April 24, 2025 • 13 mins
In this episode, we review the definition of digital therapeutics, FDA risk classifications and pathways to approval and reimbursement for digital therapeutics and clinical services related.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:03):
Welcome to the First FIll.
My name is Katie Meyer,and I serve as the Senior Director of Content
Creation at APha,and I'll be your host for today's episode.
Today, we're diving into an exciting and rapidly
evolving area of pharmacy practice,digital therapeutics.
More specifically,we'll touch on a general definition
of what digital therapeutics is, FDA
(00:24):
risk classifications and approval pathways.
Before we divein, I'd like to introduce you to my guests today.
Hailey and Yara.
Hailey and Yara,why don't you introduce yourselves?
Thanks, Katie.
My name is Hailey and I'm the senior Managerof Custom Education here at APhA
and I've been working a lot of digital healtheducation programs, thanks for having me.
(00:46):
Hello.
My name is Yara Al’ ShaerI serve as the executive fellow here, APhA,
and I'm very excited to be here today.
Thanks, Hailey and Yara.
I'm excitedto have you both here for today's podcast.
Today we wanted to establish a baselinerelated to regulatory approval pathways available
for digital therapeutics, as well as reimbursementpathways that clinicians are beginning to use.
(01:08):
During episode two, I’ll welcome
Andy Molnar, the CEO of DigitalTherapeutics Alliance, to discuss
more about the evolution of reimbursementand what he's seen in this quickly evolving area.
So let's dive into today's discussion.
Yara, to begin our conversation,could you provide our listeners
with the definition of digital therapeutics?
(01:32):
Absolutely, Katie.
There wasn't always a clear definition of whatthe term digital therapeutics truly encompassed.
But in 2017, the Digital Therapeutics Allianceset out to develop a definition
so that the industry could identify productsthat qualify as therapeutics
and create a reference point for patients,
(01:53):
clinicians, policymakers and payers.
In 2020, the Digital Therapeutic Alliance engagedwith the international organizations
for standardization to formally definethe term digital therapeutic.
In 2023, ISO TR 1147
Health Informatics Personalized Digital Health
(02:14):
Digital Therapeutics HealthSoftware systems with published
which included the formal definitionof a digital therapeutic,
which is a health softwareintended to treat or alleviate
disease, disorder condition or injury bygenerating and delivering a medical intervention
that has demonstrated both positive
(02:35):
therapeutic impacts on a patient's health.
A few key principles to noterelated to this definition.
First, the term health software,which refers to software
intended to be used specificallyfor managing, maintaining
or improving health of individual personsor the delivery of care.
And this is also includeswhat is considered software as a medical device.
(02:59):
Second, the use of term, treat or alleviate.
This refers to diagnosis, prevention,monitoring, treatment alleviation,
compensation, investigation, replacement,
modification, support, sustaining,
control, or disinfectionas potential intended uses for a product.
(03:19):
Third, the use of the terms disease, disorder,
condition or injury alignwith the definition of a medical device
and patient who is
displaying symptoms of a diseasedisorder, condition or injury does not require
a formal diagnosis in order to beginreceiving treatment with a digital therapeutic.
(03:40):
Lastly, the terms demonstratable
positive therapeutic impact indicatesthe need for clinical evaluation
to ensure that each digital therapeutic productis able to accomplish what it claims to do.
This can range from for exampleslike a positive impact on a patient's health
to other forms of improvementrelated to specific conditions,
(04:02):
such as an improvement on cognitionor mental health.
And just to briefly differentiate between digitaltherapeutics and digital health technologies.
Digital therapeutics are one categorywithin a broader group known as digital health
technologies.
While digital health technologiesinclude tools like wellness apps, wearables
or telehealth platforms, digital therapeuticsspecifically deliver clinically
(04:25):
evaluated interventionsintended to treat or manage health conditions.
That distinction is importantwhen we start talking about
FDA risk classification and regulatory pathways.
Thanks so much.
What a great overview.
Now, Hailey, could you explain the FDA
regulatory classificationrelative to digital therapeutics
(04:47):
and then dig into the different approval pathwaysavailable for these?
Sure, Katie.
So FDA takes several factors into considerationwhen determining
how to classify a digital health product.
These include intended use or indication of use.
So the general purpose of the productand the condition
the product will diagnose,treat, prevent, cure or mitigate,
(05:08):
including a description of the patient populationin which the device is intended.
Next is risk.
This is important as the FDA regulates productsbased on the potential risk
it poses to human health during its intended use.
Next is class, which is essentially tied
to risk,which I'll review further in a few moments.
