1.
Overcoming
Barriers to Scale
in Digital Therapeutics
@cwhogg
Chris Hogg
Chief Commercial Officer

2.
Digital transformation
is coming to healthcare

3.
Healthcare transformation is inevitable, just slow
Source: McKinsey and Co.
@cwhogg

4.
Pharmaceuticals: Traditional medicines → Digital therapeutics
For us this means the rise of digital therapeutics
@cwhogg

5.
We have overcome many barriers thus far in the
development of DTx
Can we make a
tech product that
positively impacts
important clinical
outcomes?
Can we prove
outcomes in RCTs
and real-world
clinical programs?
Can we
successfully run
pilots with leading
healthcare
organizations?
Can we scale
within leading
healthcare
organizations?
Can we achieve
ubiquitous
payment /
reimbursement?
Can we own
financial and
clinical risk?
We are here
$
@cwhogg

6.
We have generated significant evidence DTx work
@cwhogg

7.
0.1% - 0.2% patient share
Yet, even the leading companies have tiny patient shares
>250,000
patients
208,000
patients
>100,000
patients
Diabetes
30M
Pre-
diabetes
84M
High blood
pressure
78M
High
cholesterol
78M
Asthma
25M
COPD
16M
@cwhogg

8.
While belief in the market is high, nothing has scaled
The main question remains:
Why hasn’t
it scaled?
Patients, Providers, Payers and Pharma now see DTx as an inevitable part of the
future of disease management.
@cwhogg

9.
Historically, digital health companies have used 3 primary commercial models,
each with unique barriers and challenges
What are the barriers? It depends on the path...
Direct to Patient (DTP) Employer/Payer to Patient Provider to Patient
1 2 3
@cwhogg

10.
Direct to patient (DTP)
Optional
Patient marketed
to online
Patient enrolls and devices
shipped to patient’s home
(if needed)
Patient uses
DTx
Key Learnings/Blocks:
● Possible to enroll a lot of people, quickly
● Patients pay for wellness and vanity but don’t (yet) pay for ‘clinical’
● Monetization of these patients via other channels is challenging
Optional: Patient is
monitored by company
care managers
1
@cwhogg

11.
Digital health is littered with DTC failures (and pivots)
@cwhogg

12.
We may be getting closer to patient pay for clinical use cases
@cwhogg

13.
Employer/Payer to patient
Key Learnings/Blocks:
● If enrolling from payer list to member, you need high conversion and retention
● Most successful companies here are full stack service providers
○ Provides enabling services, not just tech
○ Allows billing as in-network provider (service, not a product)
Employer/Payer creates
list of eligible members
DTx/Payer markets directly
to members and ships
hardware to patient’s home
Patient uses DTx and is
monitored by care
managers
2
@cwhogg

14.
Going around the current doctor / patient relationship
Company sells
directly to employer
or payer
Market to
members from list
Member uses
product and
benefits
Member has
access to clinical
services
Process goes around
current doctor/patient
relationship
@cwhogg
Data back to
employer/payer

15.
Most successful companies in this approach look more like providers than DTx. Companies with
most traction in this case are in diabetes, pre-diabetes and mental health, and include coaches,
therapists and physicians.
DTx or Provider 2.0?
@cwhogg

16.
Provider to patient
Key Learnings/Blocks:
1. If you want providers to be your referal channel, you need universal reimbursement
a. Reimbursement for product and provider time
b. Reimbursement for VBC and FFS patients
2. No current clinical workflows to order/prescribe and monitor
Physician identifies
patient and
prescribes DTx
Patient uses
DTx
Clinic staff creates account or
patient self-enrolls
Optional
Patient is optionally
monitored by care
managers
3
@cwhogg

17.
Who else uses this provider-directed approach? Basically, everyone….
@cwhogg

18.
Providers must be incentivized to change workflow
Today the majority of providers are practicing in a ‘mixed risk’ environment. They are at risk for some
outcomes, with some of their patients. Additionally most providers do not want to treat patients differently
based on payer status.
Financially at risk (VBC) Fee-for-Service (FFS)
Clinicians need coverage for their entire population:
1) Coverage for product/service
2) Payment for clinician time
Physician might be motivated Physician not motivated without traditional coverage@cwhogg

19.
Even with incentives, we must make it simple for providers to use DTx
@cwhogg
“And this is where our clinical workflow redesign team went insane”

20.
When a new
medicine is
approved, the
system just works
1. Medicine approved
(1)
@cwhogg

21.
When a new
medicine is
approved, the
system just works
1. Medicine approved
2. Medicine gets unique
identifier code
(1) (2)
Unique
Identifier
@cwhogg

22.
When a new
medicine is
approved, the
system just works
1. Medicine approved
2. Medicine gets unique identifier
code
3. Medicine shows up in EMR
eRx flow
(1) (2)
(3)
Unique
Identifier
@cwhogg

23.
When a new
medicine is
approved, the
system just works
1. Medicine approved
2. Medicine gets unique identifier
code
3. Medicine shows up in EMR
eRx flow
4. Doctor knows where to find
it and Rx it
(1) (2)
(3)
(4)
Unique
Identifier
@cwhogg

