How Prescription Digital Therapeutics (PDTs) are disrupting the Pharma and Life Sciences industry

As the shift towards digital solutions increasingly impacts the pharma and life sciences industry, what advantages do PDTs offer over traditional medicine, and how does the development of PDTs impact the value chain? Importantly, how can players adapt to this new reality?

There's a growing acknowledgement that PDTs offer significant advantages to patients over traditional medicine. Firstly, by eliminating the need for medication intake, potential side effects are reduced, and targeted self-directed sessions are promoted. From innovative applications of binaural beats to advanced neuro-feedback techniques, PDTs are set to transform therapeutic practices and patient outcomes through more personalised treatments, often through mobile devices. Based on this potential, the market for PDTS is currently estimated to grow at a CAGR of 20.35% and reach a volume of around USD 17 billion in 2030.

Figure 1: Global market size of PDTs (in bn. USD)[1]

Adapting to a new value chain

In terms of value chain differences between traditional medicine and PDTs, the reduction in medication production and leaner internal and external logistics require less capital-intensive development processes, which traditionally average around US$500,000. There is also the potential to reduce R&D expenses. In addition to not requiring physical production sites, PDTs have shorter R&D cycles compared to traditional pharmaceuticals. For example, the approval period for PDTs is 12 months in Germany, which is significantly shorter compared to the traditional drug approval process. 

From an operational standpoint, PDTs offer additional and significant cost reductions. Without the need to invest in expensive manufacturing infrastructure, distribution and storage, operations can become more streamlined and cost-effective. The expenses for service and maintenance are also dramatically reduced. Realised savings and efficiency improvements free up capital and resources, enhancing patient engagement as well as marketing and sales activities while optimising operational effectiveness.

Figure 2: PDTs’ significant impact on traditional pharma value chains

Addressing the challenges

While the potential benefits are immense, including personalised treatments, improved patient adherence, and a leaner value chain, the challenges are equally significant.

First, to reap the long-term benefits of reduced costs and expenses, the economic viability of PDTs hinges on substantial initial development costs and the establishment of sustainable reimbursement models. Market access and the ability to scale up PDTs are crucial for widespread adoption and financial feasibility. 

Second, integration of these drugs into existing healthcare systems requires a shift in traditional medical practices and comprehensive training for healthcare professionals. All of which require planning and investment.

Third, robust data management and cybersecurity measures are essential to protect sensitive health data against increasing cyber threats, maintain patient trust, and comply with regulatory standards.

Collaborations and partnerships will be essential

In this rapidly evolving landscape, becoming a PDT supplier will require actively pursuing strategic partnerships and acquisitions. Collaborations will be essential to determine the competitiveness of digital drug providers. For instance, strategic partnerships with tech companies are important to gain access to innovative technologies and know-how that enable and foster the development of PDTs. 

Additionally, partnering up with healthcare providers ensures the integration of PDTs into standard care protocols and reimbursement models. Likewise, acquiring digital-native startups provides access to intellectual property and specialised talents to develop and scale PDTs. 

Finally, collaborations with data analytics companies will play a significant role in shaping more patient-centric clinical trials. By leveraging big data and advanced analytics, these companies can help reduce trial timelines, improve patient engagement and lead to more personalised healthcare and pharma solutions.

Next steps?

Transforming your business to reap the benefits and address the challenges of this new landscape requires an approach that assesses what steps you need to take to adapt. For example: 

•  What are the typical payment/reimbursement models within the use of PDTs?

•  What is the capability model of the future to keep pace with technological developments?

•  How can relevant competencies be built up today?

By answering relevant questions, organisations can establish a pathway that informs and develops a robust strategy that embraces a new PDT world.

In the next article in this series, we will explore which actions are necessary to overcome the bottlenecks of development costs and reimbursement.
 

[1] Sources: Data Bridget Market Research (2024): Prescription Digital Therapeutics (Pdtx) Market Size & Statistics By 2030. Retrieved from databridgemarketresearch.com, 5th September 2024.