Digital Therapeutics Market

The current opportunity for curative digital solutions is prominent, representing nearly 70%-80% of the total market share of the digital therapeutics

-- Founder and CEO, a UK based small-sized company

Digital Therapeutics Market Overview

The global digital therapeutics market is anticipated to grow at a compound annual growth rate (CAGR) of 20% during the period 2022 – 2035 and is expected to be worth around USD 20 billion by 2035. Digital Therapeutics, popularly known as DTx, represent a digital health solution which delivers medical interventions directly to the patients in order to treat, manage and prevent a disease. Such solutions usually employ evidence based and clinically validated software or technologies, in order to capture real-time / real world patient data and provide improved curative response. Considering the ongoing digitization efforts and transformation of the healthcare sector, digital therapeutics have garnered significant attention from industry stakeholders and investors alike. Further, government organizations have actively undertaken initiatives, such as enactment of legislation, publishing laws and establishment of regulations, in the digital therapeutics industry. For instance, the USFDA sanctioned the Breakthrough Device Designation Program for granting approvals to digital therapeutics. It is worth mentioning that, till September 2022, around 730 digital health products (including digital therapeutics, wellness apps and digital biomarkers) had been approved by the USFDA. A similar trend was observed in other countries, such as the UK, Germany, Denmark and South Korea, where regulatory authorities have published regulations pertaining to digital therapeutics and digital health solutions. The current activity in this market and the growing demand for such solutions will drive the market growth during the forecast period.

Key Market Insights

The Digital Health Market: Focus on Digital Therapeutics (3rd Edition), 2023-2035: Distribution by Type of Solution (Software Solution, Gaming Solution and Combination Solution), Type of Therapy (Curative and Preventive), Purpose of Solution (Medication Replacement and Medication Augmentation), Type of Business Model (B2B and B2C), Target Therapeutic Area (Cardiovascular Disorders, Chronic Pain, Mental Health Problems, Metabolic Disorders, Neurological Disorders Respiratory Disorders, Sleep Disorders, Substance use Disorders and Other Disorder) and Key Geographical Regions (North America, Europe, Asia, Latin America, Middle East and North Africa, and Rest of the World): Industry Trends and Global Forecasts, 2023-2035 report features an extensive study of the current landscape, market size and future opportunity, offering an informed opinion on the likely adoption of digital therapeutic solutions in the healthcare industry, over forecast period. The report features an in-depth analysis, highlighting the capabilities of various stakeholders engaged in this domain. The report answers following key questions related to this domain.

Key Advantages and Growing Demand for Digital Therapeutics

Owing to their multiple benefits, including ease of access, shorter development timelines, versatile delivery platforms, decreased cost of treatment, personalized treatment options, enhanced medication adherence, promotion of healthy lifestyle and remote access to healthcare providers for patients and vice versa, digital therapeutics have emerged as a promising alternative to conventional medication. The benefits offered by these solutions and the growing demand for remote and digital solutions across the world, post the pandemic, will drive market growth in the long term.

Global Digital Therapeutics Market Landscape

The digital therapeutics market landscape features an extensive list of more than 150 large, mid-sized, small and very small players. It is worth highlighting that over 400 digital therapeutic solutions are presently available in the market / being developed by several industry stakeholders for various target indications. It is also worth noting that majority (more than 100) of the approved / under development digital therapeutic solutions target mental health problems. Within the mental health area, indications like stress, anxiety and depression are mainly targeted by the companies. This is followed by solutions targeting neurological and metabolic disorders.

Key Drivers Behind the Digital Therapeutics Market Growth

The COVID-19 pandemic, coupled to the subsequent enforcement of mandatory social distancing measures, has created an enormous demand for remote patient engagement. Further, the evolving regulatory and clinical settings around the world have created an ample opportunity for industry stakeholders. In addition, regulatory authorities and government bodies have provided considerable support for digital therapeutics over the past few years. Moreover, the growing interest of investors in this market can be validated by the significant rise in funding activity in the recent past. Additionally, various big pharma players have undertaken several key initiatives, including strengthening their product portfolio, entering into strategic deals and making significant financial investments. Considering the active involvement of well-established industry players, the new entrants, as well as big pharma players and government organizations, the development pipeline of digital therapeutics is likely to grow further, over the forecast period. Furthermore, rising incidence of chronic diseases and associated healthcare costs will drive the adoption of digital disease management as more data pours in proving the efficacy of such devices. As per the National Center for Chronic Disease Prevention and Health Promotion, chronic diseases like diabetes, cardiovascular disease and stroke, Alzheimer’s, cancer, obesity and arthritis are some of the leading indications that account for a huge proportion of healthcare expenditure in the US. 

