because we are doing something that is directly impacting the chemical compounds within the human. So I get that’s one area.

Megan Coder:

Yeah. There’s difference between clinical decision support. So using a technology to suggest something to a clinician and that clinician then says, huh, that’s interesting, I want to use my judgment and make a call on this or that. That’s going to be really different than the software just going directly to the patient and saying, based upon all the factors here, this is exactly what to do, and how to do it, and what you need to take for next steps. So to me, that’s more of that digital therapeutic versus a clinical decision support tool. And part of the reason why I think FDA and others are engaged in this industry, obviously with the risk associated, there’s different levels of FDA engagement and oversight, fully can respect that, but all that to say, I think that’s kind of one of those distinctions that I think where we fit as digital therapeutics compared to some other products out there.

Matthew Holt:

Obviously, there are times when, and we’ve both seen examples in Bob Wachter’s book, where decisions get made, but actually it goes both ways. Sometimes the computer makes a decision and it ends up with a harmful impact and in fact there have been some lawsuits about this from clinical physician support being used. It’s also happens the other way, clinical decision support gets overridden by a pharmacist or by a doctor and a mistake happens. In the Digital Doctor, Bob Wachter’s book, there’s a whole thing about where at UCSF, the pharmacist, the nurse, everyone, even the patient all overrode what the computer said, which is “don’t give this drug” and they gave way too much and the patient nearly died. And obviously we have that kind of error, but there’s that issue, as you said, who is really making the decision if you put a human clinician in the loop?

Megan Coder:

Yeah. I think there’s something to that.

Matthew Holt:

No. And I agree. I mean, that line I think is a little blurrier than you make it out, but I accept there’s a line there.

The other one is, if you now have one of these tools and I would say, Pear and Click are two of the companies that have been aggressively saying, we’re going to create what looks to me more like a standard medical process. It’s more like if I was a doctor, I gave you a book, you went and read it and you did what I said. Now, hopefully you’d do it better, hopefully it’s more effective, hopefully it’s on your smart phone, and pinging you regularly, and we’re tracking you as you’re doing it, so hopefully it’s more effective than if the doctor just gave you a book with some instructions and hoped you go and follow this course of treatment–which may or may not involve an actual medication of course, as well.

Now the FDA has sort of reached out and said, well, we’re going to regulate those algorithms, we’re going to regulate the companies themselves who are doing that more so than the actual individual application, because that cell phone or software might change over time and we have to figure out a way to let that happen. So I think that’s essentially the way the FDA has done it.

I’m now saying that I am struggling to see the difference between that and all the rest of the stuff we do in medicine anyway. This is not to say that the rest of the stuff we do in medicine should not have trials, evidence, figure out if it works, if it doesn’t work. And we also know that in the absence – and I’ve had this fight with the AMA, Jim Madera and others–in the absence of digital health, medicine did a whole lot of everyday practice with a whole lot of stuff going on which is not evidence based, which isn’t necessarily helpful. And we talk about waste in the system and we know there’s a lot of problems.

So I think it’s a great thing to say that, yes, we should have these digital interventions, digital therapeutics, if you want to call them that, analyze, assess, go for clinical rigor, figure out if they work or if they don’t work, figure out if we can improve. That’s all great. My question is, does that mean they have to be regulated like a real drug or medical device, which is doing stuff to your body if it’s not inside your body as it were? If it’s not, if it’s more like essentially I gave you a book, but I digitized it and helped you with coaching, that kind of stuff. Where do you come out on that?

Megan Coder:

Well, I come out on the side that if you meet the definition of a medical device you are going to have to fall in line with what a medical device is and the regulation associated with it

Matthew Holt:

Oh, okay. But to be really clear, something like ReSet-o or the smoking sensation thing that Click came out with, is that a medical device in your view? I believe those guys are members of your alliance, right?

Megan Coder:

Well, I don’t want to speak to any one product directly, because I do not want to misrepresent anyone, just for the fairness to the companies too. But I think all that to say, I think there are some of those that when you again are actually impacting the state of disease, so if you’re curing, treating, mitigating and a couple of others in there, I should know the definition, therefore then no matter what modality you’re using and making a claim, you do need to be subject to either the definition of a drug or medical device. So I think in some of these cases, even though they’re using things that have been in an in-person environment and there is a digitizing aspect of it, there’s a lot more to it also, I think in terms of adding different features or functionalities.

