Understanding Prescription Digital Therapeutics From the Payer Perspective

A panel of professionals at Asembia’s AXS23 Summit led a session concerning current payer attitudes, perceptions, and policies regarding prescription digital therapeutics (PDTs) as reported in a recent survey. Potential barriers to the adoption and use of PDTs were also explored, along with an explanation of PDT evaluation and coverage requirements and strategies that will support PDT market access moving forward.

Diane Giaquinta, PharmD, FAMCP, VP Market Access Research, Ashfield Engage, led the talk by reviewing the results of a recently conducted survey that gathered data from payers about PDTs. 

Dr Giaquinta defined PDTs as being a subset of digital therapeutics (DTx). The key difference outlined was that PDTs require US Food and Drug Administration (FDA) clearance to enter the market and a prescription from a health care provider for patient use, whereas DTx require neither. 

PDTs were further defined as evidence-based clinical interventions that are delivered via software and aim to treat, manage, or prevent medical conditions or diseases. Like medical devices, PDTs must gain market clearance from the FDA and require a demonstration of efficacy and safety in clinical trials. PDTs may be used as a standalone treatment or in combination with other drugs or devices. 

Dr Giaquinta explained that PDTs are categorized as medical devices in one of three classes of risk classification. Class I are low risk of illness or injury associated with medical device use, such as bandages and surgical masks. Class II are moderate risk of illness or injury, such as syringes and catheters. Class III are high risk because they are involved in supporting life or preserving health, such as pacemakers and defibrillators. 

Nearly all currently marketed PDTs are classified as Class II medical devices, said the speakers. Because of this, PDTs can only gain FDA clearance through one of two regulatory pathways. If the PDT is substantially equivalent to a predicate device on the market, it may qualify for a 510(k) clearance pathway. If not, it should be on the De Novo Clearance pathway. 

The speakers shared a list of the 20 PDTs currently marketed in the United States that are cleared by the FDA. 

“You'll see only 9 of them went through the De Novo pathway,” said Dr Giaquinta. “So that means that a significant amount of other devices that are coming to the market went through the 510(k) pathway.”

A main challenge outlined for PDTs that prevent their universal adoption is the ambiguity as to what constitutes a PDT vs a DTx and coverage uncertainty. 

“One of the things I found interesting when I was going through the process is, other than the payers who are evaluating it and the prescription digital therapeutic manufacturers, there’s not a real broad ground for coverage of these,” said Dr Giaquinta. 

Other challenges to universal adoption shared were a lack of a clear reimbursement pathways; that FDA clearance has a lower evidence bar than FDA approval; a need for defined prescribing pathways and better interface with physician prescribing systems; concerns over data privacy; and that the financial instability of PDT manufacturers allows for limited sales and marketing support. 

“No one is largely championing this today; that's why I think it's important for you to hear what the payers think, what the PBMs and the regional health plans think, and why are they interested in looking at these,” said Dr Giaquinta. “And then once they decide they want to cover them, are they a medical device? Are they a drug? Do they fit under the medical benefit or the pharmacy benefit? Do you pay a copay? Do you pay co-insurance?”

The lack of a clear reimbursement pathway is due in part to there being only one Level II Healthcare Common Procedure Coding System (HCPCS) code (A9291), which makes PDTs difficult to adjudicate and track, explained Dr Giaquinta. Since PDTs of varying costs and indications are all billed under A9291, it requires manual adjudication rather than automatic claims processing. 

A proposed bill, the Access to Prescription Digital Therapeutics Act of 2023, could help gather champions for PDT adoption. It was introduced to the US Congress in March 2023 to help facilitate PDT coverage. 

“It is meant to get CMS to consider this as an approvable therapy to be covered by Medicare and Medicaid, as well as to establish some sort of payment methodologies and expand on the symbolic code,” said Dr Giaquinta. 

In addition, the Ashfield Market Access Prescription Digital Therapeutics Survey, which concluded in September 2022, provided a snapshot of how some large national and regional payers were thinking about coverage of PDTs for their organization. The survey had broad market representation covering all payer model types.

“What this [survey] shows is a big picture of what the larger payers that represent most memberships in managed care are thinking about PDTs,” said Dr Giaquinta. 

The survey found that approximately half of all commercial payers interviewed cover one or more PDTs either directly or with a rider. However, the coverage by Medicare or Medicaid payers is significantly lower, with about 25% providing coverage. Currently, 40% of all payers report covering at least one PDT, and it is projected that by the end of 2023, this number will increase to 60%.

The survey further highlighted a lack of consensus regarding whether PDTs should be covered under the pharmacy benefit, medical benefit, or both, and what a patient's financial responsibility for PDTs should be. In addition, the majority of surveyed payers expressed the need to evaluate PDTs through a combination of reviews conducted by the Pharmacy and Therapeutics (P&T) Committee and the Medical Policy Committee, typically on a quarterly basis.

Approximately two-thirds of payers who plan to cover PDTs prefer to see their use in combination with other treatment modalities such as pharmacotherapy or supplemental behavioral health treatments. Additionally, 92% of all payers indicated that some form of prior authorization would likely be required, although the extent of the authorization process would vary depending on the specific PDT. 

The survey brought to light the key drivers for PDT coverage across all payer types. The most important factors influencing coverage decisions were the demonstration of efficacy in clinical trials, FDA clearance, and the cost per treatment episode. Among the surveyed payers, the most frequently mentioned PDTs that were covered included reSET and reSET-O, which received FDA clearance in 2017 and 2018, respectively. They were followed by Nightware and Luminopia One.

In terms of engagement with payers, Akili (Endeavor Rx) and Pear Therapeutics (reset and reSET-O) were reported to have approached the largest number of payers who participated in the survey. Freespira, Endeavor Rx, Luminopia One, and RelieVRx were the most frequently mentioned PDTs for positive coverage consideration.

Although some of the payers may have pilot programs for certain PDTs, most of them did not list these therapies on their prescription formulary. Interestingly, the availability of a single HCPCS billing code did not have a significant influence on coverage policies for 56% of all surveyed payers. However, 40% of payers expressed a greater willingness to cover PDTs if unique HCPCS codes were available for each therapy.

Notably, the survey findings suggest that factors such as the length of treatment, ease of use, and availability of cost-effectiveness data play only a modest role in determining PDT coverage across all payer types. Similarly, the ability of a PDT to improve patients' disease awareness, existence of pilot programs, and collection of patient-reported outcomes data have limited impact on coverage decisions made by payers.

In closing, the speakers identified coverage, clinical evaluation, and operational requirements as the most important future factors that might influence the adoption of PDTs by payers as a covered benefit.