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Review of Ashton Kutcher’s Tech Crunch Article – How [and why] I invest in startups

I was reading Ashton Kutcher’s outstanding Tech Crunch article on how and why he invests in startups and felt that it aligns with my philosophies regarding how we plan to invest the capital at Hippocrates VC. Unfortunately, it is not a common way that VCs thinks. I am hopeful that more venture capitalists will share Ashton’s philosophy because it would be much more inspiring and helpful to entrepreneurs. You can read the article here: https://techcrunch.com/2018/05/23/how-and-why-i-invest-in-startups/. I have also pasted the text below:

A lot of people ask me how I choose to invest in startups. Stage? Revenue metrics? Sector?

I’m not proactively funding at different stages. I’m proactively funding brilliant people trying to solve hard problems.

Focusing on this simple goal of identifying and enabling amazing entrepreneurs to create a better tomorrow is the crux of my investment strategy.

My startup investment “formula”
A lot of venture funds try to optimize for returns. They run complex ratio economic models to determine what their diluted value will be at the end of the life cycle of the optimal and non-optimal case of every given company.

I don’t do that. I just try to fund the best and brightest.

I love working with the smartest and brightest people in the world on some of the hardest challenges. And oftentimes I make a return as a result of that.

I weigh investments based on two vectors:

Return
Happiness
The primary litmus I put on any investment is on behalf of my LPs. Will the capital have a potential of 6-10x returns in five, eight, 10 years? If not, it’s not going to be worth our time and money.

But it’s not the only factor.

If we’re happy doing the work that we’re doing on behalf of this company and relatively confident that we can return for our LPs, it’s an investment worth making.

It seems counterintuitive, but it actually works — our first fund is showing 8-9x returns.

I’ve had the experience where I’ve lost all my money. But more often than not, I’ve had the other experience.

A lot of companies might not have 100x return, but they have 5-6x return and they’ve solved an important problem. By measuring both the financial return of the investment and the happiness of being a part of that journey, I can holistically gauge the net outcome.

Know what you don’t know
It’s really easy to box yourself out of really great companies by having mathematical guard rails that don’t necessarily hold up over time.

At the time of investment, it can be difficult to anticipate the future products that end up being the largest revenue drivers.

If you had the insight to know that the value they were returning to customers was great enough that eventually they would find a way to monetize it, you would have invested in Facebook.

But if you’re operating on a purely mathematical model, you might not have been able to do that.

I remember sitting down with one of my mentors around eight years ago. He listed 10 companies on a white board and said “rank for me from top to bottom which company you think is the most valuable. Now rank for me from top to bottom which company has the most revenue.”

I had a mix of ones, fives and sevens; whether I thought they were going up or down the list on both sides.

It turns out that the company with the least amount of revenue was the most valuable. And the company with the most amount of revenue was the least valuable.

What I look for in founders
When I make an investment in a startup company, I plan on the likelihood that I’ll end up working with that person for five to 10 years.

I don’t have a magic formula, but there are four important factors that must all check out for me to invest in a founder.

1. Domain Expertise
The best founders have some unique insight in the domain where they’re building a company that gives them some edge. I often find that it’s one of three factors:

Deeper understanding of consumer behavior
Historical insight
Data
There’s usually some initial edge that is really clear and that gives you confidence that they have absolute domain expertise for whatever problem they’re trying to solve.

2. Grit
Founders need some capacity of perseverance through really, really tough situations.

I’ve never heard a single story of someone building a company where everything went the way they thought it was going to go.

And when things don’t go the way you think they’re going to go, will you have the capacity and the willingness and the perseverance to sort of go through it?

This one is difficult to assess, and I generally go by gut instinct on meeting with the founder.

3. Purpose
Is whatever they’re building someway connected to a greater purpose in which they’re personally invested?

Whatever they’re building has some resonance relative to who they are, how they are and what they believe — because belief systems don’t go away when you get into trouble or come across a difficult challenge.

4. Charisma
There’s a level of charisma that many great founders have, especially if they want to be the CEO of their company.

When I meet with a founder with true charisma, I usually come away feeling like I want to quit my job and go work for them. Because if I don’t get that sense or that feeling that I want to quit everything that I’m doing to go work for them, the best person for the job that they are hiring for isn’t going to have that feeling either.

Recruiting is the hardest thing that any CEO has to do.

They have to be able to sell themselves, sell their vision, and sell their company. If they don’t have the charisma to sell it to me, I find it hard to believe that they’re going to be able to sell it to somebody else.

What makes me wary of founders
A founder can do many things to represent themselves poorly, but here are three:

1. Display questionable principles
I’m a very principle-driven person.

I have certain litmuses around gender equality, racial equality and working with good humans. I only want to work with founders and invest in companies that share my principles.

I want to be connected and associated with people who represent their brand in a way that I would represent mine.

It’s so easy to get distracted by the numbers and models and projections — and don’t get me wrong, these are important.

But also, I’m looking at human beings build businesses. I want to work with good people and people who respect other people and people who have good moral fiber.

2. Lack of domain expertise
If the person doesn’t know their numbers it’s an immediate killer.

I often drill down into the domain the founder is working in. There are often brand new, disruptive ideas that I’ve never seen before. It’s easy to get caught up in the excitement of that, but the economics still need to make sense.

If someone doesn’t understand the economics and the motivational drivers within a given sector, it becomes rapidly clear whether or not somebody has domain expertise.

And if they don’t understand the domain and have a unique insight, they’re probably not going to be able to build something special.

3. Lack of respect for time
The biggest key people often forget when they’re busy trying to sell what they’re doing is a basic, human understanding of other people.

Smart people know the right time and the right way to connect with someone.

I’ve answered cold emails from people who are really well-formulated, thought out, respectful of my time and respectful of me.

