Issue 217

Welcome back to E&O: PDTs, a paying subscribers-only weekly newsletter focused on the world of digital pharma products and FDA-regulated digital health.

 E&O: Rx Digital Therapeutics

Here are a few quick bullets on things happening in FDA-regulated and pharma-focused digital health:

• As part of its pitch to CMS for a new S Code to make billing easier for its telehealth devices, TytoCare submitted a letter from Elevance Health (formerly known as Anthem) that included details on the companies’ partnership. Elevance wrote: “During the last three years, our members have had access to the Tyto product and associated service, and more than 17,000 Tyto products have already been distributed to eligible recipients. We expect these numbers to significantly increase in the near future, and therefore this new code will help to streamline the billing and reimbursement process, improve transparency, and reduce errors and rejections.” I’m not sure if the 17,000 figure refers to Tyto kits or the individual devices within each kit, but a TytoCare exec also said during the meeting that the typical price for each Tyto participant is $180 per year. So, if that math holds then 17,000 x $180 per year = about $3 million over three years from the Elevance deployment. (Just a reminder: The HCPCS committee initially rejected Tyto’s application for an S Code, so we will have to see if their argument and Elevance’s backing convinced them to change their mind. More from the HCPCS meeting below.)
• According to Floreo, a company that is developing virtual reality-based therapy for autism, the FDA has granted it Breakthrough Device Designation and acceptance into the agency’s Total Product Life Cycle Advisory Program (TAP Program).
• Fun bit of trivia I learned recently after poring through some court documents: Blood pressure device-maker Omron has a 27 percent stake in ECG hardware and software company Alivecor. I knew Omron was a backer, but it has a bigger chunk of the company than I expected.
• Sound Health Systems secured a De Novo clearance from the FDA for its “AI-enabled acoustic resonance therapy designed to treat nasal congestion resulting from allergic and non-allergic rhinitis.” An earlier description of the product from 2021 explained it with less jargon: “The current product is an app that scans your face to map your bone structure and then a headband that plays music at personalized frequencies for 10 minutes.” The company’s website hasn’t been updated to reflect the market authorization yet.
• Nanowear received a 510(k) clearance that looks to expand its wearable vital signs platform to make claims around blood pressure sensing. The name of the newly cleared devices is “SimpleSense-BP” and a companion app. Here’s how the company described its offering prior to this clearance: “SimpleSense is an FDA-cleared remote diagnostic platform. The non-invasive undergarment monitors multiple patient vitals such as heart rate and sounds, respiration rate, lung volume, and physical activity.”
• German regulators added another digital health app to its national formulary for reimbursed digital health programs (DiGA) from Germany-based Mindable Health. “Mindable: Social Phobia is a digital health application aimed at people aged 18 and over who suffer from the symptoms of social phobia.” It has been provisionally listed for one year and priced on the high end at €765.00. There are currently 50 digital health programs listed and six that have been removed from the formulary over the years.

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Epilogue: Pear Therapeutics’ two main prescription digital therapeutics bought by a virtual clinic

The news you know: Pear Therapeutics’ flagship assets, its FDA-cleared prescription digital therapeutics reSET (substance use disorder) and reSET-O (opioid use disorder), have been acquired — again.

Secondhand buyer: Aspiring national virtual clinic PursueCare, which provides remote addiction treatment, has snapped up the assets as part of a recent fundraising transaction (more on that below). STAT reported that PursueCare also acquired Pear’s still-in-development alcohol use disorder digital therapeutic, reSET-A, as part of the deal.

About a year before going bankrupt, back in April 2022, Pear announced that PursueCare would be its first virtual clinic partner — a new channel for Pear’s struggling PDT business.

However, as far as I can tell, Pear’s agreement with PursueCare was not among the contracts listed as assets for sale in the company’s bankruptcy proceedings.

Remember, this news comes months after it emerged that Harvest Bio LLC, the (briefly) mysterious buyer of this tranche of Pear assets was actually Pear’s former CEO and co-founder Corey McCann. (See Issue 195: “Pear bought Pear” for more on that.) McCann teamed up with former Pear executive Michael Langer to form Harvest Bio LLC and buy back these core Pear assets for just $1.65 million in cash. PursueCare announced that it had acquired the assets for reSET and reSET-O from Harvest Bio as part of a transaction that also included a new $20 million round of funding co-led by the venture firm T.Rx Capital, which McCann and Langer also run. (The announcement describes T.Rx Capital as the fund by the family office of Moderna-founder Bob Langer — Michael’s father.)