And last is regulatory controls,which are the extent of control
(05:29):
necessary to provide assurance of the device'ssafety and effectiveness.
So I mentioned risk being importantin its relationship to class.
Let’s dive a little bit more into that.
FDA classifies productsas lowest moderate or highest risk.
An example of low risk risk or Class one products.
is a podimetric smartmat that uses remote temperature
(05:52):
monitoring for preventative identificationof diabetic foot ulcers.
About 35% of all digital solutionsand medical devices are considered lowest risk.
Moderate risk or class two
devices have a slightly higherrisk of harm than those classified as low risk.
A moderate risk device is Apple's ECG software.
This device measuresdifferent kinds of electrocardiogram
(06:14):
readings through a variable sensorthat Apple Watch.
The device is classified as moderate risk dueto potential for wrong information being provided
to the patient, which could in turn resultin misnformation about the cardiovascular risk.
53% of digital devices or medical devicesare considered at moderate risk.
And lastly, highest risk or class three devices
(06:35):
are rigorously testeddue to their high risk or potential harm.
An example of a highest risk device is Abbottfreestyle devices
that is attached with a microneedlethat humans body.
9% of all digital solutions in medical devicesare considered high risk.
Thanks, Hailey.
So Yara with that information in mind,can you now discuss FDA
(06:57):
regulatory pathways that existfor the approval of Digital Therapeutics surgery?
Several FDA regulatory pathways exist for approval
of medical devices,including digital therapeutics.
The most common pathway is the 510K pathway
also known as pre-market notification or PMN.
In this pathway, a manufacturer provides datathat proves their devices is similar in safety
(07:22):
and effectiveness to predicate device or devicethat's already in the market.
FDA commonly grants approval via a 510 K
pathway to market products that are within the lowrisk class one and two devices.
Examplesinclude the podimetric Smart Mat and Apple's EKG
software that were mentioned by Hailey,they were both cleared through the 510 K pathway.
(07:44):
The de novo pathway is a pathwayused for medical devices with low to moderate risk
classification, which have never been marketedbefore and serve a novel purpose.
The premarket
approval pathway is usually appliedto class three high risk medical devices
and requirerigorous testing for safety and effectiveness.
(08:05):
A good example is Abbott's Freestyle Libre,
which was approved through the premarketapproval pathway.
An additional pathwaycalled the humanitarian device
exemption has been created for medical devicesfor rare diseases
where less than 4000individuals in the United States are affected.
FDA has created a faster accelerated pathwayfor these devices
(08:29):
due to low commercial viability.
This is essentially similarto the fast track designation
used for drugstreating rare diseases or conditions.
Lastly, the breakthrough classification program
that was created specificallyfor new medical products and digital health
products that provide more effective diagnosisand treatment of life threatening conditions
(08:55):
that are irreversibly debilitating diseases.
This classification is reservedspecifically for a novel product.
This program isn't a traditional FDA pathway,but a voluntary program to provide
patients and health care providerswith timely access to these medical devices
by speeding up their development assessmentand review while
(09:18):
preserving the statutory standards and pathways.
An important differentiationwhen considering the approval process
for digital health solutions compared to drugsis that digital health solutions can be cleared,
granted or approved based on the type of pathwaythey go through.
For example, classone or two digital health solutions
(09:39):
that go through the FDA510 K pathway are considered cleared.
Devices that go
through the de novo pathway are considered
granted and class III products that go throughPMA are considered approved.
It's important to utilize the correct terminologywhen referring to digital solution
(09:59):
and approval pathway.
Thanks Yara,that was certainly a lot of information
and I appreciate yougoing through it for our listeners.
So now that we've got DigitalTherapeutics defined,
we have discussed risk, classificationand pathways to approval.
Let's talk very briefly about reimbursement
and we'll hear more from our SME next weekabout this evolving landscape, However.
(10:23):
Hailey, Can you provide a high leveloverview of reimbursement
pathways that are currently availablefor digital therapeutics?
Sure. Katie.
Up until just this year,there wasn't really a mechanism
for reimbursement of digitaltherapeutics through Medicare.
However, in July of 2024,CMS introduced the potential new
reimbursement pathway for digital mental healthtreatment devices and added
(10:47):
HCPCS codes for prescribing FDAapproved digital therapeutics for mental health.
The first 20 minutes of managing a patient'sdevice each month and each additional
20 minutes of management.
This was a
huge milestone and the reimbursementfor digital therapeutics right now,
as it will allow for outcomes based researchto be conducted to provide rationale
behind the use of digital therapeuticsand the additional need.