I’ve taken elevator pitches from people.

I’ve had meetings set up with strangers.

If you know somebody hasn’t even sort of taken the time to consider your time, they’re probably not going to consider the time of other people. And I think that’s going to negatively affect them and their company.

When a founder or company approaches me in a way that’s not considerate and respectful of my time and what I’m interested in, I have a hard time looking past that.

My role as an investor in the growth of a startup
I believe the job of the investor goes way beyond fueling the company with cash. It’s about fueling the company with expertise, intelligence and connectivity.

On paper, growing a startup can roughly be summarized as follows:

Early-stage validation
Have an idea
Crank out an MVP
Get that MVP to customers
Establish feedback loop
Make sure customers appreciate the product
Establish a customer/product development feedback loop so the customer can improve the product
Build a company
Hire to fill initial capacities
Find product market fit
Market product to reach all target consumers
Build teams
Raise more money
Over the last 12 years of being an investor I’ve seen companies at every one of those life cycles. Each one of those transitions is a different discipline; a different challenge in and of itself.

As a founder, I think it’s really important to surround yourself with people who have seen it before, understand it, know what it’s like and know how to persevere through it.

That’s what an investor group does.

For example, going from a bootstrap company into a company that can scale is a tricky discipline.

A lot of founders make the really early mistake of hiring people just like them, instead of hiring people who bring unique diversity and expertise to their team.

And after the initial batch of hires is made, you transition from micromanaging into macromanaging; building startups within your startups, the variable divisions required to properly scale the company.

Investors who have helped companies through similar transitions can help you avoid pitfalls associated with these milestones. These are the very pitfalls that often derail early-stage companies.

Fast-forward to the growth stage and fundraising is a monster in and of itself. You have these checkpoints where you’ve got to go and raise additional funding — and the future of the company relies on executing.

And then eventually you get to the point where either you’re going public or there’s an acquisition. That’s incredibly tricky and not something that a lot of founders are ready for.

Every company’s situation is different.

If you’re a small team — two or three people — you might look to add 10 investors. I recommend building an investment team that has variable experience across different firms and individuals.

A lot of founders only target big firms. But you really want to get the person who understands your needs, your challenge and can help guide you through it — regardless of where they come from.

It all comes back to the purpose and principles
Make no mistake: I have a rigorous process around numbers.

Estimated TAM, IRR, NPV — we run them all.

But when weighed against potential impact for humanity and capability of individuals at the helm, I put slightly more value than most investors.

Maybe in the long run, I’ll fall into an even more disciplined manner of allocating capital.

But for now, I’m just going to keep working with great people on the problems that I want to work on.

Find good people solving tough problems and the financials often sort themselves out.

This post was originally published on Atrium – https://www.atrium.co/blog/ashton-kutcher-investments/

Digital therapeutics startups band together to form new industry group

A group of  health startups in the burgeoning digital therapeutics space have joined together to create a new industry association, the Digital Therapeutics Alliance (DTA).

“Digital therapeutics are re-writing our definition of medicine,” Akili Interactive CEO Eddie Martucci said in a statement. “It’s critical that industry, academia, government, and the medical community work together in the next phase of medical adoption. We’re excited to drive this effort alongside other leaders who share our dedication to rigorous clinical validation and organizational excellence in product development. It is truly a new class of medicine.”

 

The Digital Therapeutics Alliance defines the space as “a new generation of healthcare that uses innovative, clinically-validated disease management and direct treatment technologies to enhance, and in some cases replace, current medical practices and treatments.”

“We encourage the continued growth of this industry through DTA’s work and initiatives,” Sean Duffy, CEO, Omada Health, and DTA Strategic Advisor, said in a statement. “This specialized category of products emerged from the broader digital health category, and commitment to outcome-focused reimbursement.”

Founding members include a number of digital health heavy hitters: Propeller Health, WellDoc, Akili Interactive, Omada Health, and Voluntis. They’ll work together to promote real-world evidence studies and pilot programs, create industry standards and frameworks, and develop shared data repositories.

“Our Alliance is dedicated to advancing novel platforms and solutions that improve patients’ lives and add value to physicians, care teams, and the healthcare system,” Anand K. Iyer, chief strategy officer at WellDoc, said in a statement. “These tools are used in daily life to improve patient and provider visibility into complex treatment processes and simplify pathways to better outcomes.”

Almost immediately after launching, at the Connected Health Conference in Boston, the DTA announced a strategic partnership with the Personal Connected Health Alliance, a non-profit organization that operates as a part of HIMSS (MobiHealthNews’ parent company). The partnership will allow DTA to use some of PCHAlliance’s infrastructure, reach, and resources toward its goals.

“Digital therapeutics is an emerging trend, based on the idea that technology can improve an individual’s health as much as a drug can, as well as increase the efficacy of drug therapies. Digital therapeutics companies are proving, via rigorous clinical studies – and even regulatory approval – that connected health technologies can provide measurable clinical benefit, at least as good as some medication,” Patty Mechael, EVP of PCHAlliance, said in a statement. “We are pleased to partner with the Digital Therapeutics Alliance to combine our resources to advance the field, galvanize key stakeholders, focus on developing standards of quality, and work towards improving health outcomes through this newly developing sub-domain of personal connected health.”

PCHAlliance has also launched a digital therapeutics taskforce, led by Leurent.

“Digital therapeutics are at the forefront of a new era in healthcare,” Voluntis CEO Pierre Leurent said in a statement. “As the entire industry prepares for what’s next, we are excited to represent digital therapeutics in this rapidly evolving environment, working with regulators, patient advocacy groups, providers, payers, and manufacturers.”

