The New Digital Ecology of Future Medicine: The Rise of Digital Therapy and Its Strategic Implications for the Pharmaceutical Industry (Report Attached)

overview

As a product of cross-border interaction between medical care, technology, retail and consumer industries in the future, a new generation of LIFEcare ecosystem integrating health management and disease management is coming soon. As a typical representative of the concept of LIFE care, digital therapy DTx (Digital Therapeutics) has gradually attracted great attention from the medical and pharmaceutical industry in recent years.

Different from the traditional concept of digital health, digital therapy is based on high-level evidence-based medical evidence, driven by Al-powered software programs to produce a new model of effect, with the purpose of providing professional treatment or intervention measures for patients with specific diseases. Its use scenarios are “more focused”, its medical attributes are “more professional”, and its supervision is “stricter”. The effective ways of digital therapy can be divided into three different types, namely: 1) only software can produce medical effects, 2) software can change patient behavior + use drugs to produce medical effects, and 3) software + artificial synergy can produce medical effects. At the same time, behind the digital therapy products, we see many cutting-edge technologies, including artificial intelligence, big data cloud computing, wearable devices, Metaverse, Internet of Things, low-code development and other technologies, all of which have been applied in digital therapy.

From the perspective of disease field distribution, digital therapy has been tried and explored in most disease fields, and some popular research directions have emerged, such as mental disorders, behavioral and cognitive disorders, endocrine and metabolic diseases, etc. And some industry-leading digital therapy companies and products have emerged.

Looking at the current status of the digital therapy industry, both the world and China are in their infancy. Because of its disruptive innovation potential to the medical service system, it has been highly valued by various stakeholders, especially the enthusiasm for investment and financing in the capital market is extremely high, and regulatory agencies have also issued guidance and management rules one after another. China started slightly later than developed markets. Since the first DTx product medical device license was approved in 2019, as of June this year, 32 products have been approved one after another. It is estimated that the domestic market size is expected to reach nearly 10 billion yuan by 2025 . In the process of its development, we believe that doctors and patients’ understanding and acceptance of digital therapy, the emergence of stable final payers, and the support of regulatory authorities will become important factors affecting the further development of the market.

For the pharmaceutical industry, the advent of digital therapeutics brings new variables and opportunities. At a time when the domestic pharmaceutical industry is facing multiple challenges such as fierce product competition, price cut pressure for entry, and diversion through multiple channels, business transformation has become a core issue for corporate managers. The emergence of digital therapy has brought new variables to the traditional medical ecology, which means richer treatment methods, more diverse diagnosis and treatment paths, and more personalized user experience. How to use digital therapy to enhance the competitiveness of existing businesses and tap new growth points is an important topic for pharmaceutical companies to think about.

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