(11:09):
Medicaid and Medicaid Managed care plans Considerfee for service, product coverage pathways,
or coverage for a specific benefit programsuch as CHIP
or EPSD on a state by state basis.
The VA is also beginningto cover some digital therapeutics.
From a private insurance perspective,the durable medical equipment
pathway is one option for payment and CPT codesdo exist
(11:31):
for remote physiologicand remote therapeutic monitoring.
Also, APhA does offer a certificate programon collaborative medical billing, and opportunitie
like RPM if you're interested in learninga little bit more about this specifically.
Lastly, a bit less exciting are employer sponsoredmodels, which include value based contracts
and other mechanisms that manufacturers can useto directly negotiate with employer groups,
(11:54):
a cash based model where the consumer paysout of product for the cost
associated with the digitaltherapy also does exist and occur.
Awesome.
Thanks Hailey, for breaking those down.
The update to Medicare fee schedulethis year truly does highlight that these products
are becoming moreand more important in our health care
infrastructure and the importance of pharmaciesstaying up to date.
(12:14):
Well, with that, I'm
going to go ahead and summarizesome key points from our discussion today.
Digital Therapeutics is defined as a healthsoftware intended to treat or alleviate a disease
disorder, condition or injury by generatingand delivering a medical intervention
that has demonstratable positivetherapeutic impact on a patient's health.
FDA classifiesdigital therapeutics based on level of risk.
(12:36):
to the human with three riskcategories, lowest, moderate and highest.
There are various approval pathwaysavailable for FDA clearance
or approval of digital therapeutics,and that terminology
differs depending on the pathwaythat the Digital Therapeutics was approved.
For example, a lowest risk therapeuticthat went through the 510 K pathway is considered
cleared a highest risk therapeutic
(12:58):
that went through the premarketapproval pathway is considered approved.
And lastly, reimbursement pathways continue
to evolve with a recent addition of codesto the Medicare
Physician payment fee schedule just this yearfor digital mental health therapeutics.
It will certainly be interestingto see how the field of reimbursement
continues to expand for these products.
(13:19):
All right, everyone, thank youso much for listening to episode one this month.
Be sure to listen in the next weekwhen we invite guest Andy Molnar, the CEO of
Digital Therapeutics Alliance, to discuss the workthey're doing to advocate for reimbursement.
And lastbut not least, head over to the Learning Library
at learn.pharmacist.comto grab your CPE for listening.
(13:40):
Thanks and take care.
Welcome to the First FIll.
My name is Katie Meyer,and I serve as the Senior Director of Content
Creation at APha,and I'll be your host for today's episode.
Today, we're diving into an exciting and rapidly
evolving area of pharmacy practice,digital therapeutics.
More specifically,we'll touch on a general definition
of what digital therapeutics is, FDA
(00:24):
risk classifications and approval pathways.
Before we divein, I'd like to introduce you to my guests today.
Hailey and Yara.
Hailey and Yara,why don't you introduce yourselves?
Thanks, Katie.
My name is Hailey and I'm the senior Managerof Custom Education here at APhA
and I've been working a lot of digital healtheducation programs, thanks for having me.
(00:46):
Hello.
My name is Yara Al’ ShaerI serve as the executive fellow here, APhA,
and I'm very excited to be here today.
Thanks, Hailey and Yara.
I'm excitedto have you both here for today's podcast.
Today we wanted to establish a baselinerelated to regulatory approval pathways available
for digital therapeutics, as well as reimbursementpathways that clinicians are beginning to use.
(01:08):
During episode two, I’ll welcome
Andy Molnar, the CEO of DigitalTherapeutics Alliance, to discuss
more about the evolution of reimbursementand what he's seen in this quickly evolving area.
So let's dive into today's discussion.
Yara, to begin our conversation,could you provide our listeners
with the definition of digital therapeutics?
(01:32):
Absolutely, Katie.
There wasn't always a clear definition of whatthe term digital therapeutics truly encompassed.
But in 2017, the Digital Therapeutics Allianceset out to develop a definition
so that the industry could identify productsthat qualify as therapeutics
and create a reference point for patients,
(01:53):
clinicians, policymakers and payers.
In 2020, the Digital Therapeutic Alliance engagedwith the international organizations
for standardization to formally definethe term digital therapeutic.
In 2023, ISO TR 1147
Health Informatics Personalized Digital Health
(02:14):
Digital Therapeutics HealthSoftware systems with published
which included the formal definitionof a digital therapeutic,
which is a health softwareintended to treat or alleviate
disease, disorder condition or injury bygenerating and delivering a medical intervention
that has demonstrated both positive
(02:35):
therapeutic impacts on a patient's health.