Overall Digital Therapeutics Market Size

Driven by the rising interest in digital and remote health solutions, the future opportunities and growth associated with the digital therapeutics, the global market is anticipated to grow at compound annual growth rate (CAGR) of 20% during the period 2022 – 2035 and is expected to be worth around USD 20 billion by 2035. Specifically, in terms of type of product, this global market is anticipated to be driven by standalone software applications based digital therapeutics, which target metabolic disorders. Diabetes management through digital therapeutics has garnered a lot of attention, with at least six prescription digital therapeutics approved in the US. All these six products received 510(k) clearance and require a prescription from a clinician.

North America Holds the Largest Digital Therapeutics Market Share

In addition to this, presently, close to 90% of the market is captured by players based in North America and Europe. A bill, Access to Prescription Digital Therapeutics Act of 2023, was introduced in the Senate in March 2023; when passed, it will expand the coverage of prescription digital therapeutics and, hence, their adoption in the US. However, in the long term, the digital therapeutics market in Asia is anticipated to grow at a relatively faster pace during the forecast period. Rising incidence of chronic diseases like diabetes, increasing use of smartphones and access to improved internet services will be the key market drivers.

Leading Digital Therapeutics Companies

Examples of key players engaged in digital therapeutics market (which have also been profiled in this report) include (in alphabetical order) Ampersand Health, Akili Interactives, Better Therapeutics, Brain+, Click Therapeutics, CogniFit, GAIA, Healios, JOGO Health, Jolly Good, KORE Digital Health Therapeutics, Livongo Health, Lucid, MedRhythms, Pear Therapeutics, Redicare Control, Susmed, The Learning Corp, Voluntis and WellDoc.

Recent Developments in Digital Therapeutics Market

Several recent developments have taken place in the field of digital therapeutics. We have outlined some of these recent initiatives below. These developments, even if they took place post the release of our market report, substantiate the overall market trends that have been outlined in our analysis.

• In August 2023, Mahana Therapeutics entered into a distribution and marketing agreement with Consumer Health division of Bayer to commercialize digital therapeutics to facilitate greater control over patient’s personal health through digital solutions. 
• In July 2023,  Big Health announced the acquisition of Limbix with an aim to strengthen its portfolio by including SparkRx for the treatment of adolescent suffering from depression and anxiety. 
• In June 2023, Kaia Health launched Angela, a HIPAA-compliant, AI-powered voice-based digital care assistant, companion, and guide with the aim to enhance physical therapy experience of the patients.

Scope of the Report

Global Digital Therapeutics Market: Market Segmentations.

Key Report Attributes	Details
Forecast Period	2023 – 2035
Type of Solution	Standalone Software Application, Software Application + Device, Software Application + AI Support, Software Application + Personal Coach, Software Application + Device + AI Support, Software Application + Device + Personal Coach and Others
Type of Therapy	Curative Solutions, and Preventive Solutions
Purpose of Solution	Medication Replacement and Medication Augmentation
Type of Business Model	B2B and B2C
Therapeutic Area	Cardiovascular disorders, Chronic Pain, Mental Health Problems, Metabolic disorders, Neurological disorders, Respiratory disorders, Sleep disorders, Substance use disorders and Other disorders
Key Geographical Area	North America, Europe, Asia, Middle East and North Africa, Latin America and Rest of the World

The report features an in-depth analysis, highlighting the capabilities of various stakeholders engaged in digital therapeutics industry. Amongst other elements, the report includes:

