Issue 238
Digital health research from Brian Dolan

E&O: SaMD

Welcome back to E&O: Software as a Medical Device, a paying subscribers-only weekly newsletter focused on the world of digital pharma products, prescription digital therapeutics and other FDA-regulated digital health.

Here’s a quick round-up of FDA-cleared digital health news items and scoops you probably haven’t read about elsewhere yet…

• Unrelated: Last week I posted a big update to E&O’s Pricing Database. I’ve since added a new entry for Hello Heart that includes its 2024 pricing. Bit of a jump from prior years… Check out the new 2024 Hello Heart pricing here along with 120+ others.
• At the American Medical Association’s upcoming CPT Editorial Panel meeting in February, the agenda includes a request to reduce the amount of time required for the Transitional Care Management (TCM) billing codes 99495 and 99496, which are typically used for primary care following a discharge from the hospital. (Telehealth companies sometimes use TCM, which is why I’m highlighting them here.) The requested revision is a bit vague in the agenda: “Revise codes 99495, 99496 by reducing the current time frames with patient interactions.” This is the first CPT billing code meeting in recent memory that did not include a request to change something about the Remote Therapeutic Monitoring or Remote Physiologic Monitoring codes or a a request to add new ones focused on digital cognitive behavioral therapy or the like.
• I’ve been tracking Swing Therapeutics’ rollout of its own virtual clinics, called Swing Care, which prescribe the company’s prescription digital therapeutic (PDT) for fibromyalgia, Stanza, as part of their care model. I just noticed that for patients in Nevada, Swing directs people to Optum-owned clinic Southwest Medical. For patients looking for Swing’s prescription digital therapeutic in Pennsylvania, the company directs them to UPMC. Interesting to see that some external healthcare providers have agreed to prescribe the PDT. More here.
• New RCT points to forthcoming FDA-regulated digital therapeutic for veterans with migraines following traumatic brain injury: “The AMMO digital therapeutic (DTx) study will provide an online based program for participants with migraines after head injury to follow for 12 weeks. This study aims to see if using cognitive behavioral therapy aimed at military service members in an online self administered platform is effective therapy in the relief of migraines compared. The study will use a single blind online comparative program to test the effect.” The study’s sponsors, a US military medicine foundation, have indicated the intervention would be subject to FDA regulation if it went to market. More here.
• And here’s another interesting study that isn’t necessarily a sign that Calm is considering FDA market authorization for treatment claims, but the study’s sponsor, UCSF, is looking to figure out if Calm’s program might be used as a part of medical treatment: “In collaboration with Calm Health, the investigators aim to evaluate the efficacy of Calm Health’s meditation, mindfulness, and clinical programs in reducing symptoms of anxiety and depression, as well as perceived stress, in patients.” More here.
• Side note: Many have chronicled the years-long downturn in digital health funding, but I’ve yet to see anyone point out the considerable decline in clinical trials listed on clinical trials [dot] gov that focus on digital health interventions. Longtime readers might remember I could find half a dozen or more each week — now I’m lucky to find one or two interesting ones every other month!
• One more thing… Over in Germany, the country’s national formulary for reimbursed digital health programs (DiGA) just provisionally re-listed a migraine-focused digital health program called sinCephalea developed by German-based Perfood. The program was removed from the formulary in October because “no positive care effect could be proven for the DiGA,” but its deletion has since been “temporarily lifted.” “sinCephalea represents a guideline-compliant prophylaxis for migraine attacks. Over a 12-week intervention phase, patients are gradually introduced to the implementation of new nutritional findings from personalized nutrition, as well as supported by classic conservative measures such as individual advice on lifestyle changes. Based on individual blood sugar reactions to foods and meals, sinCephalea creates personalized recommendations for a low-glycemic diet, which are made available in the app in the form of a nutrition report.” The program requires the use of a CGM. SinCephalea costs €690.00 for every 90 days of use.

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New York State Medicaid committee declined to reimburse digital therapeutic Freespira and digital diagnostic CanvasDx (plus pricing info for both)

Last month the New York State Medicaid Evidence Based Benefit Review Advisory Committee met to discuss whether the state should pay for Freespira, a digital therapeutic for panic disorder or PTSD, and Canvas Dx, a digital diagnostic aid for autism. (The hours-long meeting is available to watch online, which I did, but the meeting’s minutes and lengthy reports on Freespira and Canvas Dx are a better use of your time if you want to dig into this more.) Here’s a quick recap of the Freespira portion of the discussion: The Committee set out to determine whether:

• there was sufficient high-quality evidence demonstrating the effectiveness of Freespira for individuals with panic disorder or PTSD; and
• whether the evidence supported coverage of the treatment.