Digital therapeutics is a fast-growing field, as evidenced by CMS’ expected approval of digital diabetes prevention programs and the FDA’s recent clearance of Pear Therapeutic’s digital therapeutic for addiction. A recent report from Grand View research says the digital therapeutics market will be worth more than $9 billion in 2025.

“Digital therapeutics will significantly benefit individuals and communities by improving chronic disease care and treatment,” David Van Sickle, CEO of Propeller Health, said in a statement. “DTA actively encourages and supports companies working to develop, trial, and market digital offerings with meaningful clinical benefits.”

Source: Mobihealthnews.com

Digital therapeutics: A new frontier in the management of chronic conditions

Digital therapeutics are digital health management solutions that treat chronic conditions by helping patients make behavioral changes that lead to improved clinical outcomes.

These typically consist of software solutions that can be deployed directly to patients, and are often paired with a coaching service. Digital therapeutics have been effective in producing clinical outcome improvements for several chronic diseases including prediabetes, diabetes, and obesity.

In a new study published in the Journal of Human Hypertension, this approach was shown to be effective in preventing the development of hypertension in individuals who are at high-risk of developing the condition.

“Digital therapeutics gives consumers the option to engage digitally with the health care system,” said Jay Rajda, M.D., MBA, FACP, Aetna’s chief clinical transformation officer and one of the authors of the study. “As we develop more personalized approaches to helping individuals manage their health, digital therapeutics provides the important ability to enable digital engagement. Digital engagement solutions also greatly improve the efficiency of human coaches, and enable us to develop meaningful solutions that we can deploy for prevention of chronic diseases or management of low-risk chronic conditions.”

Prehypertension is a condition where blood pressure is elevated without meeting the definition of hypertension. Prehypertension often leads to the development of hypertension, unless lifestyle changes are made. Researchers of the study, “Efficacy of a mobile hypertension prevention delivery platform with human coaching,” wrote weight loss and a reduction in sodium intake are key ways to reduce the risk of hypertension.

“As Aetna strives to join our members on the journey to achieving personal health goals,” said Hal Paz, M.D., M.S., executive vice president and Aetna’s chief medical officer, “clinically-validated digital health management solutions will be an increasingly important tool in successfully engaging our members.”

For 24 weeks, study participants used a mobile hypertension prevention program to log meals, record their blood pressure at the same time every day, record their weight and receive bi-weekly phone calls from a human coach.

Researchers found participants who used the digital platform had significant short-term weight loss, lowering of blood pressure levels, and reduction in the development of hypertension, as well as higher user engagement.

Technology continues to evolve and devices can make it easier for people to manage their own health. By helping a person to manage their health and reduce their risk for developing a chronic disease, digital therapeutic solutions can also similarly result in cost savings by helping prevent the development of chronic diseases and complications.

The results of the study, Rajda said, provides further evidence that using digital therapeutics focused on the prevention of chronic disease can be effective.

According to the U.S. Centers for Disease Control and Prevention’s estimate, about one-third of American adults have prehypertension, one-third of American adults have prediabetes, and 9.4 percent of American adults have diabetes, but are many are unaware of their diagnosis.

“Chronic conditions represent a tremendous opportunity to improve the health of individuals, improve clinical outcomes and generate cost savings,” Rajda said.

Source: News.aetna.com

Pear Therapeutics Obtains FDA Clearance of the First Prescription Digital Therapeutic to Treat Disease

BOSTON and SAN FRANCISCO, Sept.14, 2017 /PRNewswire/ — Pear Therapeutics, the leader in a new era of prescription digital therapeutics, today announced that the U.S. Food and Drug Administration (FDA) has granted Pear’s De Novo request, allowing the company to market reSET® for the treatment of patients with substance use disorder (SUD) under a new class of treatment. This is the first time that the FDA has cleared a Prescription Digital Therapeutic with claims to improve clinical outcomes in a disease.

reSET - Prescription Digital Therapeutic

“This is a defining moment for digital therapeutics and for patients with substance use disorder,” said Corey McCann, President and Chief Executive Officer of Pear Therapeutics. “As the first FDA-cleared Prescription Digital Therapeutic for disease treatment, reSET® has demonstrated improved abstinence and treatment retention in a randomized controlled clinical study. We believe that prescription digital therapeutics hold promise in improving patient outcomes across a wide range of central nervous system disorders including psychiatry, neurology and pain, and will become a vital part of tomorrow’s treatment paradigm across all disease areas. Pear was impressed by the collaborative approach the FDA took in reviewing this innovative technology.”

reSET® is a 12-week duration, FDA-cleared Prescription Digital Therapeutic to be used in conjunction with standard outpatient treatment for substance use disorder related to stimulants, cannabis, cocaine, and alcohol. reSET® is not intended to be used to treat opioid dependence. The product combines patient-facing interventions and assessments via a mobile device, with clinician-facing dashboards and data analytics on the back-end. reSET® has been proven to increase abstinence from a patient’s substances of abuse during treatment and increase patient retention in the outpatient treatment program. reSET® provides access to self-reported substance use, triggers, cravings and outcomes to the patient’s medical provider.

To support the FDA submission of reSET® (academic name: TES), a National Institute on Drug Abuse (NIDA) –sponsored clinical trial evaluated the therapeutic in 399 patients with SUD across 10 treatment centers in NIDA’s Clinical Trial Network nation-wide over 12 weeks. Patients were randomized to either a standard treatment-as-usual, which consisted of standard face-to-face counseling, or to a reduced amount of face-to-face counseling plus the digital therapeutic. The clinical study demonstrated that the digital therapeutic more than doubled the rate of abstinence compared to standard, face-to-face counseling. In a sub-group analysis of non-abstinent patients at study start, a poor prognostic indicator, patients randomized to the digital therapeutic demonstrated an almost five-fold improvement in abstinence.

