U.S. DIGITAL THERAPEUTICS MARKET ANALYSIS

The U.S. Digital Therapeutics Market was valued at US$ 2.11 Bn in 2022 and is forecast to reach a value of US$ 21.46 Bn by 2030 at a CAGR of 33.8% between 2023 and 2030. The U.S. Digital Therapeutics Market is experiencing strong growth due to the rise in burden of chronic diseases and the outbreak of COVID-19 (pandemic). Moreover, growing adoption of digital healthcare and rise in adoption of novel technologies is expected to boost growth of the market. However, factors such as growing concerns about patient data privacy and challenges involved with digital therapeutics are expected to hamper growth of the U.S. Digital Therapeutics Market.

U.S. Digital Therapeutics Market Drivers:

High prevalence of chronic diseases to drive market growth

One of the key factors expected to augment the growth of the U.S. Digital Therapeutics Market over the forecast period is the increase in incidence of chronic diseases in the U.S. For instance, chronic diseases are highly prevalent in the U.S. and are expected to increase substantially in the coming years. According to the Centers for Disease Control and Prevention (CDC), chronic diseases, such as cardiovascular disease, cancer, and diabetes, are the leading causes of death and disability in the U.S. Research has shown that digital therapeutics solutions for disease management can drive better outcomes for patients living with chronic diseases.

The outbreak of COVID-19 to propel market growth

Another factor which is driving the growth of the U.S. Digital Therapeutics Market is the outbreak of COVID-19 (pandemic). For instance, as a result of the pandemic, the adoption of digital health is higher than ever before, making it an ideal time for implementing novel and convenient digital care options. In April 2020, the Food and Drug Administration FDA) issued guidelines to increase the availability of digital medical devices or digital therapeutics solutions for mental health and to reduce the burden on healthcare facilities and the risk of exposure to the virus. Such initiatives by the government are expected to propel the market growth.

U.S. Digital Therapeutics Market Opportunities:

Growing adoption of digital healthcare is expected to provide significant growth opportunities for players in the U.S. Digital Therapeutics Market. For instance, there are currently more than 40 FDA-(the Food & Drug Administration) approved digital therapeutics (DTx) applications on the market. According to the American Medical Association (AMA) digital health research, about nine in ten physicians now believe digital health tools are an advantage for the patient care. Moreover, a recent survey by the American Medical Association found that 93% of physicians perceived digital health tools as advantageous in 2022, an 8% increase since 2016.

Growing adoption of novel technologies is expected to offer significant growth opportunities for players in the U.S. Digital Therapeutics Market. For instance, digital therapeutics (DTx) is evidence-based treatment or therapy that utilizes digital and often Internet-based health technologies to spur changes in patient behavior. In September 2020, The US FDA launched the Digital Health Center of Excellence, furthering the agency’s overarching dedication to the advancement of digital health technology, including mobile health devices, Software as a Medical Device, wearables when used as a medical device, and technologies used to study medical products.

U.S. Digital Therapeutics Market Trends:

Rise in focus towards preventive healthcare is a recent trend

Mobile Health (mHealth) is the use of mobile and wireless technologies to support the achievement of health objectives. The most common application of mobile health is the use of mobile devices to educate consumers about preventive healthcare services. Furthermore, mHealth is also used for disease surveillance, outbreak tracking, treatment support, and chronic disease management. Thus, with the rise in disease burden, the use/adoption of mHealth is also increasing rapidly. This trend is expected to continue over the forecast period, driving the market growth.

Figure 1. U.S. Digital Therapeutics Market Value (US$ Mn) & Y-o-Y Growth (%), 2017-2030

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Government initiatives to digitalize healthcare is another trend

Digital transformation in the healthcare industry means digitizing processes and products to deliver better healthcare services along with improved customer experience. The digital revolution in the healthcare in the U.S. is marching steadily forward, spurred by the federal government regulations, financial incentives and technological innovations. The government has also invested billions to digitize, modernize, and/or interoperate STLT (State, Territorial, Local and Tribal) public health data infrastructure over the next ten years.

U.S. Digital Therapeutics Market Restraints:

Growing concerns about data privacy to hinder market growth

One of the key factors expected to hamper the growth of the U.S. Digital Therapeutics Market is the growing concerns about patient data privacy. Security/privacy risks are one of the major challenges for the market as the nature of data, and is vulnerable to cybersecurity attacks and data theft. Digital therapeutics services are also vulnerable to signal errors, third-party interference, and transmission outages. This in turn can result in the loss of critical patient data, interrupted communications, and the alteration of important clinical information.

Challenges involved with DTx to hamper market growth

Another factor which is hampering growth of the U.S. Digital Therapeutics Market is the economical and technical challenges involved with DTx. Some of the major challenges involved with digital therapeutics include less reimbursement, lower physician adoption, lack of awareness and training, compatibility issues, and others. Thus, it is necessary to raise awareness and acceptance of digital therapeutics for necessary stakeholders in the ecosystem, such as providers, payers, and research communities. However, there can be an economic burden on people for using DTx, which can also limit its adoption and hinder the growth of the market.

Figure 2. U.S. Digital Therapeutics Market Share (%), by Application, 2023

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U.S. Digital Therapeutics MarketSegmentation:

The U.S. Digital Therapeutics Market report is segmented into Application and End User.

Based on Application, the market is segmented into Treatment & Disease Management (Chronic Care, Mental Health & Neurological Disorders, and Others) and Preventive Care (Pre-diabetes, Weight Management, and Others). Out of which, Treatment & Disease Management Segment is expected to dominate the U.S. Digital Therapeutics Market during the forecast period and this is attributed to the increase in prevalence of chronic disease in the U.S.

Preventive Care Segment is also expected to witness significant growth in the near future and this is owing to the rise in focus towards preventive healthcare.

Based on Application, the market is segmented into Healthcare Providers, Patients/Individuals, Payers, Employers, and Others. Out of which, Healthcare Providers Segment is expected to dominate the market during the forecast period and this is attributed to the increasing adoption of digital healthcare and growing adoption of novel technologies.

Patients/Individuals Segment is also expected to witness robust growth in the near future and this is owing to increase in awareness among people about digital therapeutics.

U.S. Digital Therapeutics Market: Key Developments

In August 2022, Hicuity Health launched tele-ICU services at MUSC Health Columbia Medical Center Downtown in Columbia, South Carolina.

In March 2022, DeliverHealth launched its program built to unify point solutions in healthcare and clear the way for essential, resilient connections among providers, clinicians, and patients. A new platform allows for frictionless access and effective workflows to apply purpose-built, explainable AI with the needed human-in-the-loop flexibility that delivers speed to value.

In February 2022, DynamiCare Health Inc. announced that the U.S. Food and Drug Administration (FDA) granted Breakthrough Device Designation for DCH-001, a prescription-only DTx intended to treat tobacco use disorder complicating pregnancy and childbirth.

DynamiCare Health Inc. received Breakthrough Device Designation for DCH-001 from the United States Food and Drug Administration (FDA).

In July 2021, Teladoc Health collaborated with Microsoft to integrate its Solo platform with the Microsoft to improve clinician and patient access across the virtual healthcare space.

In May 2021, Eli Lilly and Company signed strategic international agreements with 4 companies to advance connected solutions and streamline the diabetes care management for individuals living with the disease outside of the United States.

U.S. Digital Therapeutics Market: Key Companies Insights

The U.S. Digital Therapeutics Market is highly competitive. This is attributed to the rise in adoption of digital healthcare and growing adoption of novel technologies, as a result, players in the market are focusing on launching novel products in the market.

Some of the key players in the U.S. Digital Therapeutics Market are 2Morrow Inc., ResMed, Pear Therapeutics, Omada Health Inc., Teladoc Health, Lark Technologies, Kaia Health, Fitbit, Cognoa Inc., and Akili Interactive Labs, among others.

*Definition: Digital therapeutics (DTx) are evidence-based therapeutic interventions, driven by high quality software programs, to prevent, manage, or treat a medical disorder or disease. DTx have potential to reduce disease burdens, deliver better clinical outcomes, and improve patients’ lives by offering better ways to manage chronic health conditions.