Is FDA Approval the Secret to Digital Health Application Success?

Written by George McLaughlin on Feb 2, 2017 9:40:01 AM

From day one, Redox has been passionate about supporting the “little guys”. So much of what we do is purposefully designed to allow anyone with a great idea or product to penetrate the healthcare market and deliver beneficial solutions to patients and providers.

What we’ve seen over the years is the consistent difficulty smaller companies face getting their product off the ground. Selling into a health system is hard; selling into a health system as a startup is nearly impossible. So, what's a group to do?

Well, Pear Therapeutics might be paving the way for the future of how digital health solutions are brought to market. It isn’t the easiest approach (hell, it might be the most difficult and most costly), but it has promising potential to change how digital health applications are vetted.

The startup Pear, who describe themselves as a “prescription digital therapeutics company”, have their products go through FDA approval before releasing them to market. They recently completed an extensive series of clinical trials and are expecting FDA approval of their first product, Reset (a digital therapeutic for substance use disorder), early this year.

Why is this important? Well, by going through this more lengthy and arduous process, they've actually defined a payment model for their solution: since it's been proven in clinical trials and approved by the FDA, the solution is eligible for traditional insurance reimbursement.

This is a really big deal! So many digital health applications build solutions targeting specific provider or patient populations but never identify a viable business model. This is a shame in many ways, but instead of falling victim to this issue, Pear is defining a path that may allow the true “prescription” and reimbursement of digital health solutions.

So many digital health applications are selling benefits they can’t truly back up, which makes purchasing them difficult for health systems. This type of more rigorous proof-of-validity and vetting process offers an interesting and exciting look at a potentially more reliable path to digital health marketization. This model allows health system decision makers to act with much greater certainty since the solution has been approved by a governing body they trust.

By targeting diseases, Pear is offering digital solutions that match up directly and fare better than existing solutions on the market. Whether face-to-face therapy or prescribed pharmaceuticals, Pear is able to say their solution outperformed both in an agreed upon setting and was approved by the FDA.

Currently, gaining FDA approval can take years and millions of dollars, resources most digital health startups simply don't have access to. In some ways, this process might stifle innovation in healthcare, but in others, it adds a much-needed vetting mechanism to a field that is entirely too noisy. The FDA is already the approval body that health systems trust for pharmaceuticals and medical devices—what makes digital health applications any different?

Later this year, Pear expects to be granted FDA approval and will tout their solution as the first FDA approved "digital therapy". Is this one organization's strategic differentiator, or is this the future of how digital health applications go to market?

We'll be keeping an eye on how things develop, but if their recent funding is any indication, Pear may be on to something.

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George McLaughlin

Written by George McLaughlin

George serves as Redox's creative director which means he writes a lot and comes up with whacky ideas in meetings.

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