“In 2016, an estimated 20.1 million people aged 12 or older needed substance use disorder treatment according to the Substance Abuse and Mental Health Services Administration,” said Edward V. Nunes, MD, Professor of Psychiatry at Columbia University Medical Center and independent Lead Investigator on the clinical study submitted to the FDA. “The clinical outcomes demonstrated in the reSET® pivotal study are remarkable. Clinically-validated digital therapeutics may become a cornerstone of future treatment.”

“reSET® has the opportunity to radically enhance the treatment options for patients with substance use disorder. These digital therapeutics equip clinical professionals with the ability to provide more immediate and convenient care to their patients,” said Advisory Board Chairman for Pear Therapeutics and Former Congressman, Patrick J. Kennedy. “I am proud to support Pear Therapeutics and their commitment to develop technologies for those living with mental health and substance use disorders.”

About Substance Use Disorder (SUD)

In 2016, approximately 20.1 million people aged 12 or older had a substance use disorder (SUD) related to their use of alcohol or illicit drugs in the past year. Abuse of and addiction to alcohol, nicotine, and illicit and prescription drugs cost Americans more than $700 billion a year in increased health care costs, crime, and lost productivity, and contribute to the death of more than 90,000 Americans.

reSET® Indications for Use

reSET® is intended to provide cognitive behavioral therapy, as an adjunct to a contingency management system, for patients 18 years of age and older who are currently enrolled in outpatient treatment under the supervision of a clinician. reSET® is indicated as a 12-week prescription-only treatment for patients with substance use disorder (SUD), who are not currently on opioid replacement therapy, who do not abuse alcohol solely, or who do not abuse opioids as their primary substance of abuse. It is intended to:

  • increase abstinence from a patient’s substances of abuse during treatment, and
  • increase retention in the outpatient treatment program.

Full prescribing information can be found at www.peartherapeutics.com.

About Prescription Digital Therapeutics

Prescription digital therapeutics are clinically validated, FDA-cleared software applications that demonstrate safety and efficacy in randomized clinical trials to improve patient outcomes. They are designed to enhance clinical outcomes, and where clinically relevant may be combined with current treatment regimens including approved drug or device therapies. Prescription digital therapeutics usually include patient-facing applications, clinical assessment and outcomes tracking, clinician monitoring dashboards and HIPAA-compliant data storage.

About Pear Therapeutics

Pear Therapeutics is the leader in FDA-cleared Prescription Digital Therapeutics. The company’s approach is to integrate clinically-validated software applications with previously approved pharmaceuticals and treatment paradigms to provide better outcomes for patients, smarter engagement and tracking tools for clinicians, and cost-effective solutions for payers. Pear’s lead product, reSET®, is an FDA-cleared 12-week interval prescription therapeutic for Substance Use Disorder (SUD) to be used as an adjunct to standard, outpatient treatment. Pear’s product development pipeline includes reSET®-O™ for opioid use disorder (OUD) and additional prescription digital therapeutics in schizophrenia (Thrive™), combat posttraumatic stress disorder (reCALL™), general anxiety disorder (reVIVE™), pain, major depressive disorder, and insomnia, for which Pear intends to obtain FDA clearance. For more details, please see www.peartherapeutics.com.

Source: Prnewswire.com

Digital Therapeutics Market Worth $9.4 Billion By 2025 | CAGR: 21.0%

The global digital therapeutics market is anticipated to reach USD 9.4 billion by 2025, according to a new report by Grand View Research, Inc. The growth of the market is catapulted by increasing incidences of chronic diseases, increasing emphasis on preventive healthcare, the need to curb healthcare expenditures, and added benefits offered by digital therapeutics. Rise in number of venture capitalists that are investing in the market is another factor that is accelerating its growth.

Digital therapeutics, commonly known as software-for drugs has been gaining much attention due to the number of benefits it offers to patients that utilize it. Continuous monitoring of patient’s vital stats, ability to ensure adherence to medications, prompt reminders are some of the most important benefits offered by digital therapeutics.

With an increase in the internet usage and dependency over smartphones, digital therapeutics offers easy tracking and monitoring of patients and their vital stats without intervention. This serves in a discrete and non-interventional manner to persuade individuals to adopt healthier lifestyles and improve physical well-being. Captivating design, extended assessment, and digital tracking are features that are attributing to increasing adoption of digital therapeutics by patients, employers, providers and others.

The North American region contributed to the largest market share owing to technologically advanced medical infrastructure and successful execution of ambulatory health in their healthcare system. Emerging countries like India, China and Brazil are also expected to flourish during the forecast period owing to adoption of enhanced healthcare infrastructure and medical technologies to curb the prevention of chronic diseases.

 To request a sample copy or view summary of this report, click the link below:
http://www.grandviewresearch.com/industry-analysis/digital-therapeutics-market

Further Key Findings From the Study Suggest: 

  • The global digital therapeutics market size was estimated at $1.7 Billion in 2016 and is expected to grow at 21.0% CAGR from 2017 to 2025
  • Diabetes is expected to gain the largest market share on the basis of application owing to increasing incidence rates globally and preventive steps taken to reduce them
  • Obesity is also expected to account for a considerable market share due to various healthcare reforms to curb the disease initially and prevent further costs associated with the disease
  • The adoption of digital therapeutics offers reduction in healthcare costs associated with diseases like diabetes and obesity and are thus being used on an increasing scale
  • Digital tracking, continuous monitoring, and management of physical activity and eating habits are factors that are propelling the growth of the market
  • Increasing usage in preventive areas for a wide range of diseases and disorders like respiratory disorders, CVD, and CNS disease are attributes that are bringing about growth of the market
  • Patients accounted for the largest market share in the end-user’s segment owing to user-friendly interface and effective management of diseases
  • The North American region accounted for the highest revenue owing to technological advancement and healthcare expenditure to curb rise in number of chronic diseases
  • The Asia Pacific region is expected to garner considerable growth during the forecast period owing to increasing adoption of advanced healthcare technologies and rise in number of chronic diseases

