Health apps by prescription: the need for a common European approach
Startups are some of the leading innovators behind the emerging digital therapeutics market. As conversations around reimbursement pathways and prescriptions of digital therapeutics are starting to take place, we advocate a coordinated approach at the EU level.
Digital therapeutics, evidence-based therapeutic interventions driven by software, is a rapidly growing subset of digital health. Its global market size is expected to reach €11.43 billion by 2027, up from €2.39 billion in 2019. Startups are developing some of the leading products in the field, enabling medical professionals to complement traditional therapies with evidence-based digital apps. The adoption of digital therapeutics brings benefits to a variety of medical fields: from improving the quality of life of people living with chronic diseases to treating mental health conditions.
However, startup founders face a lengthy and resource-demanding process in bringing their products to life. As digital therapeutics products are held to the same standards of evidence as traditional treatments, they must demonstrate safety, efficacy and clinical impact. This process requires clinical trials and certifications. But the biggest challenge is the lack of standardised pathway to the reimbursement and prescription of digital therapeutics apps. It is a key barrier to its wider adoption across health care systems in Europe, where publicly funded health care systems are the norm. In most cases, innovators have to navigate complicated funding pathways at national, regional or even hospital level, if it is available at all.
Germany’s Digital Healthcare Act, which came into effect last year, is the first legislation in Europe to provide a dedicated route to national reimbursement of digital applications. The law allows patients to receive prescriptions for health apps, reimbursable by the country’s statutory insurance which covers around 90% of the population. For a medical app to be included in the registry of reimbursable apps, its developers must meet certain conditions, such as compliance with privacy laws. It also offers a 12-month sandbox-period to provide evidence proving the app’s positive effect.
The acceptance of digital therapeutics by payors is also quickly growing in the U.S. According to a survey from last year, 44% of physicians are interested in prescribing health apps for patients, while nearly one third of various insurers already provide some level of coverage and many more intend to join these ranks soon.
In the European Union, the COVID-19 pandemic has accelerated the momentum for the digitisation of healthcare. The European Commission has launched several initiatives to support the uptake of digital solutions and started conversations around building a European Health Union. In this process, we believe, it is vital for the EU institutions and Member States to work together to reduce the regulatory barriers to digital health innovators, such as entrepreneurs offering digital therapeutics solutions to improve health outcomes.
We encourage policy makers to learn from the best practices and develop a common EU framework for the reimbursement and prescription of digital solutions. This has the potential to greatly support the sustainable adoption of digital therapeutics, reduce healthcare inequalities and improve Europe’s competitiveness. Providing clear pathways and less fragmentation across Europe would enable digital health entrepreneurs to spend fewer resources on navigating complex regulation and more time for innovating.
As the potential of digital therapeutics innovation is accelerating, it is important to ensure that startups have all they need to scale their solutions across borders and that their products are accessible to patients and health professionals.
At Allied for Startups, we believe digital health entrepreneurs should be a part of conversations shaping the future of healthcare. Our DTx alliance brings together startups and policy makers to lead the dialogues on the crossroads of digital health innovation and policy.
Picture by Freepik.