24.
When a new
medicine is
approved, the
system just works
1. Medicine approved
2. Medicine gets unique identifier
code
3. Medicine shows up in EMR eRx
flow
4. Doctor knows where to find it
and Rx it
5. Rx magically goes to
pharmacy
(1) (2)
(3)
(4)
(5)
Unique
Identifier
@cwhogg

25.
When a new
medicine is
approved, the
system just works
1. Medicine approved
2. Medicine gets unique identifier
code
3. Medicine shows up in EMR
eRx flow
4. Doctor knows where to find it
and Rx it
5. Rx magically goes to pharmacy
6. Wholesalers get medicine to
pharmacies
(1) (2)
(3)
(4)
(5)
(6)
Unique
Identifier
@cwhogg

26.
When a new
medicine is
approved, the
system just works
1. Medicine approved
2. Medicine gets unique identifier
code
3. Medicine shows up in EMR
eRx flow
4. Doctor knows where to find it
and Rx it
5. Rx magically goes to pharmacy
6. Wholesalers get medicine to
pharmacies
7. Patient knows to pick up
medicine at pharmacy
(1) (2)
(3)
(4)
(5)
(6)
Unique
Identifier
(7)
@cwhogg

27.
When a new
medicine is
approved, the
system just works
1. Medicine approved
2. Medicine gets unique identifier
code
3. Medicine shows up in EMR
eRx flow
4. Doctor knows where to find it
and Rx it
5. Rx magically goes to pharmacy
6. Wholesalers get medicine to
pharmacies
7. Patient knows to pick up
medicine at pharmacy
8. Manufacturer gets paid
(1) (2)
(3)
(4)
(5)
(6)
Unique
Identifier
(7)
$$
(8)

28.
When a new digital therapeutic is cleared,
nothing works
Unique
Identifie
r
(1) (2)
(3)
(4)
(5)(6)
1. DTx approved/cleared
2. DTx does not get unique
identifier code
3. DTx does not show up in the
EMR (anywhere)
4. Doc does not know where to
find it and Rx it
5. New: Patient needs to
create account
6. New: Patient has to get kit
individually fulfilled and set
up
7. Manufacturer does not
get paid
@cwhogg

29.
Then data from these DTx must get back to providers
We must close the loop. Data from DTx are valuable to prioritize outreach, make
medication changes and improve quality of in-person visits.
@cwhogg

30.
DTx data allow stratification based on need
With DTx data, providers and health systems can more efficiently and effectively
allocate scarce resources
@cwhogg

31.
We are building new rails one step at a time
@cwhogg

32.
Time for optimism: What is changing?
1. Product Evolution
2. Infrastructure
3. Reimbursement
@cwhogg

33.
Making DTx look
more like a drug
We are beginning to make DTx
products look more like today’s
medicines, and are helping them
find their proper places in
treatment algorithms
Teva’s Digihaler
@cwhogg

34.
We are building more complete solutions
We are learning how to build complete solutions that fill needed gaps, and that
integrate into the healthcare system and workflows
From App to
Complete
Solution
@cwhogg

35.
We are building new distribution infrastructure
New products, services and capabilities are making it easier for physicians to order connected
medicines, get patients enrolled and get data back into the physician’s EMR.
Lobbying for
drug-like IDs to
include in eRx lists
New tools to order DTx
products from the EMR
Health Systems are
investing in infrastructure
The ability to integrate
seamlessly into multiple
EMRs is getting easier
Unique
Identifier
@cwhogg

36.
We are establishing payment and reimbursement
Advances in US and global payer policies point to clear progress in adding DTx to traditional
healthcare payment models.
PBM benefit
Reimbursement
Medical benefit
Reimbursement (RPM)
Ex-US
Reimbursement
January 2019
CPT 99453
One time setup
CPT 99454
Device/service
CPT 99457
Physician interpretation
May 2019
ES announced plans to
launch first ‘digital
formulary’ in 2020
June 2019
CVS Caremark followed
suit with similar
announcement
2017
UK’s NHS has been
reimbursing for select
tools since 2017.
November 2019
The German Parliament
passed the Digital
Supply Law
@cwhogg

37.
Patients will have more therapy options, will get to the best
therapy regimen faster, and have better control of their health.
Physicians will have more therapy options, and care teams
will have better data on how patients are doing.
Payers and hospitals will lower utilization and costs, and have data
on which therapies are most useful in which patient groups.
Lack of current scale is not due to lack of underlying
value proposition
With DTx:
@cwhogg

38.
Digital therapeutics represent the next era of
development in medicine
@cwhogg

39.
With digital therapeutics, we will finally be
able to deliver on the main promise
of digital health
The ability to deliver...
...the right intervention
...to the right patient
...at the right time.
@cwhogg

40.
Overcoming Barriers to Scale
in Digital Therapeutics
@cwhogg

41.
Q&A
@cwhogg