A few key principles to noterelated to this definition.
First, the term health software,which refers to software
intended to be used specificallyfor managing, maintaining
or improving health of individual personsor the delivery of care.
And this is also includeswhat is considered software as a medical device.
(02:59):
Second, the use of term, treat or alleviate.
This refers to diagnosis, prevention,monitoring, treatment alleviation,
compensation, investigation, replacement,
modification, support, sustaining,
control, or disinfectionas potential intended uses for a product.
(03:19):
Third, the use of the terms disease, disorder,
condition or injury alignwith the definition of a medical device
and patient who is
displaying symptoms of a diseasedisorder, condition or injury does not require
a formal diagnosis in order to beginreceiving treatment with a digital therapeutic.
(03:40):
Lastly, the terms demonstratable
positive therapeutic impact indicatesthe need for clinical evaluation
to ensure that each digital therapeutic productis able to accomplish what it claims to do.
This can range from for exampleslike a positive impact on a patient's health
to other forms of improvementrelated to specific conditions,
(04:02):
such as an improvement on cognitionor mental health.
And just to briefly differentiate between digitaltherapeutics and digital health technologies.
Digital therapeutics are one categorywithin a broader group known as digital health
technologies.
While digital health technologiesinclude tools like wellness apps, wearables
or telehealth platforms, digital therapeuticsspecifically deliver clinically
(04:25):
evaluated interventionsintended to treat or manage health conditions.
That distinction is importantwhen we start talking about
FDA risk classification and regulatory pathways.
Thanks so much.
What a great overview.
Now, Hailey, could you explain the FDA
regulatory classificationrelative to digital therapeutics
(04:47):
and then dig into the different approval pathwaysavailable for these?
Sure, Katie.
So FDA takes several factors into considerationwhen determining
how to classify a digital health product.
These include intended use or indication of use.
So the general purpose of the productand the condition
the product will diagnose,treat, prevent, cure or mitigate,
(05:08):
including a description of the patient populationin which the device is intended.
Next is risk.
This is important as the FDA regulates productsbased on the potential risk
it poses to human health during its intended use.
Next is class, which is essentially tied
to risk,which I'll review further in a few moments.
And last is regulatory controls,which are the extent of control
(05:29):
necessary to provide assurance of the device'ssafety and effectiveness.
So I mentioned risk being importantin its relationship to class.
Let’s dive a little bit more into that.
FDA classifies productsas lowest moderate or highest risk.
An example of low risk risk or Class one products.
is a podimetric smartmat that uses remote temperature
(05:52):
monitoring for preventative identificationof diabetic foot ulcers.
About 35% of all digital solutionsand medical devices are considered lowest risk.
Moderate risk or class two
devices have a slightly higherrisk of harm than those classified as low risk.
A moderate risk device is Apple's ECG software.
This device measuresdifferent kinds of electrocardiogram
(06:14):
readings through a variable sensorthat Apple Watch.
The device is classified as moderate risk dueto potential for wrong information being provided
to the patient, which could in turn resultin misnformation about the cardiovascular risk.
53% of digital devices or medical devicesare considered at moderate risk.
And lastly, highest risk or class three devices
(06:35):
are rigorously testeddue to their high risk or potential harm.
An example of a highest risk device is Abbottfreestyle devices
that is attached with a microneedlethat humans body.
9% of all digital solutions in medical devicesare considered high risk.
Thanks, Hailey.
So Yara with that information in mind,can you now discuss FDA
(06:57):
regulatory pathways that existfor the approval of Digital Therapeutics surgery?
Several FDA regulatory pathways exist for approval
of medical devices,including digital therapeutics.
The most common pathway is the 510K pathway
also known as pre-market notification or PMN.
In this pathway, a manufacturer provides datathat proves their devices is similar in safety
(07:22):
and effectiveness to predicate device or devicethat's already in the market.
FDA commonly grants approval via a 510 K
pathway to market products that are within the lowrisk class one and two devices.
Examplesinclude the podimetric Smart Mat and Apple's EKG
software that were mentioned by Hailey,they were both cleared through the 510 K pathway.
(07:44):
The de novo pathway is a pathwayused for medical devices with low to moderate risk
classification, which have never been marketedbefore and serve a novel purpose.
The premarket
approval pathway is usually appliedto class three high risk medical devices
and requirerigorous testing for safety and effectiveness.
(08:05):
A good example is Abbott's Freestyle Libre,
which was approved through the premarketapproval pathway.
An additional pathwaycalled the humanitarian device
exemption has been created for medical devicesfor rare diseases
where less than 4000individuals in the United States are affected.
