By Eva Marchese, Lev Gerlovin, Lorenzo D’Angelo, and Anthony Barron, Life Sciences Practice, CRA
The use of digital health technologies (DHTs), ranging from devices and apps to cloud-based services and artificial intelligence platforms, has accelerated rapidly in recent years, especially in response to the COVID-19 pandemic. Other factors that have played a role in the growth of the digital health sector include an increased incidence of non-communicable diseases and the more proactive role many patients are taking in their disease management. There are also advantages that DHTs present for payers and manufacturers, allowing them to track patient outcomes and treatment compliance better, faster, and more accurately and support wider adoption of value-based healthcare models.
But as progress in the sector continues, there are also several barriers hindering innovation and adoption of DHTs, including issues in funding. For many DHTs, there are no established access pathways or value assessment processes, meaning there is often no clear route to market and manufacturers may face challenges in securing adoption as a result. In addition to funding, manufacturers may also face issues related to development processes, regulatory authorization, and value assessments of products, given that there are currently limited requirements or standards for these areas.
Our life sciences team at CRA conducted a recent analysis to better understand the major challenges limiting innovation in digital health and how manufacturers might be able to encourage faster access and reimbursement of DHTs in the future. We found that regulatory and access challenges are the most common that manufacturers must work to address on the path toward market approval.
Lack Of Standard Value Assessment Criteria
In the DHT sector, new standards for value assessments of products need to be developed and implemented as there is a lack of consensus on what defines value and evidence requirements supporting use of these technologies. While DHTs can provide support in a range of areas for several stakeholder groups, including helping patients monitor their conditions and adhere to treatment protocols and allowing clinicians to collect more precise information on patient compliance and drug response, manufacturers often find it difficult to quantify these benefits for payers to secure reimbursement.
Uncertainty about payer evidence requirements for DHTs is ultimately due to the lack of transparent and systematic value assessment or health technology assessment (HTA) frameworks. Existing HTA frameworks developed for drugs are generally not workable for digital devices and technologies.
Several countries are moving toward more standardized value assessment frameworks, but each is progressing at its own pace. In the U.S., the FDA established a Digital Health Center of Excellence to advise manufacturers of DHTs, including providing best practices to help them quickly advance products in development. In Europe, while progress is slower in countries such as Italy, important strides are being made in others such as Germany, where government agencies created the Digital Healthcare Act and implemented a structured HTA process for digital apps for the diagnosis, treatment, and monitoring of different diseases in 2020 (Editor’s Note: Read more about that here). Under this new process, apps are included in a public list for reimbursement after HTA bodies review supporting evidence and if comparative clinical trial data are available. Conditional reimbursement is also available for apps where comparative trials still need to be developed; the HTA forms the basis of price negotiations, which occurs within a year. In countries with some regional autonomy and without an overarching national value assessment approach, interim solutions are emerging, including the establishment of regional assessments of apps or the adoption of regional level approaches on the national level.
As value assessments of DHTs become more standardized and transparent, the process will become easier to navigate. Manufacturers and payers will likely need to cooperate to develop a standardized, objective, rigorous, and transparent process outlining what evidence should be submitted and how it needs to be collected, depending on the indication and a DHT’s target.
Limited Supporting Evidence At Launch
In many cases, DHTs should achieve reimbursement largely because they demonstrate that they can lead to quality patient outcomes rather than meeting evidence-based standards. HTA bodies generally require that technologies be supported by data from robust randomized controlled trials (RCTs). However, for many DHTs, data from RCTs is often limited or unavailable at the time of launch, given that much data supporting their use is collected during treatment based on real-world use. Adopting an assessment framework based on an expectation of data from multiple RCTs being available at the time of launch creates access challenges for many DHT manufacturers.
The general lack of confidence in clinical data at launch reduces the potential for reimbursement or coverage by public or private insurance and leads to payer reluctance to provide additional budget and higher price points for DHTs. Consequently, DHT manufacturers should work with payers and other industry stakeholders such as clinicians to understand the best indication-specific approach to generate value evidence at launch or in the real-world setting.