Grand View Research has segmented the global digital therapeuticsmarket on the basis of application, end use, and region:

Application Outlook (Revenue, USD Million; 2014 – 2025)

  • Diabetes
  • Obesity
  • CVD
  • CNS Disease
  • Respiratory Diseases
  • Smoking Cessation
  • Others

End-use Outlook (Revenue, USD Million; 2014 – 2025)

  • Patients
  • Providers
  • Payers
  • Employers
  • Others

Regional Outlook (Revenue, USD Million; 2014 – 2025)

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • UK
  • Asia Pacific
    • China
    • India
  • Latin America
    • Brazil
    • Mexico
  • MEA
    • South Africa

 

Source: Grand View Research

How Digital Therapeutic Tech is Revolutionizing Personal Health

Millions of Americans’ health is at risk today, but there is an easy solution – technology. Consider that 75 million Americans have hypertension according to the Center for Disease Control and Prevention. An additional one in three Americans have prehypertension- blood pressure numbers that are higher than normal. Patients with prehypertension can make lifestyle changes to lower blood pressure naturally and prevent full blown hypertension.

But for most people behavior change is hard. Behavior change is possible though, if it is easier for individuals to measure and track progress.

That’s where an emerging category of health technology called digital therapeutics comes in. Digital therapeutics, commonly defined as technology that can improve a person’s health equal to a drug, but without the same costs and side-effects, can empower individuals to change their behavior and improve their health. With the use of digital therapeutics individuals can manage chronic conditions and try alternate treatments to accompany or even replace pharmaceuticals.

Here are three examples of Consumer Technology Association (CTA) member companies making a difference in lives with digital therapeutics:

2breathe Technologies created RESPeRate, a solution for individuals to manage hypertension through timed breathing exercises that naturally lower heartrate and blood pressure. Remember being told to breathe slowly and count to ten when you are stressed? That could have been the best advice you ever received if you’re hypertensive.

Livongo, created a glucose meter and diabetes monitoring system that gives patients a connected platform with real-time coaching to prevent diabetic episodes and adjust insulin levels to improve health and well-being. The ability to control how you feel when you’ve been diagnosed with a disease that makes you feel powerless is unbelievably powerful.

Quell has developed a FDA approved drug free solution to treat chronic pain. Through advanced neurotechnology, Quell taps into the user’s natural pain relief response. The Quell app allows patients to track progress, change therapies and understand their treatment in real-time. Delivering pain management without the use of opioids could save thousands of lives.

These solutions are game changers and the key is patient empowerment. Empowerment isn’t limited to the patient though, digital therapeutics also empower doctors with real time patient generated data and in some instances, lifesaving information. CTA’s research shows that the U.S. could reach a critical mass of physicians using patient generated data by 2020. The combination of the empowered patient and technology friendly physician could lead to overall better health outcomes and reduce healthcare costs in America.

The increased adoption of these solutions is exciting, but new questions, opportunities and challenges come with this promising new category of health technology. So what’s CTA doing to help? A lot.

CTA recently partnered with the Personal Connected Health Alliance to conduct research on digital therapeutics that will focus on understanding the state of the category and explore potential opportunities for new developments. We lobbied the Center for Medicare and Medicaid Services (CMS) to reimburse doctors for time spent reviewing data from remote monitoring devices and digital therapeutics. We know device accuracy and data validity is important to physicians and consumers, so we created standards for step counting, heart rate capture and sleep monitoring. Lastly, we know privacy is key so we wrote Guiding Principles of the Privacy and Security of Personal Wellness Data. We’ll discuss this work and hear from the companies leading the way in digital therapeutics during the Disruptive Innovations in Healthcare conference at CES 2018.

Source: Cta.tech

Digital therapeutics startups band together to form new industry group

A group of  health startups in the burgeoning digital therapeutics space have joined together to create a new industry association, the Digital Therapeutics Alliance (DTA).

“Digital therapeutics are re-writing our definition of medicine,” Akili Interactive CEO Eddie Martucci said in a statement. “It’s critical that industry, academia, government, and the medical community work together in the next phase of medical adoption. We’re excited to drive this effort alongside other leaders who share our dedication to rigorous clinical validation and organizational excellence in product development. It is truly a new class of medicine.”

 

The Digital Therapeutics Alliance defines the space as “a new generation of healthcare that uses innovative, clinically-validated disease management and direct treatment technologies to enhance, and in some cases replace, current medical practices and treatments.”

“We encourage the continued growth of this industry through DTA’s work and initiatives,” Sean Duffy, CEO, Omada Health, and DTA Strategic Advisor, said in a statement. “This specialized category of products emerged from the broader digital health category, and commitment to outcome-focused reimbursement.”

Founding members include a number of digital health heavy hitters: Propeller Health, WellDoc, Akili Interactive, Omada Health, and Voluntis. They’ll work together to promote real-world evidence studies and pilot programs, create industry standards and frameworks, and develop shared data repositories.

“Our Alliance is dedicated to advancing novel platforms and solutions that improve patients’ lives and add value to physicians, care teams, and the healthcare system,” Anand K. Iyer, chief strategy officer at WellDoc, said in a statement. “These tools are used in daily life to improve patient and provider visibility into complex treatment processes and simplify pathways to better outcomes.”

Almost immediately after launching, at the Connected Health Conference in Boston, the DTA announced a strategic partnership with the Personal Connected Health Alliance, a non-profit organization that operates as a part of HIMSS (MobiHealthNews’ parent company). The partnership will allow DTA to use some of PCHAlliance’s infrastructure, reach, and resources toward its goals.

