Why it’s notable:
Pear Therapeutics (‘Pear’) has some of the strongest clinical evidence of any PDT company. Notably, its FDA approved solutions, reSET for substance use disorder (SUD), reSET-O for opioid use disorder (OUD) and Somryst for chronic insomnia, have demonstrated their ability to significantly improve outcomes through a multitude of clinical studies as well as several randomised controlled trials. Furthermore, the company has built upon this with real-world studies, showing that its products can improve clinical outcomes, and that patients and clinicians are willing to engage with its PDTs.
Pear also worked hard to build a customer base, partnering with some of the largest addiction treatment systems in the U.S, as well as securing reimbursement of its products among payers, notably several state Medicaid programs. However, the inability to secure widespread reimbursement has stalled the company's revenue growth. Only half of the prescriptions issued for Pear’s solutions were actually covered by insurance, the high cost of the solutions understandably acting as a barrier to adoption for those not covered by payers.
Industry implications:
Pear managed to navigate an extremely complex reimbursement process, securing coverage from State Medicaid programs, as well as pharmacy benefits. Having threaded the path for others to follow, PDT companies will need to continue to produce the clinical and health economic evidence necessary to convince payers of the benefits of reimbursing these solutions.
Demonstrating cost effectiveness will be key for DTx companies going forward. Strong clinical evidence is a necessity, however, this alone is not enough. DTx companies will need to learn how to navigate value-based contracting, with strong health economic data showing the direct benefits to payers, especially when compared to less expensive treatment options. Greater evidence of a willingness of providers' to adopt the solution in practice is required and can indicate the market value of the solution for payers.
Some of Pear’s problems may have been unique to its products and target market. Pear chose challenging therapeutic areas to operate in. Clinical guidelines suggest a multi-modal approach for treatment of OUD and SUD, reSET and reSET-O followed this path, with their intended use as an adjunct to contingency management and medication treatment in some cases. This may have created a challenge for PDT solutions in this setting, making them more of an addition to existing therapy, rather than a necessary treatment option. A recent article summarised that DTx companies that exist in a less complex setting, where they may be used as a monotherapy with less need to integrate with other forms of care, may be more likely to succeed.
Pear was a pioneer for the industry, blazing a trail for digital therapeutics companies to follow. Pear’s fate can be explained by a multitude of contributing factors, and does not signal the end of digital health. Innovation in healthcare is a long game, and DTx companies will succeed at a pace consistent with how the environment matures.