• An executive summary of the key insights captured during our research, offering a high-level view on the current state of the digital therapeutics market and its likely evolution in the short to mid and long term.
• A brief introduction to important concepts related to digital therapeutics, featuring information on various types of digital therapeutics and its primary applications in the healthcare domain. Further, this chapter features details related to the recent advancements that have been reported in this market space.
• An overview of the current market landscape of digital therapeutics solutions, including information on status of development, type of solution (combination offering of software application and device or AI or personal coach, and standalone software application), type of therapy (curative and preventive), purpose of solution (medication replacement and medication augmentation), target indication(s), therapeutic area and target population. In addition, it presents details related to the companies engaged in developing digital therapeutics solutions, highlighting their year of establishment, company size, type of business model (B2B and B2C) and location of their headquarters.
• An in depth analysis, highlighting the contemporary market trends, using three schematic representation, including a 4-D bubble analysis for comparing the leading players engaged in the development of digital therapeutics solutions (based on the parameters, such as product portfolio strength, number of target indication(s) and company size), an insightful tree map representation of the digital therapeutics solutions (distributed on the basis of therapeutic area and company size), and a world map representation (highlighting the regional distribution of developer companies).
• A detailed product competitiveness analysis of digital therapeutics solutions that are available / under development for the most popular therapeutic areas, taking into consideration strength of the product portfolio (based on the number of digital therapeutic solutions being developed for that therapeutic area) and key product specific parameters, such as status of development, type of solution, type of therapy, prescription requirement and purpose of solution.
• Elaborate profiles of prominent large, mid-sized and small players that are either engaged in the development or have developed digital therapeutics solutions. Each company profile features a brief overview of the company (including information on year of establishment, number of employees, location of headquarters and key members of the executive team), details related to their respective product portfolio, recent developments and an informed future outlook.
• An analysis of completed, ongoing and planned clinical studies of digital therapeutics, various relevant parameters, such as trial registration year, trial phase, number of patients enrolled, study design, trial recruitment status and trial focus, type of organization, and regional distribution of trials. In addition, it features an insightful clinical end-points analysis (for top ten recent initiated trials for popular therapeutic areas).
• An analysis of funding and investments received by companies engaged in the digital therapeutics’ market, during the period 2016-2022, including grants, debt financing, seed funding, venture series, initial public offering, secondary offerings, private placements and other equity.
• An in-depth analysis of partnerships that have been inked between various stakeholders during the period 2016-2022, covering marketing and distribution agreements, mergers / acquisitions, pilot product offerings, product / technology integration agreements,  product / technology licensing agreements, product development agreements, product evaluation agreements, product training agreements, product development agreements, research and development agreements, and commercialization agreements. 
• A detailed analysis of various business models and go-to-market strategies adopted by firms engaged in developing digital therapeutics solutions, highlighting details on various channels adopted by the stakeholders in order to raise awareness and offer access to their proprietary products.
• A Bowman’s clock pricing strategy framework analyzes the competitive position of various companies engaged in this domain, taking into consideration the prices and different features of their products. In addition, it presents an equation devised to calculate the likely price of digital therapeutics based upon their characteristics.
• A detailed market forecast analysis in order to estimate the existing market size and the future opportunity for digital therapeutics developers over the next decade. Based on multiple parameters, likely adoption trends and expected price variations of these products, we have provided an informed estimate of the evolution of the market during the forecast period 2023-2035. The report also features the likely distribution of the current and forecasted opportunity within the digital therapeutics market across type of solution (combination offering of software application and device or AI or personal coach, and standalone software applications), purpose of solution (medication replacement and medication augmentation), type of therapy (curative and preventive), business models (B2C (patients) and B2B (healthcare providers, payers, employers and pharmaceutical companies)), therapeutic area (cardiovascular disorders, chronic pain, mental health problems, metabolic disorders, neurological disorders, respiratory disorders, sleep disorders, substance use disorders, and other disorders), and key geographical regions (North America, Europe, Asia, Middle East and North Africa, Latin America and Rest of the World). In order to account for future uncertainties and to add robustness to our model, we have provided three forecast scenarios, namely conservative, base and optimistic scenarios, representing different tracks of the industry’s growth.
• A detailed assessment of the overall market landscape of women’s digital health solution developers, along with information on their year of establishment, company size, location of headquarters, type of solution(s) offered (applications / software, devices and services), along with their current status of development, product ratings, application area, usage during different stages of pregnancy, purpose of solution and type of end-users. 
• A discussion on affiliated trends, key drivers and challenges, under a SWOT framework, which are likely to impact the industry’s evolution, including a Harvey ball analysis, highlighting the relative effect of each SWOT parameter on the overall digital therapeutics industry.