“Digital therapeutics is an emerging trend, based on the idea that technology can improve an individual’s health as much as a drug can, as well as increase the efficacy of drug therapies. Digital therapeutics companies are proving, via rigorous clinical studies – and even regulatory approval – that connected health technologies can provide measurable clinical benefit, at least as good as some medication,” Patty Mechael, EVP of PCHAlliance, said in a statement. “We are pleased to partner with the Digital Therapeutics Alliance to combine our resources to advance the field, galvanize key stakeholders, focus on developing standards of quality, and work towards improving health outcomes through this newly developing sub-domain of personal connected health.”

PCHAlliance has also launched a digital therapeutics taskforce, led by Leurent.

“Digital therapeutics are at the forefront of a new era in healthcare,” Voluntis CEO Pierre Leurent said in a statement. “As the entire industry prepares for what’s next, we are excited to represent digital therapeutics in this rapidly evolving environment, working with regulators, patient advocacy groups, providers, payers, and manufacturers.”

Digital therapeutics is a fast-growing field, as evidenced by CMS’ expected approval of digital diabetes prevention programs and the FDA’s recent clearance of Pear Therapeutic’s digital therapeutic for addiction. A recent report from Grand View research says the digital therapeutics market will be worth more than $9 billion in 2025.

“Digital therapeutics will significantly benefit individuals and communities by improving chronic disease care and treatment,” David Van Sickle, CEO of Propeller Health, said in a statement. “DTA actively encourages and supports companies working to develop, trial, and market digital offerings with meaningful clinical benefits.”

Source: Mobihealthnews.com

Your smartphone as medicine: Digital therapy is here to stay

The next blockbuster therapy is probably already in your pocket or purse.

The FDA recently approved the first prescription digital therapy, Pear’s Reset appand program, which is focused on substance abuse. Others are likely to follow. That means your next trip to the doctor could include a prescription for a mobile app in addition to, or instead of, medicine.

Digital therapy represents a powerful yet provocative new idea in health care. Software brings a precision to therapy and with it an ability to personalize treatment. This gives digital therapy a big role to play as we transition to value-based care.

But can software be a therapy all by itself? Or, as MIT’s Technology Review recently asked, “Can ‘digital therapeutics’ be as good as drugs?”

These aren’t purely academic or technological questions. They are ones we need to take seriously as we look to curb our country’s dependence on prescription drugs and find better, more effective options for treatment. At the same time, the health care industry continues to embrace a focus on prevention. The emphasis on wellness and health management has driven new thinking about how to engage people well before they become patients.

Where we are today

Several companies are playing out this argument. Omada and Virta are often cited, along with Ginger.io, Triggr, Propeller, Livongo, AbleTo, and my company, Vida Health.

The solutions they offer are now emerging from pilots and testing, and we’re beginning to see enormously positive outcomes from digital therapy.

As the Wall Street Journal reported, “the emerging field of digital medicine — a combination of remote monitoring, behavior modification and personalized intervention overseen by the patients’ own doctors — can improve outcomes in some of the most costly and tough-to-manage categories such as diabetes, heart disease, and lung disease.”

In one recent study, digital therapy and tailored health programs helped drive down body weight and blood pressure. Such tools can be especially effective for diabetes prevention and management. Doctors prescribing digital therapies are seeing increased patient activation, medication adherence, and reduced hospital readmissions.

A growing body of research on digital therapies is validating what physicians have long known: that environment and behavior play substantial roles in most preventable diseases, and that software-based digital therapy can consistently and positively influence both.

Focus on chronic disease

Most digital therapies today focus on complex chronic conditions, like obesity, diabetes, and mental illness. Chronic care is a good fit for digital therapies for several reasons.

Money. Chronic disease accounts for a disproportionate share of health care costs in the United States — more than $2 trillion dollars year and 86 percent of all health care costs. Elevated glucose levels associated with prediabetes and diabetes alone cost our country more than $322 billion annually. Payers, self-insured companies, accountable care organizations, and patients themselves are all highly motivated to reduce costs. By reducing the burden of chronic diseases, digital therapies can help create a rare win-win in health care.

No cure. Although most chronic diseases have no “cure” in the classic sense, the majority of cases are preventable. But the active day-to-day management, continuous care model, and data required to prevent these diseases elude us today. As a result, patients (and their doctors) are often willing to try new things.

Daily behaviors matter. For most chronic diseases, lifestyle changes can beneficially affect biology in both small and large ways. From migraine to obesity, high blood pressure, depression, anxiety, sleep apnea, or diabetes, success is often achieved when a patient can control the condition by developing new routines. That’s where digital therapy comes in. Software-based interventions provide a continuous feedback loop that is necessary when building the small daily habits that can have an outsized impact on health and quality of life.

Overcoming disease should be our indicator of success

There are two main categories of digital therapy today.

Single disease focus. Some digital therapies focus on a single chronic disease, like diabetes, high blood pressure, obesity, or depression. Companies in this space include Omada (pre-diabetes), Livongo (diabetes), Hello Heart (hypertension) and Ginger.io (mental health).

Wellness. Others are designed for general health and wellness. These help individuals live healthier lifestyles by getting into an exercise routine or shifting to a plant-based diet. They aim to help individuals reduce their overall risk of developing a chronic disease. Users of apps in this category tend to be comparatively healthy. Companies in this space include MyFitnessPal, Noom, Farewell, and Weight Watchers.

Both types of digital therapy are useful, but there needs to be a bridge between the two. Let me explain what I mean.

