Digital Therapeutics Market

The digital therapeutics market is projected to reach USD 21.9 billion by 2028 from USD 6.1 billion in 2023, at a CAGR of 29.1% during the forecast period. The rapid adoption of digital therapeutics is driven by the rising incidence of chronic diseases, surging investments from venture capital firms, and strategic partnerships between tech companies and healthcare providers. One of the most important factors driving growth is the integration of sophisticated digital technologies like AI/ML, wearables, mobile, etc. For instance, in 2022, Mobile Health (US) launched a fully integrated suite of digital therapeutics (DTx) solutions that offers AI-based communication to deliver evidence-based therapeutic interventions. However, lack of clear regulatory guidelines and slow reimbursement processes coupled with substantial development, maintenance, and upgrade costs pose challenge on the adoption of digital therapeutics solutions in the market.

Digital Therapeutics Market Size, Dynamics & Ecosystem

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Digital Therapeutics Market Dynamics

Drivers: Rising focus on Preventative Healthcare

Primary preventive measures can help prevent or arrest the disease in its earliest stages by promoting healthier lifestyles or immunizing against infectious diseases. Many leading causes of death and disability can be prevented with adequate measures. There is a growing consensus among policymakers, providers, and patients that preventive, behavioral, and lifestyle changes are effective pills or procedures.

In the US, chronic conditions account for ~75% of the USD 3.5-trillion annual healthcare spending (Source: chronicdisease.org and the CMS, 2019). However, these chronic diseases are largely preventable. Government legislation and initiatives, such as the Patient Protection and Affordable Care Act (PPACA) (2010), aim at making preventive care affordable and accessible. Owing to the Act, programs incentivizing preventive treatment options are becoming popular.

Restraints: Reluctance among patients to adopt digital therapeutics

Motivating people to use digital therapeutics and building their confidence is a major challenge faced by digital therapeutics providers. While older and underserved populations show maximum susceptibility to diseases and the highest occurrence rates, they are the least likely to use digital therapeutics products due to low technology literacy levels. Furthermore, the limit of how much behavioral change will be observed with digital therapeutics is still undefined.

The clinical validation and deployment of digital therapeutics are carried out on self-selected or volunteer patients; however, their effect on patients showing resistance is still unknown. Furthermore, it is unknown whether digital therapeutics can be sustained over longer periods; there is little information on total patient retention and long-term outcomes. Many patients still rely on traditional means of diagnosis and treatment and thus show reluctance to adopt these novel therapies. This poses a major challenge to the digital therapeutics market.

Opportunities: Large undiagnosed and untreated population

Despite the availability of highly effective and low-cost treatment options for chronic disorders, a large undiagnosed and untreated population still exists. According to the WHO, many people affected by chronic diseases do not get the required treatment and care. According to WHO, in 2019, over one billion people with hypertension (82% of all people with hypertension worldwide) lived in low and middle-income countries. According to BMC Public health Journal 2022, the overall prevalence rates of undiagnosed, untreated, and undertreated hypertension among older adults in India were 42.3%, 6%, and 18.7%, respectively. Approximately 90% of COPD deaths occur in low and middle-income countries, as they do not get the required treatment. Over 75% of CVD-related deaths occur in low and middle-income countries, primarily due to low/limited access to appropriate care. Often, treatment for these conditions is not integrated into primary healthcare—the only access to medical care across these regions.

Hence, the affected population is deprived of the necessary care. Other factors, such as underdeveloped health delivery systems, a lack of trained personnel, the absence of essential drugs, and the prevalence of traditional beliefs and practices, also lead to a significant untreated population. This population presents ample opportunities for the implementation of digital therapeutics. Since digital therapeutics is delivered online, it is more accessible than conventional treatment solutions and can reach more patients.

Challenges: Lack of awareness and access to digital therapeutics programs in developing countries

Healthcare information technology has witnessed significant growth in developing regions owing to healthcare reforms. However, the IT infrastructure is still inadequate to meet the demands and needs of the increasing population in these countries. Most healthcare professionals (HCPs) highlighted a lack of awareness regarding the availability and benefits of digital therapeutics.

In general, there is a lack of knowledge about the efficacy of digital therapeutics and whether these solutions have robust clinical trial data to support their use. This notion is even more prominent in markets with elevated skepticism and conservatism toward digital technology (e.g., Germany and Belgium). Digital health advancements are currently restricted primarily to economically and socially developed regions. As a result, developing regions lack awareness and access to these technological advancements in healthcare. This condition is more pronounced among the underserved populations in the rural areas of developing countries. Some common barriers include a lack of appropriate knowledge about healthcare, lack of competency for using e-health solutions, lack of digital literacy, limited or no access to the Internet, and an overall lack of awareness of digital therapeutics and its advantages.

DIGITAL THERAPETUICS MARKET ECOSYSTEM

The digital therapeutics market ecosystem comprises entities responsible for the end-to-end workflow of digital therapeutics services. The major stakeholders present in this market include network connectivity providers, infrastructure service providers, platform/service/application providers, hospitals and healthcare systems, employers, healthcare payers, government regulatory bodies and start up companies. The demand continues to grow and expand, especially after the outbreak of the COVID-19 pandemic. Solution and service providers continue to enhance and mature their offerings to add value.

