Can Digital Therapeutics Become Profitable?

As more software-based treatments gain FDA clearance, they still face hurdles ahead in getting insurance reimbursement and garnering adoption among patients and physicians. In 2020, the Food and Drug Administration cleared Akili Interactive's video game to improve attention in kids with ADHD. It was the first time that a video game for treatment was cleared by the agency, and is one example of a digital therapeutic, a class of software-based treatments with FDA indications. 

Now, as the market is further developing, these companies have built up big ambitions. Corey McCann, the CEO of Pear Therapeutics, which has three FDA-cleared digital treatments, hopes to make them the standard of care and garner widespread insurance coverage. After going public last year, Pear aims to increase its revenue 30-fold by 2023, based on expectations that more insurers will cover its products, and more physicians will write prescriptions. However, it remains to be seen whether they will be able to achieve these goals, or sustain the costs that come with developing a new class of treatments.

While getting FDA clearance was a first step, experts identified several hurdles ahead, including getting physician uptake, building pathways to reimbursement, and importantly, developing software that patients will want to use.