General health and wellness apps are great, but they only work for a relatively small, self-motivated group of people. These apps often don’t sustain long-term behavior change and there’s little evidence that they can, on their own, drive measurable outcomes for people who need them most.

Digital therapies focused on single diseases, on the other hand, can be quite effective at addressing the chronic condition they were built to treat in certain “cookie cutter” cases. But they miss an important fact about chronic diseases: most of them are the product of more than one underlying condition. Physical and mental health are entwined along a continuum that makes it difficult to effectively treat one without at least acknowledging the other. For instance, 43 percent of people with depression are obese; obese people are 55 percent more likely to depressed. Factors of one disease can feed into the other, creating a vicious cycle.

If we treat just the mind or just the body, we’re failing people in a profound way.

Why you should care

My friend Daphne Kis, whose Litmus Health startup employs machine learning to make sense of behavioral data in clinical trials, uses the phrase “good days and bad days” to describe the opportunity in front of us all, both inside and out of the lab.

If digital therapy can meaningfully create for users many more good days than bad ones, then software can convincingly improve the daily quality of life for millions of people, not to mention drive billions of dollars in system-wide savings.

Digital therapies aren’t yet seeing SoulCycle and Orangetheory numbers, but they are getting there. We are seeing larger and larger numbers of individuals voluntarily enlisting in and paying for outcomes made possible by software.

If it’s true that the average American taps, types, swipes, or or otherwise engages with his or her smartphone an astonishing 2,617 times per day, we ought to be able to leverage our national obsession with pocket computers for dramatically better health. It’s amazing to think that the path to a fundamentally healthier digestive system is no harder to use than Facebook and no more expensive than a respectable coffee habit, but it’s entirely possible.

Stephanie Tilenius is the founder and CEO of Vida Health.

Updated to correct Americans’ engagement with their smartphones

Source: Stat News

Can “Digital Therapeutics” Be as Good as Drugs?

Entrepreneurs are betting on apps that improve—or just replace—prescription medication.

What if an app could replace a pill? That’s the big question behind an emerging trend known as “digital therapeutics.” The idea: software that can improve a person’s health as much as a drug can, but without the same cost and side-effects.

Digital therapeutics, or “digiceuticals,” as some call them, have become a Holy Grail in some quarters of Silicon Valley, where investors see the chance to deliver medicine through your smartphone. Andreessen Horowitz, the venture firm, even predicts digital drugs will become “the third phase” of medicine, meaning the successor to the chemical and protein drugs we have now, but without the billion-dollar cost of bringing one to market.

“It’s going to seem backwards and even barbaric that our solution to everything was just giving out pills,” partner Vijay Pande wrote on the investment company’s blog.

But defining exactly what a digital therapeutic actually is can be as elusive as finding the famous chalice. “It’s still a fluid space that everyone is trying to categorize,” says Peter Hames, the British CEO of a startup called Big Health, which offers an online therapy program for insomnia suffers called sleep.io that it claims can replace “pills or potions” with visualization exercises.

Hames says digital therapies fall into two groups, which he calls “medication augmentation” and “medication replacement.” He says sleep.io is in the latter category because it actually makes sleeping pills unnecessary. “We’ve been able to show through multiple peer-reviewed studies that the outcomes are better than drugs,” he says.

The term digital therapeutics began to circulate around 2013, in large part due to Sean Duffy, CEO of Omada Health. He began using it at conferences and in the company’s marketing materials to describe its online coaching software to help pre-diabetics avoid getting sick by exercising more and losing weight.

About a dozen startups now call themselves digital therapeutics providers, and say they’re distinct from the rest of the digital health market of activity monitors, smart scales, and sleep trackers.

To distinguish themselves from “wellness” gadgets, digital therapeutics companies tend to carry out clinical tests and sometimes seek regulatory approvals –one company, Welldoc, offers a prescription-only version of its BlueStar phone app for managing diabetes, which it terms the “first FDA-cleared mobile prescription therapy.” But unlike drugs, digital therapeutics don’t usually need approval by the U.S. Food and Drug Administration, since often they promote lifestyle or dietary changes that are deemed to be low-risk.

Whether a digital therapeutic involves a tracking sensor or coaching though an app, the biggest question is whether they provide a distinct, measureable medical benefit. One startup calling itself a digital therapeutics company is Virta Health, based in San Francisco. The company raised $37 million in March. Its goal is to actually “reverse” diabetes without drugs or surgery using online coaching to get people on a special diet high in fats and low on carbs. It has a study by Indiana State University to back up the claim—about half of the 262 people with type 2 diabetes enrolled in a 10-week trial were able to reduce their blood glucose levels to non-diabetic ranges.

Steve Kraus, an investor at Bessemer Venture Partners, says he thinks digital therapeutics will be a “real thing, I really do,” but he says it’s not clear how many people will succeed with lifestyle intervention in the long run. Instead, he says, digital therapeutics used “in combination” with drugs, to make them work better, could be the idea’s sweet spot.

What’s the most serious disease that a “digital” treatment could cure?

Some digital companies are already allying with pharmaceutical makers. One, Propeller Health, inked a deal with GlaxoSmithKline for what it calls a “digitally guided therapy” platform. The approach combines Glaxo’s asthma medications with sensors, made by Propeller, that patients attach to their inhalers to monitor when they’re used. Patients who get feedback from Propeller’s app end up using the medication less often.

To win adoption, digital therapeutics companies have striven to mimic the drug industry’s practices and standards. Big Health, based in San Francisco, went as far as testing a placebo version of its insomnia app against the real thing. One group of insomnia-sufferers were given plausible-sounding, but fake, online visualization exercises; the other received the actual cognitive behavioral therapy that Big Health says works. The digital treatment “absolutely spanked the placebo,” says Hames.

