Digital therapeutics (DTx) mental health platform Happify Health scored $73 million in Series D funding, which it’ll use to build specialized digital therapies for pharma companies and payers, while pursuing global business development opportunities.
Payer tie-ups will give Happify Health’s patients greater coverage and offer providers reimbursement for using its tools, thereby increasing wide scale consumer adoption.
- Happify Health already partners with four massive US payers, including Cigna. It began providing mental health DTx to Cigna members in 2018, shortly after the insurer reported almost 59% of people used a mental health app like Happify Health to track their health.
- Given its goal to expand internationally, it wouldn’t be far off to imagine Happify Health securing reimbursement from payers in Europe, where there are fewer regulatory hurdles for DTx. Unlike the US, reimbursement pathways for digital therapies in regions like the United Kingdom are more digital health friendly—which would give Happify Health a better chance of getting its tools in the hands of a broader range of consumers.
But in order for payer-DTx partnerships to be successful, DTx companies will be mindful of two elements:
- DTx companies will have to ensure their platforms prioritize patients’ privacy. Blake Wilkerson, Blue Cross Blue Shield Association VP of Strategic Partnerships, told Insider Intelligence that in addition to financial factors, “since many [DTx] companies are newer, the privacy and security of the technology are important” when evaluating a new payer-DTx partnership. This concern makes sense, given that mobile health apps have become increasingly susceptible to data breaches over the past year. DTx companies like Virta Health are responding by beefing up their privacy practices: Last year, it announced its platform received HITRUST CSF certification, which essentially demonstrated its tech met industry-defined requirements for protecting personal health information.
- DTx companies need evidence that they can deliver cost-savings for both themselves and the payer. Ensuring a partnership is lucrative for both parties likely guarantees payers that DTx cos won’t pull out of the partnership prematurely: If all “savings fall on one side, the [payer-DTx partnership] is not going to last very long,” according to Dr. Kenneth Snow, medical director at CVS Health, who helped build a partnership between Aetna and DTx firm Welldoc. And the key to ensuring high ROI on both the payer and DTx side is patients’ positive health outcomes: For example, WellDoc’s digital therapy for type 2 diabetes helps patients improve their A1C levels, leading up to cost savings of up to $250 per month.