Need For Dedicated Funding And Reimbursement Pathways
To address the lack of dedicated funding and reimbursement pathways for DHTs there have been recent efforts to integrate these technologies into global markets, resulting in individual payer initiatives in the U.S. and a mix of nationally run access schemes and regionally funded programs in Europe. Market access and reimbursement often vary by private and government payers within each country, depending on the healthcare landscape. Each payer likely has its own guidelines for DHT adoption. In cases where there is no definitive funding policy, public and private insurers generally reimburse for DHTs only when there is a strong rationale for their use.
Despite the interest in emerging and innovative DHTs, uptake has been slow. But with recent approvals and reimbursement of DHTs, some private insurers and hospitals indicate that they are willing to reimburse digital health apps, devices, and platforms when they sufficiently demonstrate value. From a public health perspective, standardized reimbursement and funding pathways for DHTs need to be created to encourage the development and appropriate use of these technologic advances.
Strategies For Manufacturers To Consider
While new methods for value assessment have been designed and tailored to support the evaluation of drugs, they unfortunately cannot support the evaluation of DHTs. Some countries, including the U.S., are making progress in the development of new HTA frameworks, but there is still a long way to go for market access pathways to become easier to navigate for DHT manufacturers. Uncertainty remains regarding optimal clinical trial designs, especially to support evidence requirements, payer value drivers, and reimbursement options.
Resolving these challenges will require stakeholders, primarily manufacturers and payers, to align on the optimal approach for capturing the value of DHTs in a constantly changing landscape to ensure important innovations reach patients and support their care. While more work needs to be done, there are some strategies that manufacturers may consider to boost the value perception of DHTs and mitigate possible objections.
- Identify key influential stakeholders and engage with them early on. Engagement with medical/scientific stakeholders, payers, and policymakers will help drive consensus on the value of DHTs in a specific indication and what endpoints can effectively measure this value. Stakeholder engagement will also help find advocates of DHTs to increase the likelihood of quick adoption. We recommend starting discussions with these stakeholders as early as possible in the development process.
- Develop a robust evidence program. Once it becomes clearer what the indication and payer specific evidence guidance is, this should inform the development of studies and analyses aimed at providing the required evidence to ensure the best possible reimbursement for a DHT. Typically, evidence is required on how a DHT improves patient outcomes or can lead to cost savings or efficiency improvements in the healthcare system.
- Explore and evaluate all reimbursement routes. In many markets, reimbursement routes for DHTs are still in development. There might be a new dedicated pathway for DHTs, or an established medical device reimbursement pathway might be the best option. In some cases, central or regional/local pathways or dedicated innovation pathways might be the best approach. It is also important to consider all aspects of the implementation of a DHT that could require reimbursement. For example, manufacturers should consider not only the cost of a DHT itself but also the time that physicians might need to spend to set the DHT up or interpret its output, if applicable.
- Seek and consider partnering opportunities. To create and test DHTs during early stages of development, DHT manufacturers might consider forming partnerships with institutions interested in the use of their technology or offering it to their patients. Pharmaceutical manufacturers might also potentially be interested in using the DHT or in a partnership. For example, a DHT might be able to help track patient outcomes in a drug study or it could be an interesting add-on or offering for patients receiving a pharmaceutical company’s medication.
About The Authors:
Eva Marchese is a vice president in the Life Sciences Practice of CRA, based in London. Dr. Marchese has an extensive consulting background with a focus on advising pharmaceutical, and medical device companies on global pricing and market access.
Lev Gerlovin is a vice president in the Life Sciences Practice of CRA, based in Boston. Mr. Gerlovin has over 20 years of consulting experience, most of it supporting life sciences companies on commercial and market access strategy issues.
Lorenzo D’Angelo is a principal in the Life Sciences Practice of CRA, based in Munich. Dr. D’Angelo is an experienced consultant helping global pharmaceutical and medical device companies with their commercial strategies.
Anthony Barron is a principal in the Life Sciences Practice of CRA, based in Brussels. He has been working on European and international policy issues for more than 10 years and regularly advises clients on health financing and market access policy issues.
The views expressed herein are the authors’ and not those of Charles River Associates (CRA) or any of the organizations with which the authors are affiliated.