There are some conditions that probably aren’t in that disease state space that we as DTA are going to consider really looking at in terms of what is a disease state. So I think there’s some notions where that wellness–disease state boundary line is still a little gray and I’ll definitely give you that one. But I think in terms of the fact that you’re actually still using software, still going to say, “we’re going to actually treat an aspect of your depression, we’re going to impact an aspect of your substance abuse using software” that yes, relies on things like CBT, but then can add in ideas around contingency management, other forms of patient ported outcomes, and end user feedback, and metrics, and outcomes and things of that nature. So I think once you look at what the holistic package is, it probably goes beyond what is just seen as a simple notion of we’re just going to digitize a pen and paper environment into this new technology interface.

Matthew Holt:

The area we’re not disagreeing is whether or not we shouldn’t be using these tools with an enhanced ecosystem maybe.

Megan Coder:

Is our disagreement around the FDAs engagement then?

Matthew Holt:

Well, let’s just state what I think we agree on. That medicine and health care delivery should move, and it is slowly and should probably move faster to an area where there is sort of computer-based, phone-based, technology-based 24/7 support to a patient, or a caregiver, or family, or what have you, delivering a whole range of things. And that might be human coaching, it might be a bot coaching backed up by humans. There’s a lot of measurements and diagnostic measurement that should go on and we should get to that panoply of interventions suggested to the individual patient or to their caregivers or whomever based on a bunch of rigorous methodology and algorithms about what happens next. And I think, you could argue that whether that involves coaching. But I mean, the typical thing was you’re managing what Eugene Borukhovic calls “disease management 2.0” when you’re managing someone’s diabetes at home and you get a note that their blood sugar level went up, or what have you, whether it’s a bot that tells them what to do about it, whether it’s a human coach calling them up suggesting next steps. I mean, I think that’s a great plus and a great advance of how health care is doing compared to a doctor having a one point interaction with somebody every two months and not really knowing what happens when they go home. So I love that as a thing.

My concern is that if you go down the path of saying this is a medical device or this is the same as a drug, it’s a digital drug, a digital therapeutic, so I’m going to get FDA regulation, then you’re also going on the path of saying two things. One is this then has to stay within the current medical system, has to be prescribed by a doctor. Whereas the overall medical system, I would hope, is somewhat moving away from that and saying, what are the set of services that we could deliver to you (without a point intervention from a doctor)? Respond to that first

Megan Coder:

Let me jump in on that one. I think it is important to know that the FDA does clear products that are non-prescription products also. So they are very active in that space. So just because you have a process of digital therapeutic by how we define it and talk about it, that is considered as a medical device by FDA, there are numerous products that are digital therapeutic products cleared by the FDA that are non-prescription also. So there is an entire pathway that doesn’t require just a prescription pathway. There are many though that do.

Matthew Holt:

So what’s the difference between them? Is the non-prescription one just based on safety? I mean, not that those products shouldn’t do the clinical trial and show that they’re effective as well, because they shouldn’t be used if they’re not. But what’s the difference in your mind between those two?

Megan Coder:

It’s a great question. I think when you’re looking at it, a company will come to the FDA, initially my understanding is –and I have not actually submitted a process or a Pre-Sub to an FDA at this point, personally–But my understanding is you actually identify right off the bat saying, we recognize that we’re a medical device, we are going to go down the non-prescription route or the prescription route. And then you have a discussion around the types of trials and the types of outcomes necessary and what that’s going to look like during your pre-set meeting and then you progress to the process. So I really do believe that companies have a good amount of say in what market access they’re going toward.

Given the fact that some of these will be used by employer groups, some of them will be used by health system groups, some will be used by different PBMs or different entities of that nature. So I think all that to say, every digital therapeutic is going to be addressing a different patient population in a different setting with a different level of rigor, specificity, or whatever the case is for their disease state. So not all digital therapeutics should be prescription only. FDA does clear products that are non-prescription also. So I think that’s just one distinction in there that I don’t think it’s a matter of quality per se. I being part of a digital therapeutic (and part of the DTA) means you have to have quality management system, you have to have clinical trial results, have to have all these extra ongoing notions about our 10 principles.

Matthew Holt:

And they are great by the way, then they should also be applied to non-digital stuff and the rest of the healthcare, which they haven’t been enough, but keep going.

Megan Coder:

No. It’s not my jurisdiction precisely and hence why I’m really focused on that area. But I think that it is one point to bring up though, in terms of you can have a medical device that is an non-prescription product.

Matthew Holt:

Okay. So let’s go on the ones that are heading down the path. And a lot of people have headed down this path. A lot of companies are saying, okay, we built this digital therapeutic, and now we want it to be prescribed, and now we want to be reimbursed kind of like a prescribed drug or medical device. So my criticism is not so much that. The FDA has said that some of these devices are like that. And I think if you’re shining light in somebody’s eyes and telling them you’re going to cure Alzheimer’s or whatever, I understand that has to be shown to be safe. You can’t just willy-nilly say, this thing should be a consumer device. That I grant you.

