Issue 140
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’s what’s going on in FDA-regulated digital health:

• Teaser: Keep an eye out for a new pharma licensing deal for a prescription digital therapeutic early next week.
• More on the A9291 HCPCS code for digital behavioral therapy (Issue 139): The Simon-Kucher Global Digital Health team (Chuck Gammal, Chris Barr, and Madison Mahoney) emailed me with a few thoughts on the new code: “As the dust settles on the CMS announcement, PDT companies may find that A9291 creates a catch-22 for their products. While the code will expand access to PDTs, likely shifting coverage to the medical benefit, its breadth could pose a challenge for PDT differentiation, and set a price cap for PDTs unable to differentiate.”
• 31 DiGAs and counting: Sonormed GmbH is the latest German company to successfully add its digital health offering added to Germany’s DiGA formulary. Sonormed’s My Tinnitus App is now available and reimbursed at €449: “The app provides patients with psycho-education and instructions for self-management through comprehensive tinnitus-specific multimedia content. Within 10 weeks, the patients are guided through various lessons in an interactive, entertaining and individually tailored manner and are gradually familiarized with targeted educational content and exercises. Each lesson ends with a motivational review to start the next lesson a few days later.”
• Another pharma customer reveal for BrightInsight: Global biopharma UCB tapped BrightInsight “to develop and bring to market a digital disease management solution for patients with rare diseases.”
• E&O readers already knew this one because I’ve linked to the study before (Issue 137), but this week Blue Note Therapeutics officially announced its partnership with Curebase to help it run a fully remote, decentralized trial.
• DiME (the Digital Medicine Society) has organized a group that includes “Acclinate, Amgen, GSK, Lightship, Medable, Rubix LS, Sage Bionetworks, Savvy Cooperative, and THREAD Research to drive inclusion in digital clinical trials. The initiative aims to provide the tools and framework necessary to successfully integrate diverse perspectives during the planning process for trials that include a technology device for participation.”
• One more thing… While it’s not the only digital health company to launch or expand its IFU thanks to the FDA’s pandemic era (non)enforcement policy related to psychiatric digital health devices, Big Health might be the only one to tweet out a disclaimer in response to every one of its own account’s tweets? By my count, Big Health has tweeted 115 times since September about the regulatory status of its two digital therapeutics: “Sleepio and Daylight are available as an adjunct to usual medical care for Insomnia Disorder or Generalized Anxiety Disorder, respectively, for adults ages 18 and older, without FDA review under their COVID-19 policy.”

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New bill aims to create a Medicare benefit category for prescription digital therapeutics

When the Omnibus spending bill text dropped earlier this week, I expected to find language tucked in that mirrored either Omada’s Prevent Diabetes bill or Pear’s Prescription Digital Therapeutics to Support Recovery bill — or both. Versions of these bills have been kicking around for a couple of years but neither ended up in the spending bill. The day after the 2,700+ spending bill dropped, the Digital Therapeutics Alliance announced a bill focused on establishing a Medicare benefit category for prescription digital therapeutics: The Access to Prescription Digital Therapeutics bill.

While Pear’s version of this bill used language that narrowly focused on substance use disorder PDTs, this bill is relatively broader in scope. It also enjoys the full backing of the DTA and its members.

I was able to talk to a number of people about the bill — which I’ll call APDTA — in the last two days. Here are a few things that I learned along with some speculation. Akili’s Chief Legal Officer Jacqueline Studer explained to me that the bill has two core aims:

• If the APDTA becomes law it would establish an official definition for prescription digital therapeutics at the federal level. (As you might expect that definition mirrors the one that the DTA has created. It is intended to be inclusive of all prescription-only, FDA-authorized digital therapeutics indicated for treating, managing, or preventing disease.)
• APDTA would also establish a new Medicare benefit category for prescription digital therapeutics.

The creation of a Medicare benefit category for prescription digital therapeutics would help advance reimbursement for PDTs on a few fronts, as discussed below. But it would set up a framework for reimbursement, not guarantee reimbursement in and of itself.

