Replacing pills with apps: How digital health is becoming pharma’s newest competitor

Health app
Soon, a doctor may prescribe patients an app instead of a pill.

Equipped with more available data and less federal oversight, digital therapeutics could be making a run at the pharmaceutical industry’s entrenched role in healthcare.

Digital health startups see an opportunity to replace—or augment—prescription drugs with lower-cost and more effective tech-based solutions, or so-called “digiceuticals,” according to an article in MIT Technology Review. Often, these digital health companies are putting their software through the same rigorous clinical trials as drug companies to demonstrate their value.

Several companies have already pushed their way into the healthcare industry with technology that emphasizes data collection and personalized coaching. Earlier this year, Virta launched as a specialty medical clinic with the lofty goal of reversing Type 2 diabetes in 100 million people by 2025. Omada Health has emerged as a leader in the field of digital therapeutics, partnering with systems such as Intermountain Healthcare to identify patients with prediabetes.

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The rise of digital therapies isn’t driven entirely by competition. Some companies have partnered with pharmaceutical giants to offer an integrated approach to prescription drugs. But what separates app developers from prescription drug manufacturers is the constant flow of data that allows companies to continually evaluate their product—something drugmakers have little incentive to do.

“It’s not in the drug company’s interest because they have already sold the drug,” Peter Hames, CEO of a digital startup called Big Health told MIT Technology Review. “Meanwhile, the insurance companies will say to us, ‘You have the data, so why don’t you just tell us?’”

New health technology is having a similar impact on the hospital environment, where health systems are beginning to adopt a wide range of new gadgets that provide virtual monitoring, telehealth visits and open up a new world of patient-generated health data. Technology and analytics is also working behind the scenes at places like Johns Hopkins Hospital to help hospitals streamlines patient flow, according to The Economist.

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That’s slowly changing the way executives view their hospital's role in patient care over the next several decades.

“When I think of the hospital of the future, I think of a bunch of people sitting in a room full of screens and phones,” Cleveland Clinic CEO Toby Cosgrove told the magazine.