Issue 202
Welcome back to E&O Fridays, a paying subscribers-only weekly newsletter focused on the world of digital pharma products and FDA-regulated digital health.
E&O Fridays.
Here are a few quick happenings in FDA-regulated and pharma-focused digital health…
- The news you know: Given how difficult things are right now in digital health, I thought it was a savvy move by Twill to be transparent and publicly announce that it was searching for a pharma partner for Aspiro, Twill’s digital therapeutic that treats both generalized anxiety disorder and major depression disorder. Twill got the word out via an article over at STAT. The kicker is that Twill says it will not take Aspiro to market if it doesn’t land a partner. Aspiro — not to be confused with Better Therapeutics’ AspyreRx — does not yet have FDA market authorization but it could secure it some time in 2024. One thing Twill shared with me (that wasn’t in the STAT article) was that it worked with Eversana to survey about 30 payers to figure out a reimbursement level for Aspiro: “between $1,000-1,500 per course of therapy by comparing its efficacy and cost to that of antidepressant medication and psychotherapy.”
- Small thing but worth noting: Pear Therapeutics’ main website went offline this past week. Some of its dedicated sites for individual brands like reSET-O are still up though.
- Germany added a new digital health program to its nationwide formulary of reimbursed digital therapeutics (called DiGA for short). The formulary now includes 48 active DiGAs and 6 that have been removed. The newest addition is focused on Type 2 diabetes management, comes from German company Vision2B GmbH, and is named mebix. It’s priced at €499.00 and appears to be focused on educating patients about diabetes and helping them set goals and track lifestyle changes around nutrition and exercise.
- Big Health tweeted that it had formed an exclusive partnership with the American Psychological Association (APA) to “advance education on the benefits of digital therapeutics.” More on this in the CPT article below.
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New CPT billing code applications for digital cognitive behavioral therapy, RTM for ADHD, redefining what “face-to-face” means
The AMA posted the agenda for its CPT Editorial Panel meeting in New Orleans this coming September, and it includes a handful of billing code applications that likely came from digital therapeutics companies. (Since the process is secretive I’d only know for sure if the applicants themselves told me — let me know if my guesses below are correct.) It appears that — once again — Akili has submitted an application for Category III codes focused on its EndeavorRx prescription digital therapeutic for ADHD. Here’s the description of the requested codes:
“Cat III – Remote Therapeutic Intervention for Algorithmically Adjusted Treatment of ADHD — Establish codes X225T, X226T, X227T to report prescription digital therapeutic (PDT) providing sensory stimuli and simultaneous motor challenges for neural attentional control.”
Akili has argued in a different setting (CMS’ HCPCS Committee) that it can’t use a billing code for cognitive behavioral therapy because EndeavorRx uses sensory stimuli and motor challenges as its “active ingredients” not CBT.
Remember: In May, Akili appeared to submit an application for a single Category III code to describe EndeavorRx, but the application was not successful. The wording for the requested code above is much more specific about how the PDT achieves its therapeutic effect. The May version of the application just vaguely referred to “treatment of inattentive or combined-type attention deficit hyperactivity disorder using digital therapeutic software.”
This next CPT hopeful is a bit more confusing. It seems like the applicant is asking the AMA CPT Editorial Panel to clarify that the RTM family of codes includes “digital cognitive behavioral therapy” and not just “cognitive behavioral therapy.” Doesn’t the “remote” aspect of the codes make this redundant though?
“Digital Cognitive Behavioral Therapy — Revise codes 98975, 98976, 98977, 98978 to include digital cognitive behavioral therapy; and revise the Qualified Nonphysician Health Care Professional Online Digital Assessment and Management Service subheading.”
Not entirely clear to me who might be behind this request, but Big Health tends to use the phrase “digital cognitive behavioral therapy” along with their close partner the American Psychological Association (APA). The partners have also long pointed out that psychologists don’t have prescription authority in every state (only in five states, actually) and this application seems to be an attempt to broaden the types of health care professionals who can use these codes. Check out this paragraph from the recent Big Health-APA partnership blog that the APA published this past week:
“APA representatives have met with leaders from the Centers for Medicare & Medicaid Services to propose a coding and reimbursement model for digital therapeutics. APA is working to create a system that would allow psychologists, physicians, and other eligible providers to bill private or government insurance organizations for using these apps with patients.”
That’s pretty consistent with the application above.
And remember: Someone applied for three new codes under that “Digital Cognitive Behavioral Therapy” heading back in May.
“Remote Physiologic Monitoring – Revise 99454 — Revise code 99454 to specify each calendar month.”
This is a request to tweak the language from every 30 days to each calendar month.