FDA has created a faster accelerated pathwayfor these devices
(08:29):
due to low commercial viability.
This is essentially similarto the fast track designation
used for drugstreating rare diseases or conditions.
Lastly, the breakthrough classification program
that was created specificallyfor new medical products and digital health
products that provide more effective diagnosisand treatment of life threatening conditions
(08:55):
that are irreversibly debilitating diseases.
This classification is reservedspecifically for a novel product.
This program isn't a traditional FDA pathway,but a voluntary program to provide
patients and health care providerswith timely access to these medical devices
by speeding up their development assessmentand review while
(09:18):
preserving the statutory standards and pathways.
An important differentiationwhen considering the approval process
for digital health solutions compared to drugsis that digital health solutions can be cleared,
granted or approved based on the type of pathwaythey go through.
For example, classone or two digital health solutions
(09:39):
that go through the FDA510 K pathway are considered cleared.
Devices that go
through the de novo pathway are considered
granted and class III products that go throughPMA are considered approved.
It's important to utilize the correct terminologywhen referring to digital solution
(09:59):
and approval pathway.
Thanks Yara,that was certainly a lot of information
and I appreciate yougoing through it for our listeners.
So now that we've got DigitalTherapeutics defined,
we have discussed risk, classificationand pathways to approval.
Let's talk very briefly about reimbursement
and we'll hear more from our SME next weekabout this evolving landscape, However.
(10:23):
Hailey, Can you provide a high leveloverview of reimbursement
pathways that are currently availablefor digital therapeutics?
Sure. Katie.
Up until just this year,there wasn't really a mechanism
for reimbursement of digitaltherapeutics through Medicare.
However, in July of 2024,CMS introduced the potential new
reimbursement pathway for digital mental healthtreatment devices and added
(10:47):
HCPCS codes for prescribing FDAapproved digital therapeutics for mental health.
The first 20 minutes of managing a patient'sdevice each month and each additional
20 minutes of management.
This was a
huge milestone and the reimbursementfor digital therapeutics right now,
as it will allow for outcomes based researchto be conducted to provide rationale
behind the use of digital therapeuticsand the additional need.
(11:09):
Medicaid and Medicaid Managed care plans Considerfee for service, product coverage pathways,
or coverage for a specific benefit programsuch as CHIP
or EPSD on a state by state basis.
The VA is also beginningto cover some digital therapeutics.
From a private insurance perspective,the durable medical equipment
pathway is one option for payment and CPT codesdo exist
(11:31):
for remote physiologicand remote therapeutic monitoring.
Also, APhA does offer a certificate programon collaborative medical billing, and opportunitie
like RPM if you're interested in learninga little bit more about this specifically.
Lastly, a bit less exciting are employer sponsoredmodels, which include value based contracts
and other mechanisms that manufacturers can useto directly negotiate with employer groups,
(11:54):
a cash based model where the consumer paysout of product for the cost
associated with the digitaltherapy also does exist and occur.
Awesome.
Thanks Hailey, for breaking those down.
The update to Medicare fee schedulethis year truly does highlight that these products
are becoming moreand more important in our health care
infrastructure and the importance of pharmaciesstaying up to date.
(12:14):
Well, with that, I'm
going to go ahead and summarizesome key points from our discussion today.
Digital Therapeutics is defined as a healthsoftware intended to treat or alleviate a disease
disorder, condition or injury by generatingand delivering a medical intervention
that has demonstratable positivetherapeutic impact on a patient's health.
FDA classifiesdigital therapeutics based on level of risk.
(12:36):
to the human with three riskcategories, lowest, moderate and highest.
There are various approval pathwaysavailable for FDA clearance
or approval of digital therapeutics,and that terminology
differs depending on the pathwaythat the Digital Therapeutics was approved.
For example, a lowest risk therapeuticthat went through the 510 K pathway is considered
cleared a highest risk therapeutic
(12:58):
that went through the premarketapproval pathway is considered approved.
And lastly, reimbursement pathways continue
to evolve with a recent addition of codesto the Medicare
Physician payment fee schedule just this yearfor digital mental health therapeutics.
It will certainly be interestingto see how the field of reimbursement
continues to expand for these products.
(13:19):
All right, everyone, thank youso much for listening to episode one this month.
Be sure to listen in the next weekwhen we invite guest Andy Molnar, the CEO of
Digital Therapeutics Alliance, to discuss the workthey're doing to advocate for reimbursement.
And lastbut not least, head over to the Learning Library
at learn.pharmacist.comto grab your CPE for listening.
(13:40):
Thanks and take care.
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