Here are a few excerpts from the meeting’s minutes that are helpful to understand the shape of the discussion and the particular concerns the policymakers had with Freespira’s body of evidence:

• Questions about the placebo effect in studies of treatment for mental health conditions and whether the study design accounted for the placebo effect
• Whether other completed and ongoing studies of the treatment might be published and whether the Committee could reconsider the treatment if further evidence was produced
• Problems with access to psychotherapy services for Medicaid members and whether NYSDOH could analyze data to identify access issues
• Whether MCOs could cover Freespira on their own.
• Concerns that MCOs could use Freespira as part of a step therapy requirement that would bar Medicaid member access to other treatments. Trish Schell-Guy clarified that MCOs could not use a noncovered benefit as step-therapy to access a covered benefit such as psychotherapy. This would violate the MCO model contract.
• Concerns about the evidence base required for FDA clearance of these technologies

In the end the Committee concluded: “The Evidence Based Benefits Review Advisory Committee does not recommend pursuing New York State Medicaid coverage of the digital therapeutic ‘Freespira’ for the treatment of panic disorder or PTSD at this time.”

Pricing: During the discuss, the policymakers noted that Freespira is available on GSA Advantage, the US General Services Administration online marketplace for government agencies, for $2,750.

Here’s a quick recap of the Canvas Dx portion of the discussion: The Committee aimed to figure out whether:

• there was sufficient high-quality evidence demonstrating the effectiveness of Canvas Dx as a diagnostic aid for identifying autism spectrum disorder in young children; and
• whether the evidence supported coverage of the treatment.

Here are a few excerpts from the meeting’s minutes that are helpful to understand the shape of the discussion and the particular concerns the policymakers had with Canvas Dx’s body of evidence:

• The shortage of developmental pediatricians and other clinicians who can diagnose autism spectrum disorder which leads to long wait times for assessment and delays in accessing treatment
• Questions about the training provided to the non-experts who review the videos as part of the Canvas Dx process
• Concerns that Canvas Dx is a diagnostic aid and is not sufficient to make a definitive diagnosis of a condition; use of Canvas Dx may not eliminate the need for a comprehensive diagnostic assessment
• Concerns about access to early intervention, and that the current early intervention system is inadequate to provide services for all children who need them. There was recognition that coverage of Canvas Dx would not solve that problem
• Concerns about the machine learning algorithm used in Canvas Dx and evidence that the algorithm performs better with white male children and may exacerbate health equity considerations
• Comment that the use case for this test might be in excluding a diagnosis of autism spectrum disorder because of the high negative predictive value of the test
• Concerns about updates to software in digital health technologies and how changes to technology can be addressed by the EBBRAC

As above with Freespira, the committee concluded with a similar verdict on Canvas Dx: “The Evidence Based Benefits Review Advisory Committee does not recommend New York State Medicaid coverage of the digital therapeutic ‘Canvas Dx’ as a diagnostic aid for Autism Spectrum Disorder in children at this time.” Pricing: The committee members shared that the average wholesale price for Canvas Dx is $2,280 per evaluation.

Bayer buys Cara Care but doesn’t mention Mahana Therapeutics’ insolvency as the reason

E&O was the first to report on Mahana Therapeutics’ insolvency back in October. This past week saw the first asset sale to come out of that: Bayer announced it had acquired HiDoc Technologies, the maker of irritable bowel syndrome app Cara Care, which is available on Germany’s DiGA formulary for €248.00 for 90 days of use. Weirdly, Bayer’s press release announcing the deal didn’t make any mention of the fact that it acquired the HiDoc assets from Mahana Therapeutics, which had acquired HiDoc back in March 2024. Another odd thing about the Bayer announcement, which makes sense if you know about Mahana’s insolvency, is that Bayer said it “plans to acquire” HiDoc in the spring of 2025. Why then? That’s when Mahana’s insolvency proceedings will start to come to a close. The company gave notice that anyone looking to make a claim had until March 3, 2025. (March 20, 2025 is the first day of spring, in case anyone was wondering.) Mahana Therapeutics’ flagship offerings were an FDA-cleared prescription digital therapeutic for irritable bowel syndrome called Mahana IBS and a digital therapeutic focused on treating tinnitus called Mahana Tinnitus. The list of potential buyers of either of those assets can’t be too long. Any guesses? Mahana’s founding team? Pear’s did that. Oshi for the IBS asset? Or is this recent announcement a sign that Bayer ends up buying it all?

