Rooting, Sprouting, and Diversification: Outlook on the Digital Therapeutics Landscape in 2022

2021 was hailed as the “Year One” of digital therapeutics in China, a year when digital therapeutics truly took root as a “seed,” garnering widespread attention and expectations while also facing various skepticism.

How Will Digital Therapeutics Evolve in 2022? Will They Demonstrate Robust Vitality or Gradually Fade into Obscurity? The Author Conducts a Multi-Dimensional, In-Depth Analysis:

The development of healthcare informatization has undergone four stages: Stage 1.0, centered on billing to address non-clinical operations; Stage 2.0, focused on core business processes with departmental subsystems being computerized; Stage 3.0, aiming for interoperability by building an integrated data platform; and Stage 4.0, achieving regional interoperability to enable big data analytics and AI-powered clinical decision support [1].

We are currently in a transitional phase where Healthcare Informatics 3.0, characterized by internet-based healthcare, has not yet fully evolved and been replaced, while the 4.0 stage, featuring AI-empowered assisted diagnosis and treatment, has not yet been comprehensively rolled out.

Internet healthcare is a key feature of the 3.0 stage of medical informatization. It gained significant momentum in 2015. Although notable progress has been made in areas such as assisted diagnosis and treatment, health management, online appointment registration, dissemination of medical knowledge, and internet hospitals, it has yet to penetrate the core of healthcare—namely, replacing on-site clinical consultations by physicians.

Regardless of which currently prominent internet healthcare giant is considered, those that once proclaimed their intent to disrupt the traditional medical ecosystem are now diligently engaging in supplementary or supportive roles within conventional healthcare. To some extent, current internet healthcare has migrated the “drug-revenue-subsidized medical practice” model online.

In the face of illness, the public healthcare system, which holds an absolute dominant position, firmly controls medical resources such as physician talent, academic assets, and hardware infrastructure; thus, internet-based healthcare cannot shake the primary status of serious medical care.

Compared with traditional e-commerce, internet healthcare has consistently been seeking appropriate pathways for conversion. The concept of digital therapeutics, which emerged in the United States in 2020, immediately attracted attention both domestically and internationally. It undoubtedly provided a glimpse of the future direction for various stakeholders who had been struggling to identify viable conversion models for internet healthcare, suggesting a trend of direct evolution from Healthcare Informatics 3.0. However, whether this represents the directional trajectory for the era of Healthcare Informatics 5.0 remains to be seen.

Digital therapeutics possess strong translational and implementation capabilities. By labeling digital intervention technologies as “therapies,” they transform existing medical principles, clinical guidelines, or standard treatment protocols into software-driven interventions. This approach can effectively improve patient adherence to and accessibility of chronic disease management, representing an innovative method that overcomes the limitations of traditional pharmacological treatments [2].

Serious medical care within the public hospital system suffers from limited accessibility due to constraints imposed by the physical reach of its facilities. Although the extended service points of family doctors and community health centers have partially mitigated this issue, they still fall short of the ubiquitous terminal access characteristic of the internet and data-driven era. Furthermore, the inadequate presence of serious medical care in health management, disease prevention, and rehabilitation stages compromises patient adherence. This is manifested in patients’ lack of initiative in managing their own lifestyles and health. Consequently, low adherence significantly undermines the continuity of health management and even the efficacy of pharmacological treatments.

The essence of digital therapeutics lies in the digitization of healthcare services. Based on three potential avenues for future transformation, it can be divided into three sub-concepts: digital vaccines, digital drugs, and digital medical orders, which correspond to prevention, treatment, and rehabilitation, respectively.

The development of digital therapeutics (DTx) products also draws on the concept of genetic “targets” from biopharmaceuticals, leveraging fundamental medical principles and underlying logic to effectively intervene in key factors that determine human health during disease progression. Generally, diseases characterized by long-term management needs, multiple intervention measures, clear clinical guidelines, and low patient adherence and self-management capabilities are suitable for the development of DTx products. Digital therapeutics are not limited by disease types but rather have certain limitations regarding disease diagnosis and treatment processes and intervention methods [2].

Therefore, digital therapeutics primarily target areas that have been neglected or inadequately covered by traditional clinical medicine, significantly enhancing the accessibility of healthcare services and the adherence of healthcare service recipients.

To gauge how far digital therapeutics can go, the first step is to determine whether they can gain acceptance from healthcare service providers. In delivering prevention, diagnosis and treatment, health management, and rehabilitation services, providers evaluate these solutions based on their ability to reduce healthcare workers’ workload, improve medical efficiency and quality, lower hospitalization and readmission rates, and minimize unnecessary severe and critical cases. Of particular importance are their capacity to significantly increase the end-user reach of health management services and substantially enhance the sense of benefit among healthcare recipients. This is the key to securing the recognition, acceptance, and participation of healthcare service providers, a large proportion of whom are medical staff in public healthcare institutions.

Following provider endorsement, digital therapeutics (DTx) are progressively integrated into providers’ service systems and increasingly reflected in the latest clinical practice guidelines. This enables healthcare professionals to apply or recommend specialty-specific DTx in accordance with these guidelines during patient care, thereby incorporating DTx into their clinical decision-making and health management practices.

Second is gaining recognition from payers. When digital therapeutics (DTx) robustly demonstrate, through evidence-based medical research pathways, significantly improved clinical outcomes, enhanced service efficiency, and reduced service costs—particularly substantial savings in health insurance expenditures—China’s payer system, dominated by basic medical insurance, will gradually consider incorporating DTx into its reimbursement framework following Health Technology Assessment (HTA). Although realizing the ideal scenario where physicians can directly prescribe DTx for patient payment will be a lengthy process, there is significant potential to break through policy barriers and establish incentives using the surplus portion of the total global budget for medical insurance.