“In person-Face to Face Definitions — Revise the Instructions for Use of the CPT Codebook in the Introduction of the code set to clarify that for purposes of CPT coding, ‘face-to-face’ encompasses both in-person and synchronous audio-video communication; revision of guidelines throughout the code set to clarify when face-to-face, in-person, synchronous audio-video, or synchronous audio-only communication is appropriate; revision of codes 99495-99498, 90875, 90876, 96116, 96121, 96125, and 97161-97172 with the removal of the term ‘face-to-face’; revision of 98960-98962 with the addition of the phrase ‘or synchronous audio-only’; and revision of 0362T, and 0373T with the removal of ‘face-to-face’ and the addition of ‘in person’.”
This request is pretty interesting. Redefining what “face-to-face” means is a big ask. Definitely one to watch that could open up a lot of possibilities for remote care billing. Seems like a big swing. I’ll keep an eye on these for changes and withdrawals ahead of the meeting in September.
Citing Pear’s troubles, Orexo pulls back from digital therapeutics and considers not pursuing a 510(k) for its opioid use disorder program
During a quarterly call with investors, Orexo CEO Nikolaj Sorensen said the Swedish pharmaco was “forced to pull back” on digital therapeutics. While it is still distributing deprexis via the VA, it is reconsidering its go-to-market plans for its opioid use disorder digital therapeutic, Modia. Citing Pear Therapeutics’ bankruptcy, Orexo said it may not seek a 510(k) clearance for the DTx. Here are some quick excerpts of quotes from Sorensen’s talk with Wall Street:
Orexo’s pullback on digital therapeutics:
“On digital therapeutics — that’s the one area where we haven’t seen progress commercially during the quarter. And the reason for that is what we actually shared in the first quarter — we have actually stopped our commercial efforts right now. We have been forced to pull back to see how can we improve the reimbursement and distribution model. We did develop a model and we did develop a system that works, but we also have to realize after feedback from physicians that this is complex. This takes more steps than what they appreciate and we need to find a more simple way.”
Hold up: Orexo can’t really pull back on digital therapeutics entirely because it has a 10-year contract with the VA for deprexis. The VA has agreed to pay $149.75 for every 12-week course of therapy that Orexo provides to VA patients with mid to severe major depression disorder (MDD). The following is a snippet from the written report about Orexo’s Q2 results (the rest of the quotes in this article are quotes from the CEO’s investor briefing.):
“Orexo continues to evaluate the business opportunities, but with a ten year contract with the Veterans Affairs for deprexis, positive feedback from many physicians and patients using MODIA and the opportunity to combine our digital therapies with ZUBSOLV, we continue to see value potential in digital therapies. However, to reflect the increased uncertainty we have reduced the direct costs and expect continued reductions in the second half of 2023 in administrative expenses, when the new streamlined reimbursement systems and processes are implemented.”
Orexo may use its online storefront to distribute deprexis to VA patients:
“One of the areas we have a lot of focus on is the Veteran Affairs. Here we have worked with Veteran Affairs to find a simple solution. To set up a complex solution, is not that difficult. With the knowledge we have from Trinity Health and other accounts who are trying to find to get the reimbursement model to work, we knew we had to find something that is very simple and aligned with what the physicians and health care professionals use today. We believe we have that solution in place today where we are leveraging our online storefront where you can purchase access to our digital therapies. We can actually use that and convert that so that Veteran Affairs can access the programs (or deprexis) through that channel, which we think is quite exciting for that because that will work on a nationwide basis.”
Orexo said that the VA seems interested in Vorvida too but has yet to commit. Vorvida would have be FDA-listed before Orexo could distribute it to the VA, but it doesn’t seem to be yet?
Orexo only has two full-time employees focused on digital therapeutics, but others from its US pharma business spend part of their time on DTx:
“Where we are right now is we are focusing our business to reduce our expenses. Our expenses today that you see under DTx are for the majority allocations from our US pharma business. Right now we don’t really have — we have two dedicated people working with DTx — the rest are predominantly working with US pharma but some of their expense is allocated to DTx.”
Orexo may not pursue a 510(k) for its opioid use disorder digital therapeutic, Modia:
“In terms of regulatory approach: We have been looking at a 510(k) from the start but you could say the 510(k)-focused companies, in particular Pear Therapeutics, have not been successful in this space. There is, of course, a question: Is there a need for a 510(k)? Because with a 510(k) there is a much higher regulatory burden. It is much harder — you might say there are more controls on how we can promote the product — even though you can come with some treatment claims — it also comes with some limitations with how you can adopt the product…” “On the DTx side, you have to weigh in the clinical data results but also how the market evolves and what is necessary to receive reimbursement in the market and to receive utilization. And so far, these prescription digital therapies, we don’t have any examples of someone who has reached volumes in the US. Where we have seen more successful uptake of digital health is where the digital health has been integrated into the healthcare providers’ care programs and that way receive reimbursement indirectly from being part of an integrated care program from the healthcare provider, which is different from actually having a prescription product.”
Orexo may try to scoop up some of Pear’s old state grants for opioid use disorder:
“And I also want to remind those that have been following the digital space that at Pear Therapeutics a quite sizeable share of their revenues came from grants in different states. So there are some relatively large grants to be obtained over time.”
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