Speculating on AppliedVR’s new FDA 510(k)

AppliedVR, which already has a De Novo clearance for its RelieVRx virtual reality-based prescription digital therapeutic for chronic lower back pain, recently secured a new 510(k) clearance as a follow-up that might expand the indication for use for its RelieVRx device. The company hasn’t announced the new market authorization and the FDA has yet to post a summary document explaining what changed. Notably, the clearance only took the company about one month, which suggests a minor change to RelieVRx — perhaps a different virtual reality headset — or the addition of a similar indication that is closely related to chronic lower back pain. AppliedVR’s pipeline had previously indicated it was working on digital therapeutics focused on:

• post-operative pain management following total knee replacement,
• cancer-related anxiety
• fibromyalgia
• rheumatoid arthritis

Here’s why I suspect the recent 510(k) expands the indication for RelieVRx to include post-operative pain management following total knee replacement. Originally, AppliedVR’s chronic lower back pain program was named EaseVRx. That was the name of the device when it received the De Novo clearance. It changed the name to RelieVRx, which was the name of its post-operative pain management digital therapeutic candidate at the time. Seems likely RelieVRx will now include both of those indications. (I’ll update when the news breaks.)

How pricing for Big Health’s Sleepio and Daylight vs Sleepio and DaylightRx is shaping up so far

Last week’s update to the pricing database got me thinking about Big Health’s various prices (and suggested prices) for its insomnia program, Sleepio, and anxiety program Daylight. I tracked the company’s early DTC pricing in my report last year through its employer pricing up to the present. In recent years it has begun to pursue a prescription digital therapeutic distribution channel, following its successful bid to get the FDA to clear both of its flagship programs. Here’s a recap and a bunch of notes on Big Health efforts around pricing to date. Obviously, this strategy is still playing out. Time will tell if the pursuit of FDA market authorization will be worth it for the company… Let’s start with an excerpt from E&O’s Big Health report back in 2023:

US employer pricing

Big Health typically charges customers $400 per program participant that enrolls in its programs Sleepio and Daylight. Amongst the many digital health companies courting self-insured employers these days, participation-based pricing seems to be the current preferred way to charge for employee benefits programs.

NHS suggested pricing in the UK

In the UK, NICE published an analysis that recommended Sleepio as long as the price was right: “At a price of £45 per person, Sleepio is cost-saving compared with usual treatment in primary care. This is based on an analysis of primary care resource use data before and after Sleepio was introduced in nine GP practices. Healthcare costs were lower at 1 year, mostly because of fewer GP appointments and sleeping pills prescribed.” £45 per person is about $56. In recent years, Big Health pursued and secured FDA clearances for its two flagship offerings, Sleepio and Daylight (now SleepioRx and DaylightRx). The company then led the charge to convince CMS to create new billing codes that fit the company’s new prescription digital therapeutic business model.

How Big Health suggested CMS price the new Digital Mental Health Treatment G Codes in the Physician Fee Schedule 2025

In its letter to CMS over the summer about how CMS should price the new G codes for digital mental health treatment devices, Big Health said it had submitted invoices to support the cost of supplying the DMHT device at a pricepoint of around $800. In the final PFS, CMS ultimately decided not to set a national payment price for the supply code. It sent the G Code to the MACs to decide the reimbursement amount (if they choose to). This is likely the big unanswered question for Big Health — where will payment for these codes land among the various MACs? We’ll have to wait and see on this one.

How Big Health suggested CMS price the new Digital Mental Health Treatment G Code in the Hospital Outpatient Prospective Payment System (OPPS)

In its letter to CMS over the summer commenting on the agency’s plans for OPPS, which typically include higher payment rates because they are billed by outpatient care clinics, Big Health recommended “that CMS assign code GMBT1 to APC 1511–New Technology Level 11–with a CY 2025 proposed payment rate of $950.50.” In its final OPPS payment schedule, CMS assigned the new supply code for digital mental health devices to APC 5012 (Clinic Visits and Related Services), which — if I’m following it correctly — typically means a payment rate of about $89 for 2025.

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