Insights from Think About Digital—Digital Therapeutics Coverage Expectations Survey: Understanding Payer Perspectives on PDTs

Webinar Insights

Chris Christensen, digital market access lead at Otsuka Pharmaceutical Companies, presented the results of the Digital Therapeutics Coverage Expectations Survey on payer expectations for coverage of prescription digital therapeutics (PDTs), providing insights on their readiness, criteria for coverage, and the potential value of PDTs. These findings were presented during a recent webinar sponsored by Otsuka.

“One of our partners, the Digital Therapeutics Alliance, is focused on broadening the understanding, adoption, and integration of clinically evaluated digital therapeutics,” said Christensen. “We’re proud to partner with the DTA in our collective goal to advance understanding of digital health solutions.”  

Christensen shared that in late 2021, Otsuka began conducting a series of 4 surveys to gain insights into payers’ perspectives in the emerging digital therapeutics (DTx) market. These surveys aim to establish a factual basis for effective stakeholder communication in a dynamic industry space. The surveys will continue through the end of this year and involve 110 payer decision-makers from national, regional, pharmacy benefit managers (PBMs), and integrated delivery networks (IDNs).  

The Coverage Expectation Surveys series contain 20-questions, and focus 3 major coverage areas: 

• Demographics – to generate context via understanding payer type and respondents’ roles in product evaluation. 
• Coverage Readiness – to highlight existing payers’ processes, their use of DTx evaluation frameworks, as well as their willingness to participate in pilot programs. 
• Factors Impacting Coverage – to gain insight into payers’ current expectations of the value derived from PDTs for their organization and patients, product, and financial considerations (such as underlying data and contracting preferences), and market pressures impacting payers’ decisions. 

“Results from our first baseline survey of late 2021 cemented the need for continuous tracking in DTx,” said Christensen. “Despite limited regulatory guidance and the lack of a standardized DTx lexicon, payers nonetheless recognized the potential value of DTx, motivating them to consider coverage through various approaches.”  

Initial findings suggested that a lack of understanding regarding the FDA approval procedure and product distinctiveness led to a wide range of perceptions about the value of DTx.  

The approval from the FDA was of utmost importance when it came to determining DTx coverage and comprehension of 3 crucial aspects that contributed to the effectiveness of the product:  

• the quality and origin of supporting evidence;  
• the long-term impact on clinical outcomes; and  
• engagement of the patients. 

Early signs of DTx as an efficiency driver began to appear, with the ability to satisfy patients', prescribers', and employers' demands, as well as bringing financial and clinical benefits to the health care system. 

“In our second survey, we set out to understand the payer perspective of prescription digital therapeutics by comparing it to our first baseline survey from December 2021,” said Christensen. “We touched on the same topics as the baseline survey and questioned respondents across a wide variety of formulary coverage determination roles.”  

The second survey, known as CES 2, also contained 20 questions that focused on demographics, coverage readiness, and factors impacting coverage. Some questions remained unchanged, such as those related to demographics, organizational structure, and processes. However, researchers included an additional 2 questions about geography to replace questions regarding the number of evaluated and successfully added DTx. CES 2 collected responses from 110 individuals across 4 payer types, and all data were analyzed and presented as proportions to account for variations in group size. The sponsor's name was not disclosed to the respondents. 

Christensen noted that the forward-looking nature of the questions, the required decision-maker status, and complexity of the payer market did introduce 3 major limitations that may impact the final insights.  

Limitations include: 

• Sampling bias - sampling bias, particularly self-selection, was included as respondents were chosen from a pre-verified list of payer decision-makers but final survey inclusion relied on respondents’ supplied titles.  
• Overconfidence bias - overconfidence bias was noted due to respondents’ high professional experience level, relatively short average time spent on providing answers, and high product variability.  
• Social desirability bias - social desirability bias was acknowledged as few of the survey questions asked the participants to respond based on their role in the organization or understanding of a particular item, which the participants may have overestimated to look more knowledgeable.  
• Survey insights were recommended to be considered strictly directional. 

“Due to new product launches, increased manufacturer-sponsored campaigns, and the introduction of PDT-focused legislation, clarity surrounding the FDA authorization for SaMDs and the differentiation among digital products has nearly tripled for payers in the last 12 months,” said Christensen.  