Hames believes that someday digital therapeutics companies may even outstrip drug companies when it comes to evidence. “We’re digital, so we’re going to have a firehose of data,” he says. Drugmakers don’t always track real-world results of their pills once clinical trials are done. But digital therapeutics companies could easily keep getting data. “It’s not in the drug company’s interest because they have already sold the drug,” he says. “Meanwhile, the insurance companies will say to us, ‘You have the data, so why don’t you just tell us?’”

Some drug company executives remain skeptical. Robert Plenge, vice president at Merck’s research labs, had to look up “digital therapeutics” when asked whether they were important. “I don’t totally understand what you mean,” he says. “Which might in and of itself be your answer.” Plenge doesn’t think the idea would have much impact on drug development and questioned whether digital companies will be able to prove their offerings are worth the price.

But some digital therapies are already much cheaper than your average drug. At Big Health, people are charged $400 a year, or about $33 a month, to use the insomnia software. The sleeping pill Ambien, by contrast, costs $73 for six tablets, or six nights of shut-eye.

A notable difference is that insurance often pays most of the cost of drugs and insurers are still getting used to digital therapeutics. Omada Health in 2016 again broke ground when Medicare agreed to reimburse the cost of its digital diabetes prevention program. The company didn’t say how much it bills employers and insurance plans, but it would charge a self-paying customer $140 a month for the first four, then $20 per month.

Ambar Bhattacharyya, with Maverick Ventures, says he thinks insurers are ready to talk about covering digital therapies more widely. “This is an imminent issue that I suspect will be figured out within a year,” he says. If it’s good news, he says, the space is poised to explode.

Source: Technology Review

Digital Therapeutics: The Future of Health Care Will Be App-Based

Last month, healthcare startup Omada Health secured a $50 million C round led by major insurer Cigna, which brings the 5-year-old company’s total funding to over $127 million.  That kind of nine-figure investment isn’t unusual for a company with the next blockbuster drug or game changing medical device, but Omada’s core product is a diabetes-preventing mobile app!  Omada is a leader in one of the hottest new sectors of the app economy: Digital Therapeutics.

Digital therapeutics are a new category of apps that help treat diseases by modifying patient behavior and providing remote monitoring to improve long-term health outcomes.  Depending on the disease, they can encourage patients to stick to diet and exercise programs or help them adhere to drug intake regimes.  Wait a minute, doesn’t that sound a lot like wellness apps?  There are already hundreds of apps that help us manage our workouts or meditate more effectively!

The key difference is that digital therapeutics implement treatment programs tailored to specific ailments, especially major chronic diseases like diabetes, heart disease, high blood pressure, and pulmonary diseases like COPD.  Because patient behavior is so crucial in preventing and limiting the severity of these life-threatening illnesses, the early evidence is that these digital health programs, often combined with human coaching/interaction, can make a significant difference in health outcomes.

To provide hard data of their efficacy (and differentiate themselves from wellness apps), newcomers like Omada have taken a page from the pharma industry and have performed clinical trials with major healthcare networks like Humana.  In recently published research, prediabetic patients that participated in a year-long  Omada-based program lost 7.5% of their initial body weight and showed improved glucose control and decreased cholesterol.

These results are one reason why health insurance firms are among the big investors in the leading startups.  Mobile app-based digital treatment programs can be delivered at massive scale and low cost, and by helping to prevent disease progression, can potentially save insurers billions of dollars.  On the other side of the equation, the prospect of health insurance covered recurring subscription revenues has VC’s salivating.   Omada proved early validation of this prospect when last year it got Medicare to agree to reimburse the cost of its digital diabetes prevention program.

Another reason the insurers are excited about the potential of mobile-delivered health programs is data.  Once clinical trials are complete, most pharmaceutical companies don’t track real-world results for their drugs.  With precise regimes and daily monitoring, digital therapeutics can offer mountains of data that can potentially provide doctors unprecedented insights into patient behavior and create feedback/optimization loops for individual patients.   Enabling patients to take greater control over managing their chronic illnesses and preventing disease progression could yield huge cost savings throughout the entire healthcare system.

Some digital therapeutics is meant to entirely replace medication with behavioral-based treatment, such as apps that use visualization exercises to help insomnia sufferers as an alternative to sleeping pills like Ambien.  Others are designed to work in conjunction with medications by helping patients better manage their treatment regimes.  A company that has taken this approach is Propeller Health, which makes a sensor that attaches to inhalers used by people who suffer from chronic asthma and COPD.  The sensor monitors inhaler usage and provides feedback via a mobile app.  Propeller has partnered with GlaxoSmithKline to create a digital therapy platform to guide patients in using its asthma medications.

Another innovative digital drug adherence platform is the one created by startup Proteus Digital Health.  Proteus has built an ingestible radio tag the size of a grain of sand.  It can be put inside a pill and can send data to a wearable patch on the patient’s torso.  For elder patients managing multiple chronic conditions with an array of daily medications, Proteus’ sensors and the app can send alerts to patients as well as family and primary care providers when a key dose has been missed.  Trials have shown that Proteus’ system has shown reductions in blood pressure among patients taking medication for hypertension.

From these examples, it becomes clearer to see how digital health programs, which can be tailored and optimized for individual patients and delivered at scale via mobile, represent a transformational development in healthcare.  As Andreessen Horowitz partner Vijay Pande calls it, digital therapeutics, by enabling the kind of behavioral meditation which is the only effective way of managing chronic illness, represent a true “third phase” of medicine, after small-molecule drugs and protein biologics.  I predict that someday, apps that help people manage illness and prevent long-term disease will no longer have a special name.  They will just be another form of software on our phones.  More than anything else, the rise of digital therapeutics demonstrates once again the power of mobile computing as the most transformational technology platform the world has ever seen.

Source: Forbes

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