PursueCare’s progress to date: “The proceeds will support our ongoing collaborative care initiatives with health systems across 11 states, and expansion into value-based care with Medicaid managed care and other health plans. The company has grown over 100% year-over-year and anticipates reaching profitability in mid-2024.” PursueCare is using some of the funds from McCann, Langer (and others) to buy the Pear assets from McCann and Langer: “As part of this financing, we also acquired assets that were previously developed by Pear Therapeutics, including reSET and reSET-O.”

PDTs pivot to virtual clinics: This move by two former Pear execs is another example of prescription digital therapeutics abandoning their original go-to-market strategy in favor of a national virtual clinic model. E&O has written about this a few times before:

• Suicide treatment-focused prescription digital therapeutics company Oui Therapeutics spun out a separate startup, Vita Health, to set up virtual clinics that use some components of Oui’s therapeutic programs to care for patients.
• Swing Therapeutics secured a De Novo clearance for its fibromyalgia-focused prescription digital therapeutic, Stanza, but it has begun setting up its own Swing Care virtual clinics in a state-by-state rollout to distribute the PDT and provide care for fibromyalgia patients.

While the companies above likely made these moves after watching Pear Therapeutics’ struggles, the fact that Pear’s former CEO and co-founder decided the ideal buyer for Pear’s flagship assets was a virtual clinic company is a telling epilogue for this most recent era of prescription digital therapeutics.

What about Harvest’s remaining Pear assets? McCann and Langer didn’t just acquire Pear’s reSET line of products. They also paid $50,000 for Pear’s assets focused on a major depressive disorder intervention; $50,000 in cash for its assets focused on schizophrenia (Pear-004), multiple sclerosis and depression (Pear-006), and other pipeline assets; plus $180,000 for its distribution technology PearConnect. I can imagine the PearConnect technology would be useful to PursueCare, but the other assets focus on therapeutic areas outside of the virtual clinic’s current scope of practice. Curious if these assets end up going to other virtual clinics or if they fade into obscurity.

Natural Cycles and Axena Health (Leva) ask CMS to tweak the language of their HCPCS codes

A month ago in Issue 215, E&O reported on the initial recommendations of the CMS HCPCS Committee going into the group’s meeting at the end of November. At the time, TytoCare’s submission had received a preliminary rejection while Natural Cycles and Axena Health (Leva Pelvie Health System) both received tentative greenlights. During the meeting representatives from all three companies made their case. As noted in the top section of this newsletter, Tyto tried to convince the group to create an S Code to make billing easier for the company, but Natural Cycles and Axena both attempted to convince the committee to tweak the descriptions of their requested codes to be more specific to their products.

Natural Cycles argues using the term “fertility” and billing “per course of treatment” are problematic for its new billing code Fertility:

The company told the group that at the FDA the term “fertility” is used in the context of facilitating a pregnancy while “contraception” is used in the context of preventing a pregnancy. Natural Cycles is asking for a billing code focused on contraception so that is the more appropriate term. Payers, including Aetna, which is one that Natural Cycles cited in their presentation, use the term “contraception” in their coverage policy documents when referring to Natural Cycles. Per course of treatment: Natural Cycles explained that since they sell subscriptions on an annual plan, a billing code that uses the language “per course of treatment” wouldn’t work for their business model. Again, the company showed that Aetna refers to “one annual subscription” to Natural Cycles as the language it uses in its coverage policy document. The committee had no questions for Natural Cycles following their pitch.

Axena Health argues its billing code should use the language “pelvic floor muscle treatment” instead of “biofeedback”

Axena’s counsel and a payer partner from Point32 cited a concern that the term “biofeedback” was not specific enough to exclude any number of devices that don’t make a treatment claim. The HCPCS committee said it was focusing on the Leva’s mechanism of action, as described in its 510(k) summary document from the FDA:

Axena suggested the committee instead focus on the language in the device’s indications for use statement, which makes no mention of “biofeedback”.

Trials: Janssen’s Care4Today for heart patients, Big Health’s GAD study, Kaiser’s reSET-O study

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

Big Health’s GAD study logs primary completion last month 

This Big Health-Boston University trial with 351 participants is set to be all finished in February. More:

Kaiser’s reSET and reSET-O study is back on

This study seemed to be put on hold while the fate of reSET and reSET-O was in flux following Pear’s bankruptcy earlier this year. Originally the researchers aimed for a primary completion in March 2023 but it’s been pushed back a year until March 2024. More:

Now recruiting: Janssen’s Care4Today heart patient study

This study, which is in partnership with HCA Research Institute, doesn’t include too many details in its listing. The researchers are anticipating 300 participants. More:

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