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Digital Therapeutics is Poised to Revolutionize Healthcare by Empowering Consumers
The global digital therapeutics market is estimated to be valued at US$ 6.6 Bn in 2024 and is expected to exhibit a CAGR of 20% over the forecast period 2023 to 2030. Digital therapeutics, also known as digitally-enabled healthcare, leverage digital and online health technologies to treat a variety of medical conditions. They are usually software-based and can integrate patient behaviors to empower prevention, health management, and lifestyle changes. Some key advantages of digital therapeutics include accurate diagnosis and tailored treatment plans, scalability to reach mass populations, continuous monitoring and real-time data collection, as well as cost-effectiveness. With growing disease burden and rising healthcare costs, digital therapeutics provide an affordable solution by combining best practices from clinical sciences and technology to deliver outcome-based therapies.
Key Takeaways
Key players operating in the digital therapeutics market are Happify, Inc., 2Morrow, Inc., Akili Interactive Labs, Inc., Click Therapeutics, Inc., and Fitbit, Inc. (Twine Health, Inc.). Major players are focusing on strengthening their product portfolios and expanding their presence globally to leverage growth opportunities. For instance, in 2022, Click Therapeutics partnered with Philips to commercialize its digital therapeutic programs for insomnia, depression, and chronic cardiometabolic conditions in Europe.
The growing burden of chronic diseases and rising demand for personalized care are driving the demand for digital therapeutics globally. Digital tools can facilitate early diagnosis, ongoing monitoring, and remote treatment management of chronic conditions in a cost-effective manner. This is expected to boost the adoption of digital therapeutics over the forecast period.
Key players are also focusing on expanding their presence across different geographic regions to tap the demand from untapped and emerging markets. For example, in 2023, Fitbit plans to launch its digital therapeutic for diabetes in several Latin American and Asian countries after gaining approval. This is expected to provide a boost to the overall revenue stream.
Market Key Trends
The use of artificial intelligence and machine learning platforms is a key trend gaining momentum in the digital therapeutics market. AI and ML technologies can analyze huge amounts of patient-generated data to detect patterns, predict outcomes, and offer personalized treatment plans in real-time. This makes digital therapeutics more effective and strengthens disease management capabilities. Leading players are focusing on integrating these advanced technologies to develop the next generation of evidence-based digital therapies.
Porter’s Analysis
Threat of new entrants: New firms entering the market face an established industry with high initial cost of clinical trials and need for regulatory approval from FDA and other health authorities.
Bargaining power of buyers: Individual patients have low bargaining power but insurance companies and healthcare providers like hospitals and physician groups have significant bargaining power due to their ability to provide volume sales and negotiate on price.
Bargaining power of suppliers: Suppliers of technology, data storage and computing power for developing digital therapeutics have moderate bargaining power due to limited number of capable technology firms in this niche area.
Threat of new substitutes: Potential substitutes include digital health solutions and consumer health technologies but digital therapeutics require clinical evidence and regulatory approval as therapeutics.
Competitive rivalry: Companies compete based on clinical evidence, indications covered, ease of use, data privacy and security, and pricing.
Geographical Regions
North America region accounts for the largest share of around 45% of the total digital therapeutics market value currently, mainly due to higher adoption of digital health solutions, technology maturity and presence of major players in this region.
Asia Pacific region is projected to be the fastest growing regional market during the forecast period from 2023 to 2030, estimated to grow at over 25% CAGR, led by increasing healthcare spending, expansion of digital healthcare startups and smartphone adoption in emerging economies like India, China and Southeast Asian countries.