Commercial insurers may even embrace digital therapeutics earlier, potentially engaging in their R&D, promotion, and operations, provided that digital therapeutics can significantly enhance user stickiness through positive feedback experience design in their products.

However, the most critical factor remains gaining acceptance from the demand side of healthcare services—meaning that patients and other service recipients must be willing to accept digital therapeutics (DTx) and pay for their clinical efficacy. This shift is unlikely to occur in the short term. At present, most patients are only accustomed to covering costs associated with conventional medical interventions, such as pharmaceuticals and surgical procedures. Even efforts to increase consultation fees for healthcare professionals, thereby breaking the long-standing reliance on drug markups to subsidize medical services (“yi yao yang yi”), have faced significant challenges. Therefore, it will take considerable time before patients are willing to pay for the intangible, virtual components inherent in digital therapeutics.

Therefore, all stakeholders in digital therapeutics must fully consider the acceptance levels of healthcare service providers, patients (demand side), and payers, adopting a step-by-step, phased approach to breakthroughs. Only in this way can digital therapeutics become a genuine transformative innovation in healthcare services, rather than merely serving as self-indulgent hype within the medical internet community.

In the era of mobile internet, it typically takes only 3–5 years, or even less, for a new concept to evolve from its initial introduction—often met with fresh excitement—to full-fledged prosperity. If a concept fails to establish a firm foothold amidst widespread skepticism within the first three years, it is likely to fade into obscurity or be replaced by newer, more logically coherent, and system-adaptive paradigms. Therefore, 2022 is a pivotal year for digital therapeutics, marking a critical period for them to take root, sprout upward, and expand into adjacent domains.

Rooting Downward:Delve into value orientation to demonstrate the inherent worth of digital therapeutics. In comparison with traditional therapies, digital therapeutics must solidify their foundational logic, grounded in evidence-based medicine, and involve active participation from clinicians and relevant multidisciplinary team (MDT) members. By addressing the needs and values of physicians in healthcare delivery, digital therapeutics can gain medical professional recognition and engagement.

Building on this foundation, digital therapeutics (DTx) leverage in-depth analysis of extensive clinical data, integrating hospital information systems with real-world clinical data to validate the scientific rationality of DTx clinical pathways. Priority should be given to researching key DTx pipelines, with a focus on adherence and accessibility, achieving substantial evidence-based medical progress in areas such as depression, diabetes, and cognitive impairment in the elderly. By engaging clinicians, particularly general practitioners (family doctors), cohort studies and double-blind controlled trials should be conducted to comprehensively evaluate health intervention outcomes, cost-utility analyses, and other metrics within the DTx framework. Research findings must be published in authoritative medical journals recognized by the medical community. An editorial board comprising numerous senior medical experts and healthcare informatics professionals should be established promptly to compile and annually release the "Clinical Diagnosis and Treatment Guidelines for Digital Therapeutics." As data-driven evidence-based medicine, characterized by a closed loop of data collection, feedback, and application, gradually emerges, more mature DTx products will obtain medical device registration certificates from the National Medical Products Administration (NMPA).

Upward Germination:Widely recognized by multiple stakeholders, strengthening penetration into all links of healthcare services. Extensively secure support from healthcare providers, particularly the participation of general practitioners/family doctors in full-lifecycle management, deeply integrating into processes such as prevention, diagnosis and treatment, health management, and rehabilitation. The goal is to improve provider work efficiency, enhance medical quality, reduce unnecessary workload, and lower service costs, leveraging advantages in compliance and accessibility to give providers a sense of achievement in delivering healthcare services. Gain payer support with robust cost-effectiveness evidence, serving as a powerful auxiliary tool for DRG/DIP-based health insurance fund management, demonstrating tangible capabilities in saving insurance funds, laying the foundation for future reimbursement by basic medical insurance, and providing important support for early entry by commercial insurance. Appropriately utilize internet marketing techniques to identify a digital therapeutic pipeline (such as mental disorders like anxiety) among groups receptive to new innovations, such as young white-collar workers, expand influence on the demand side, and gradually achieve broad social recognition.

Lateral Extension: It can expand from a single point to cover the entire landscape, penetrating the ecosystem of healthcare informatization and growing into a vast forest. Currently, informatization and digital technologies in the healthcare service sector—such as the metaverse, healthcare informatization, mobile health, medical artificial intelligence, and medical consortium platforms—are advancing simultaneously and flourishing across various fronts. Digital therapeutics do not constitute a system capable of spanning the entire healthcare service ecosystem on their own; instead, they must be integrated into the overall ecosystem to proceed in an orderly manner, enabling mutual empowerment and coordinated development.

Furthermore, as the Chinese government is expected to introduce clearer regulatory requirements for this field in 2022, including guidelines that provide enterprises with a more defined pathway for medical device registration, there will undoubtedly be an emergence of more outstanding innovative digital therapeutics companies and industry associations. Through development and exploration, these entities will help establish digital therapeutics standards tailored to China’s healthcare environment.

In 2022, having established deep roots, fostered upward growth, and expanded laterally, digital therapeutics embarked on a promising journey with vast potential ahead.

Author:Zheng Wentao, General Manager of the Department of Intelligent Medicine at the Shanghai Institute of Human PhenomeThe views expressed in this article represent the author's position.

[References]

1. “Internet + Healthcare: Reconstructing the Healthcare Ecosystem” Internet Healthcare China Conference / Li Weining / Wang Jing, January 2016

2. “China Digital Therapeutics White Paper 2.0” (VCBeat, VBInsight), October 2021