But if you go down the path that more and more of these things have to be prescribed by a doctor, you’re starting to move that into a medical model which looks like the current drug company medical model. If I had one basic underlying criticism of what’s happening in digital therapeutics, it’s that the goal should be, in my mind, to take these new technologies, which hopefully are more effective and safer in general than molecule interventions, put them in the appropriate ecosystem of other care coaching support that we’ve talked about, but basically scale them as much as possible and also make the whole thing cheaper.

And it seems to me that many of the companies in your alliance, again, are on the path saying, “if we can get this prescribed like a drug, reimbursed like a drug by the PBMs and the rest of it, our goal is to charge for this thing like a drug”. I would like drugs to be cheaper, not digital therapeutics to be more expensive. And I think when we were in Berlin, there was a lot of conversation about the European companies building digital therapeutics. So how do we get to the U.S.? Because we know that we can charge more money for our drugs there and therefore we can charge more money for digital therapeutics. Am I being unfair or is this actually the philosophy of many of your members?

Megan Coder:

I think it’s slightly unfair.

Matthew Holt:

I’m used to being very unfair, by the way, so slightly unfair is good.

Megan Coder:

I think when you’re looking at it, it’s still a notion of who’s your target audience that you’re aiming for. So by and large, digital therapeutics are not direct to consumer products. You could have a product that is a non-prescription, as we talked about products that are prescription. But by and large, we don’t see a lot of DTx products that are over the counter and the traditional way of just go ahead, download the app and use it and just the patient has a decision, because again, we’re looking at products that are for the right patient, at the right time, for the right condition, the right severity of disease state, and so forth. So there’s generally some form of authorization that goes into play here. I think maybe our views are just a little different on this one. But I think when you’re looking at who’s authorizing that if you’re going to fit into a healthcare system, you’re going to have to meet some of the requirements that they have to actually deliver therapies.

For example,  how do they get their therapies into an electronic health record? What’s the process for a P & T committee, a pharmacy and therapeutics review in the United States? What’s an HTA evaluation like in Europe? There are notions where you have to fit into some of the currently existing structure to actually fit into those models, to actually integrate into a patient’s life, depending on the type of indication and so forth you’re looking at there. So I think that is some of the component too. The discussion from my side, I haven’t heard people say, “aha, here’s how we’re going to do it”. And then do this evil laugh behind it. It’s much more of how do we actually address the patient needs? How do we actually serve the individuals who are going to be the ones to authorize this? How do we get this integrated into work flows?

And I think it’s even, Eddie Martucci from Akili has said “disrupt without interrupting”. So some notion of that idea around sometimes yes, you can break all the rules and I would love to see that happen. If you can create a new model and deliver therapies to patients in a scalable way that maybe doesn’t need all these systems, that’d be fascinating to see. But by and large, the systems exist and we have to work to some degree within some of those systems. And that I think is a component of what we’re seeing a lot of, is how do we actually work with the payer entities? How do we work with P and T committees? How do we actually get these processes adjudicated and claims done and all these things? It’s a part of therapy. So that is I think a balance. Where’s the innovation versus how do we fit within the system and where along the spectrum do different companies have to fall, or can they break the rules and will that work? And I think that’s a lot of the discussion that we’re seeing.

Matthew Holt:

You brought up Akili which is interesting because I happen to have a kid who’s not an Akili user, but could be an Akili user. But she is an ADHD patient. I mean, she’s been to therapy which is expensive and now she is on medication. Which now is generic, by the way, although it’s pretty bloody expensive medication for being generic. But it’s a $40, $50 a month medication. But when Akili comes to market with their product, they’re talking about $150 a month, which is more at the price — You can argue what it’s closer to the price of–but it’s closer to the price of a new branded prescription drug that’s unpatented rather than a generic, which should be a lot cheaper.

And it just seems to me that it’s a video game. I know there’s a ton of clinical research, and scientific, and great stuff behind it and it’s cost them a lot of money, etcetera, etcetera, etcetera. But in the end, we know that you can make video games a hell of a lot cheaper than you can make drugs because you’re they apply to millions of people and you spread the cost a lot. So there’s a lot of R&D in a standard video game made by Epic when they made Fortnite or whatever, but you spread it across a larger number of people.