The opinions and insights presented in the report were influenced by discussions held with senior stakeholders in the industry. The report features detailed transcripts of interviews held with the following industry stakeholders (in alphabetical order of company name): 

• Chief of Staffs to CEO and Strategy Lead, Small Company, UK
• Ex-Chief Executive Officer, Small Company, USA
• Marketing Director, Mid-sized Company, China
• Chief Strategy Officer, Small Company, USA
• Founder and Chief Executive Officer, Small Company, South Korea
• Chief Executive Officer, Small Company, USA
• Chief Commercial Officer, Mid-sized Company, Germany
• Chairman and Chief Executive Officer, Small Company, Switzerland
• Co-Founder and President, Small Company, USA
• Chief Executive Officer, Small Company, USA
• Chief Executive Officer, Small Company, Denmark
• Ex-Chief Executive Officer, Small Company, USA
• Chief Executive Officer, Small Company, France
• Chief Executive Officer, Small Company, USA
• Co-Founder and Chief Executive Officer, Mid-sized Company, USA
• Ex-Communication Manager, Mid-sized Company, France
• Ex-Vice President Marketing, Ex-Senior Manager Consumer Marketing, Ex-Marketing and Public Relations, Mid-sized Company, India
• Founder and Chief Executive Officer, Small Company, UK

All actual figures have been sourced and analyzed from publicly available information forums and primary research discussions. Financial figures mentioned in this report are in USD, unless otherwise specified.

 

Frequently Asked Questions

Question 1: What are digital therapeutics?

Answer: Digital therapeutics, also known as DTx, represent a type of digital health solution which delivers medical interventions directly to the patients, using an evidence based, clinically validated software or a combination of software, in order to treat, manage and prevent a disease or disorder.

Question 2: What are the most popular therapeutic areas being targeted by digital therapeutics?

Answer: Majority (close to 30%) of the marketed / under development digital therapeutic solutions target mental health disorders. This can be attributed to the steep rise observed in THE incident of mental health disorders, such as anxiety, depression and stress, during and post the pandemic, across the globe. It is also worth highlighting that neurological and metabolic disorders are other popular therapeutic areas targeted by the digital therapeutic solutions.

Question 3: What is the likely size of the digital therapeutics market?

Answer: The global digital therapeutics market is anticipated to grow at a compound annual growth rate of 20% over the next 13 years and is expected to be worth around USD 20 billion by 2035.

Question 4: Which region is leading in the digital therapeutics market?

Answer: Currently, North America and Europe collectively hold 80% of the market share. In the long run, the digital therapeutics market in Asia is likely to grow at a relatively faster pace.

Question 5: What are the key factors influencing the price of digital therapeutic solutions?

Answer: Digital therapeutic solutions are priced based on factors, such as complexity, target patient population, cost of development and delivery, competition, perceived value and  regulatory settings. Complex solutions utilizing technologies, such as artificial intelligence or machine learning, may be more expensive. 

Question 6: What is the trend of capital investments in the digital therapeutics market?

Answer: Owing to the lucrative market opportunity associated with digital therapeutics, several investors have collectively invested over USD 20 billion.

Question 7: Which types of partnerships are usually signed in the digital therapeutics industry?

Answer: Commercialization agreements, pilot product offerings and product / technology integration agreements are the most common type of partnership models adopted by stakeholders engaged in the digital therapeutics’ domain.

Question 8: Which marketing strategies are commonly adopted for digital therapeutics?

Answer: Most of the players involved in the digital therapeutics’ domain have adopted the in-bound marketing strategies in order to enhance their company and product visibility. It is worth highlighting that majority of the players have used Facebook, You-Tube and LinkedIn as the most preferred social media platforms for in-bound marketing.