A case study… 🙇♂️ 📖
A leading digital therapeutics company went bankrupt. 😕
Pear Therapeutics for Chapter 11 earlier this month. It was a pioneering company in the field of digital health.
Despite partnerships with Novartis, Sandoz, and having multiple apps approved by the FDA, that wasn’t enough.
According to their CEO @Corey McCann, physicians and patients were willing to use Pear’s behavioral health apps, payors were denying payments for use of their apps, despite their clinical necessity and effectiveness.
@katie Jennings of Forbes wrote: “The average selling price was $1,195, according to the company’s annual report. There were more than 45,000 prescriptions written for Pear’s products in 2022, but only around half were filled and the company was able to collect payment for only 41% of those.”
Does $1,195 seem like a steep price for an app?
For an opioid treatment, in combination with buprenorphine, the pricing could be acceptable, if (and this is the point) there was strong evidence that the therapy works.
A study in 2020, by the Institute for Clinical and Economic Review, cast some doubt on the treatment’s effectiveness, specific to the use of an app.
If they had stronger clinical and real-world impact data, they may have had a different outcome.
The takeaway here is that if you’re a digital health company, you need strong evidence to make case for reimbursement. This must be a part of your commercialization strategy, to demonstrate (and prove) your value to the industry.