I would hope that. despite all the things you mentioned, all the things that they have to deal with current efficacy and dealing with the current setup of the healthcare system as it is, in the end, if there are for instance millions of kids with ADHD untreated out there, or millions of people with depression who could use the CBT from some like an Happify Health or what have you, my sense is that they should become cheaper and more widespread. And maybe it’s not being done in a malicious or an egregious way, but it does seem to me that heading down that, “we want to be like a drug” path, which tends to make it look more like drugs in America — which are expensive. And now we’re looking for somebody, an employer or the government, to pay them rather than, “can we make something that could be spread cheaply and have the benefit of all these great technologies we’ve been developing?”

Megan Coder:

So I think the only thing I’m going to answer on that one, just because it’s not my area of expertise either to be going into all the pricing. But I think it is important to just acknowledge that we’re still early in the industry and there’s still a lot to be figured out. So what does value based contracting actually look like? What does outcomes based contracting really look like? What are all these different pricing mechanisms that different groups can use and how is that going to evolve? We’re going to see a lot of evolution because payers right now are still looking at, how do we even evaluate them? What kind of clinical evidence are we’re looking for? What are the main notions of what needs to be there before we even move forward? Much less, I don’t think we’ve hit that perfect state yet where everyone knows, “aha, this is exactly how we’re going to go about it, because now we understand this all and we understand the ecosystem.”

I think it’s the cool part of creating a new industry, but we are creating a new industry here. So that notion is still new to the different payer decision-maker entities. And that is where I think there’s still going to be a lot of development, growth and learnings along the way that I don’t think we have had all the way yet. So all that to say, I can’t speak for anyone who’s outside of the group of companies I work with. I haven’t seen malicious intent by any of them. They’re really trying and they’re really trying to make this work. That said, I think we all know that together we need to figure out the systems that will work from a value access reimbursement component. And there’s a lot to be discovered there and developed.

Matthew Holt:

Yeah. And I’d quote Brian Dolan on this. He wrote comparing the pricing of one company and it basically had a consumer product, shut it down and then made it into a product aimed for the prescription drug market and the price was 10 times what it had been as a consumer product. And when I read it, I tweeted, “this is the problem”. And he tweeted back and said, “it doesn’t mean they’re actually going to get the price that they’re looking for”. And I think, as you said, a lot of this is to be sorted out. My hope is that the companies working in the Digital Therapeutics Alliance and many others who are trying to figure out how do we use this new set of technology to really move healthcare ahead, improve the experience of patients, and doctors, and clinicians, improve outcomes and use these new tools.

And I know I and my family are potential users and I can see a lot of ways that we could get a lot better. It’s just a question that I would hope the goal is to spread this as widely as possible because in general, not just for drugs, in healthcare in America, we charge too much money and as a result we don’t get the sort of access that I think that we need to as many of the people who could use it. And I’m hopeful–I’ve been hopeful for 25 years so I’m not sure it’s ever going to really work–that the new wave of technology, whether you call it, go back to all of our definitions, digital medicine, digital health, health 2.0, whatever you want to call it, that this will enable us to distribute the ability to have better health and better health experiences to everybody more easily at a lower cost. That’s my fingers crossed type mode. I mean, I’m sure we can agree on that.

Megan Coder:

Oh, totally. I think there’s a lot of truth there. And I don’t have the numbers in front of me and actually Brian would be the perfect person, so let’s bring him to that conversation. But I think we’ve actually seen some degree of parity even between what’s taking place in Germany right now and what’s taking place in some of the aspects of the United States. So that’ll be interesting to see more of the European pricing models develop and then ideally, yes, for underserved areas that have never had access to clinical care before and parts of the world that haven’t always had access to these. Cell phones are fairly ubiquitous, there’s a lot of them out there. How can we actually start to deliver therapies? I mean, my initial background has been in global health. So those notions to me are really fascinating.

And I just, I look forward to developing more of that, whether it’s WHO’s engagement or whether it’s the world bank’s engagement, whether it’s other foundations out there. So I think there’s a lot to be had here because the notion, again, that we could actually deliver high quality therapy to patients across the world delivered an accessible way. And again, their own language and culture, that is a component. I always say like a statin doesn’t have to speak Spanish! But if you’re using this in the Spanish speaking population, you need to have it in Spanish. But there’s a lot, once you can get beyond some of those notions around data storage and so forth. I mean, the scalability notion of what digital, and digital therapies, and digital therapeutics can do is really cool to think about.

Matthew Holt:

Well, let’s leave us agreeing, which we might not have thought we were going to do. I’ve been talking to Megan Coder. She’s the executive director of the Digital Therapeutics Alliance. And Megan, thanks for your time. We look forward to continuing the conversation, but I think that was pretty interesting.

Megan Coder:

Nice to talk to you. Thanks so much.