Digital therapeutics makers demand deregulation, government stays cautious

With the digital therapeutics market expanding worldwide, industry officials said that Korea needs a policy change to spur the growth of digital treatments.

However, the Ministry of Health and Welfare remained cautious against allowing health insurance benefits for digital treatments too easily.

Government and business officials speak at the Korea Healthcare Congress (KHC) 2021, hosted by the Korean Hospital Association on Thursday. They are, from left, Kang Sung-jee, CEO of WELT, Park Ji-hoon, program director at the R&D Planning Office of the Korea Evaluation Institute of Industrial Technology, and Cho Young-dae, deputy director at the Health Insurance Benefits Division of the Ministry of Health and Welfare. (Credit: Video from the KHC 2021 online session)

At the Korea Healthcare Congress 2021, hosted by the Korean Hospital Association (KHA) on Thursday, experts discussed the necessity of licensing and granting reimbursement for digital therapeutics.

A total of 25 digital treatment applications have been launched around the world so far.

However, Korea has yet to authorize any digital therapeutics.

Four digital health platform developers, including WELT and LifeSemantics, have entered clinical trials and are at the most advanced development stage in Korea.

WELT CEO Kang Sung-jee said Covid-19 prompted regulatory agencies in other countries, including the U.S., to accelerate digital therapeutics policy.

In the wake of Covid-19, the U.S. FDA showed a significantly prospective stance on digital treatment policy, Kang noted. In addition, