The news: Pfizer is partnering with Swedish digital therapeutics (DTx) company Alex Therapeutics to commercialize a smartphone-based nicotine cessation program (dubbed Eila). Currently, Pfizer is helping get the DTx clinically validated. The companies plan to commercialize the DTx in Germany first, and eventually to other international markets.

The opportunity: Pharma companies are testing the waters in European markets like Germany prior to expanding to the US, since digital therapies are covered by insurance there (and more likely to be used).

• The pandemic spurred Germany to enact nationwide digital health reforms: For example, it rolled out its Digital Healthcare Act, which entitled all insured individuals to get access to reimbursement for digital health resources, including DTx.
• Like the US, Germany has a multi-payer healthcare system—so, the widespread rollout of digital health applications and coverage makes for an interesting case study for the US.

Plus: There’s a huge market for nicotine addiction treatment in both Europe and the US.

• Around 18% of people in the EU are daily smokers.
• Nicotine addiction is the most common form of addiction in the US, affecting nearly 10% of the US population, per SAMHSA’s 2020 National Survey on Drug Use and Health.
• And the rapid rise of vaping, particularly among US teens, has caused a surge in nicotine addiction.

The bigger picture: The European market can serve as a stepping stone for FDA approval in the US market.

• Obtaining a CE mark is much easier than getting FDA approval: Its review process is 3 times shorter and doesn’t require as much clinical evidence as the FDA does.
• For example, Babylon Health expanded its AI-powered telehealth triaging chatbot service to the US in early 2020 after already running it in Europe.