In 2022, payers spent approximately 12% of their working hours on DTx, with minimal variation among payer types. This is a significant shift from the end of 2021 when PBMs dedicated 14% more time to DTx compared to other payers. The market for DTx continues to grow, prompting payers to prioritize the evaluation of these products. Out of the respondents surveyed payers added 21% of evaluated products to their formularies. While regional plans evaluated the highest number of DTx, their adoption rate was only 25%. Material changes occurred in gastroenterology, musculoskeletal, and oncology, resulting in reduced coverage by payers in these areas. However, payers widely embraced DTx products in cardiology and diabetes and increased coverage for mental health and respiratory products. 

“The lessened urgency to cover DTx products in cardiology and diabetes indicated that payers may have found solutions in these areas and have shifted focus to address the unmet needs in other disease states,” said Christensen.  

Surveyed payers increasingly embraced established frameworks, such as those proposed by industry stakeholders like the Digital Therapeutics Alliance, for DTx evaluation, while regional payers, with higher pilot program capabilities, have utilized their self-developed evaluation frameworks at a greater rate. 

Securing coverage may be facilitated by implementing pilot programs. More than half of the respondents' organizations were willing to collaborate with digital manufacturers on pilot programs for PDTs. Among regional payers, 64% had well-defined pilot opportunities, and 18% offered pathways for pilot programs to eventually receive coverage. Real-world evidence obtained from pilot programs can offer patient perspectives and crucial context to support payers in making coverage determinations for PDT. Payers also emphasized the importance of data from these programs, whether they were conducted internally or by competitors or external plans, as it reflects real-world experiences of the product. 

“PDTs differ from conventional therapies by offering unique benefits, such as patient accessibility to care irrespective of location and generation of real-world data. These features can potentially translate to improved access for larger patient populations while improving payers’ performance,” said Christensen. “Data suggests that payers’ perceived value of digital solutions continued to increase as they learned more about them.”  

Payers acknowledged the benefits of PDTs for patients, including decreased societal stigma and improved treatment adherence. They also recognized the potential for better HCP-patient communication and increased treatment satisfaction, reducing hospital care utilization. However, all-payer organizations agreed that higher levels of evidence and FDA authorization would be necessary before considering coverage of PDTs.  

In the competitive payer market, payers may view innovative contracting options as favorable due to the availability of detailed treatment data. National plans and PBMs prioritize value-based contracts, while IDNs prefer rebates. Regional plans prioritize rebates, as well but to a lesser extent, indicating employer demands as the top priority for most respondents, followed by patient demand. 

“Manufacturer-sponsored initiatives were weighted relatively evenly amongst payers with dedicated patient support ranked most often as number one,” said Christensen. “However, 3 in 4 payer types would place a higher value on combined manufacturer-sponsored provider assistance and patient education.”  

Key insights from CES 2 framed the design of later surveys, demonstrating that payers gained a better understanding of the distinctions between DTx and PDTs and that increasingly available research positively impacts respondents’ perceived value of PDTs. The level of evidence required for coverage determination was also directly related to the type of product and how it is used for therapy.  

Patients average perceived usefulness of PDTs increased in higher treatment satisfaction, treatment adherence, and lessening societal stigma. Christensen also noted that innovative contracts, like value-based contracts and alternative payment models, have increased in importance for many payers.  

“The DTx market is continuing to grow, with payers directing their attention towards addressing chronic conditions and continuing to invest in the space,” said Christensen. 

So far, the Coverage Expectations Survey series has established dedicated review committees for DTx and engaged experts from various fields in the review process. There is a demonstrated willingness among payers to collaborate with manufacturers for pilot programs and recognize the potential of digital solutions in enhancing clinical outcomes. There is also an increased interest in patient engagement and a shift towards innovative contracting for digital therapeutics, with less emphasis on cost offsets. 

Christensen closed by sharing that Otsuka is developing the final survey of the Coverage Expectations Survey series, which will present the 24-month summary of coverage expectations within DTx.  

Reference  

Otsuka America Pharmaceutical, Inc. Think About Digital—Digital Therapeutics Coverage Expectations Survey. October 10, 2023.