COVID-19 Sparks New Opportunities for Digital Health Companies

Clinicians and regulators are rethinking how healthcare is provided amid precautions prompted by COVID-19. In-person physician visits don’t fit within the physical distancing guidelines that are now the new normal. New technology presents alternatives.

As a digital therapeutics startup, Akili Interactive finds itself thrust in the midst of these changes. The Boston company has developed video game that treats attention deficit hyperactivity disorder (ADHD) by helping children learn how to focus on multiple tasks.

The FDA is still reviewing the game as a potential prescription ADHD therapy. But as the COVID-19 outbreak spread, the regulator issued new guidance last month supporting the use of digital devices for treating psychiatric disorders. Based on that guidance, Akili’s made its experimental game Endeavor available to families who have children diagnosed with ADHD. Software has long been a part of healthcare. But only recently have digital technologies emerged as therapeutic options in their own right, according to Akili CEO Eddie Martucci.

“It’s no longer an on the sidelines, supportive technology,” he said. “It’s playing a critical role.”

Martucci was one of the speakers featured in a session at Xconomy’s Xcelerating Life Sciences Boston event earlier this month, the second in the 2020 series. He appeared on a panel about the convergence of medical technology and pharmaceuticals, joined by Naomi Fried, CEO and founder of advisory firm Health Innovation Strategies, and Emir Roach, head of emerging technologies and data at Takeda Pharmaceutical (NYSE: TAK).

Digital technologies bring new capabilities to pharmaceutical companies, Fried said. Sales and marketing technologies used by those firms offer new ways to promote drugs. Other opportunities include consumer-facing tools that aid clinical trial recruitment or provide patients with information about how to take their medicines. Patient demand is driving the rapid development of more telehealth options, prompting physicians and payers to come around. “I think the telehealth genie is out of the bottle,” Fried added. said. “Let’s hope it stays there.”

Roach said the COVID-19 pandemic has spurred conversations with startups developing new digital technologies, including tools to support clinical trial recruitment and patient engagement. But he advises startup founders to consider the bigger picture when pitching their service or product.

“From my perspective, if a company is coming to us as a pharma solution, it is less compelling than one that fits with the entire healthcare ecosystem,” he said.

From a regulatory standpoint, digital technologies sit somewhere between medical devices and pharmaceuticals—a relatively undefined regulatory pathway. Fried said a company developing a consumer-facing technology may not need to worry about seeking regulators’ approval before heading to the market. But if a startup’s technology could have a therapeutic application, she advises founders to conduct clinical studies. The FDA’s blessing on a device or “digiceutical,” as digital therapeutic products are also called, will support a company’s efforts to commercialize a technology and win payer reimbursement for it, Fried said.

Reimbursement remains one area where digital technologies lag traditional medicines. Some insurance companies are starting to show openness to covering digital therapies, Martucci said. COVID-19 has catalyzed those discussions, as the pandemic underscores the need for remote treatments to complement drugs and, in some cases, replace them.

“I truly believe that if digital technologies have a clinical impact, they should be treated like any other medicine,” Martucci said.

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