Should the MCIT program ever come to fruition in some form (automatic temporary reimbursement from CMS for medical devices with FDA Breakthrough Designation status), prescription digital therapeutics would qualify if they had their own benefit category.

HCPCS code: The A9291 code that Pear managed to secure last month is another example of why PDTs need a Medicare benefit category. Remember: Originally, Pear attempted to secure three, distinct HCPCS codes for each of its three products, but CMS created a generic code for prescription digital behavioral therapy instead that it stated could be used by Non-Medicare payers.

With a Medicare benefit category in place, companies like Pear could (once again) make their case to CMS for product-specific HCPCS codes, which would allow them to price their PDTs on a per-product basis. (CMS would still look to private payer pricing agreements for the PDTs to come up with the government’s own fee schedule.)

Akili explained in an email that “for Medicaid, the bill ensures that state Medicaid programs are eligible for federal financial participation (FFP) when they cover PDTs.”

What am I missing?

But wait: What are this bill’s chances?

The Biden administration is set to release its budget in a few weeks’ time. If there is a mention of this in there, that’s one good signal. President Biden also spent a good amount of time discussing access to mental health during his State of the Union address, and I hear this bill aligns with the administration’s objectives there. (If a big bill focused on access to mental health services starts making the rounds on the Hill soon, then I’ll be sure to check whether language from APDTA is included.)

Finally, APDTA needs more co-sponsors (and maybe more people from the industry) to help push it through. So, I’m curious to see which other Congress members and industry groups back it.

Here’s a rundown from the bill’s House and Senate sponsors so far.

J&J taps Truepill for pediatric ear infection virtual visits as part of smart otoscope launch

Way back in June 2020 (Issue 058), E&O reported on J&J’s quiet acquisition of pioneering digital health company CellScope. The startup developed a Class 1 medical device that could attach to a smartphone to form a smart otoscope.

As I wrote two years ago before J&J bought it, CellScope described itself like so:

By late 2016, less than two years after commercially launching, the company’s team of about 15 began to depart. It joined the many walking-dead digital health startups in a quasi-existence for a couple of years before J&J’s consumer division snapped up the assets in mid-2019. (For the full scoop on this, read about it in the E&O archives.)

Anyway, while it wasn’t clear what J&J would do with its CellScope assets back when I wrote about the deal in 2020, last month the company quietly launched a rebranded, smartphone-connected otoscope product named SmartCheck from Children’s Tylenol. (J&J even posted an unlisted teaser video about the launch in October on Youtube here.)

SmartCheck is currently available online from Target, Amazon, and other stores. It’s also sitting on some physical store shelves. The price is around $80, which is about what CellScope sold it at back in the day.

Perhaps the most interesting part of the SmartCheck launch, however, is that J&J tapped Truepill to provide telemedicine visits to SmartCheck users for between $50 and $60 a session:

Clinical trial updates: Janssen-Koa, Daiichi Sankyo, Mitsubishi Tanabe Pharma

This is a recurring feature of E&O Fridays that digs into new digital health-related clinical trials as well as updates to others E&O mentioned in previous issues.

More details on Janssen’s MDD study with Koa Health’s Mindset app

Janssen and Koa announced plans for this clinical trial back in November 2020, but the companies just posted details on clinical trials [dot] gov this past week.

The researchers aims to enroll 40 participants. Here’s the experimental arm description:

All the details here.

Mitsubishi Tanabe Pharma, Emory University, and Dignity Health to use digital health tech to assess progression of ALS: Most of the details are still scant on this study but here’s the purpose statement:

Daiichi Sankyo completed its wearable ECG study to ID AA

Daiichi Sankyo completed its wearable ECG study with a lower than expected 862 participants enrolled (down from a hoped-for 2,000). The company’s intervention arm included a CE Marked ECG app called Preventicus from Germany along with unnamed wearable medical devices. More details here but no results yet.

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