Source: Secondary Literature, Interviews with Experts, and MarketsandMarkets Analysis

Software/Platforms segment is anticipated to garner the highest share during the forecast period.

The digital therapeutics market based on offering is segmented into software/platforms, programs, and virtual reality/games. Software/Platforms is estimated to capture the largest share over the study period. This dominance is driven by the increasing reliance on sophisticated software solutions to deliver therapeutic interventions, reflecting a growing trend toward digital health solutions. The segment's prominence highlights the crucial role of advanced technologies and platforms in shaping the trajectory of the digital therapeutics market.

Business-to-Buisness segment is anticipated to account for the lion’s share of digital therapeutics market, by Sales in 2022.

The digital therapeutics market is divided based on sales channel into business-to-business (B2B), and business-to-customer (B2C). This is owing to the increasing adoption among payers, employers, and providers understanding the benefits of digital therapeutics. Additionally, the inclination of pharmaceutical companies to incorporate digital therapeutics with their drug products is also estimated to drive the adoption of the products within these end-user segment.

Care-related/Treatment applications are the highest share of the digital therapeutics market, by applications in 2022.

The digital therapeutics market is bifurcated based on applications into care-related/treatment and preventive applications. The growth of the care-related/treatment applications segment is owed to the rising economic burden of their treatment, and investments in digital therapeutics to promote the advancement of cost-effective and scalable treatment platforms for these conditions.

North America to lead the digital therapeutics market in 2022.

The segmentation of the digital therapeutics market based on region, encompasses North America, Europe, the Asia Pacific, Latin America, and the Middle East & Africa. As of 2022, North America held the dominant market share, with Europe following closely behind. The accelerated growth in North America is primarily ascribed to increased investments in digital therapeutics, improvements in the reimbursement framework for these solutions, a surge in the number of new startups in the digital therapeutics sector, and government initiatives aimed at promoting technological advancements in this region.

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Key Market Players

Prominent players in digital therapeutics include Noom, Inc (US), Teladoc Health, Inc. (US), Omada Health, Inc. (US), WellDoc, Inc (US), Biofourmis (US), Better Therapeutics, Inc (US), Amalgm Rx (US), CogniFit Inc (US), Headspace Health (US), Propeller Health (US), Virta Health Corp (US), 2Morrow, Inc. (US), Realizedcare (US), Canary Health (US), Twill Inc. (US), Click Therapeutics, Inc. (US), Akili, Inc. (US), Cognoa, Inc (US), Wellthy Therapeutics Pvt. Ltd. (India), Kaia Health (Germany), Ayogo (Canada), Mindable Health GmbH (Germany), Hinge Health, Inc. (US), and Freespira (US).

Scope of the Digital Therapeutics Industry

The research report categorizes the digital therapeutics market to forecast revenue and analyze trends in each of the following submarkets:

By Offering

• Programs
• Software/Platforms
• Virtual Reality/Games

By Revenue Modal

• Subscription
• One time Purchase/Licensing
• Outcome/Value based

By Sales Channel

• B2C
• Patients
• Caregivers
• B2B
• Providers
• Payers
• Employers
• Pharmaceutical Companies
• Other Buyers

By Application

• Preventive Applications
• Prediabetes
• Obesity
• Nutrition
• Lifestyle Management
• Other Preventive Applications
• Treatment/Care-related Applications
• Diabetes
• CNS Disorders
  • Mental Health Disorder
  • Other CNS Disorders
• Chronic Respiratory Disorders
• Musculoskeletal Disorders
• Cardiovascular Diseases
• Smoking Cessation
• Medication Adherence
• Gastrointestinal Disorders
• Substance Use & Addiction Management
• Rehabilitation & Patient Care
• Other Treatment/Care-related Applications

By Region

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Spain
  • Italy
  • Rest of Europe (RoE)
• Asia Pacific
  • Japan
  • China
  • India
  • Rest of the APAC
• Latin America (LATAM)
  • Brazil
  • Mexico
  • Rest of Latin America (RoLATAM)
• Middle East & Africa (MEA)
  • GCC Countries
  • Rest of Middle East & Africa (RoMEA)

Recent Developments

• In May 2023, Noom, Inc. announced a new program, Noom Med, designed to fight the disease of obesity. Noom Med is a program that has offers telehealth services with Noom’s personalized psychological tools for patients enrolling for weight loss.
• In May 2023, Omada Health announced a specialized program enhancement for members taking GLP-1s, in response to the growing interest and demand for the medication.
• In August 2022, Teladoc Health announced a home A1C (hemoglobin A1C) testing program for its Livongo product to help Teladoc Health members manage and control their diabetes via blood glucose meters.
• In April 2021, Welldoc (US) partnered with Dexacom (US). This partnership helped provide BlueStar with Dexcom G6 CGM as a single platform to people with Type 2 diabetes for improved health.

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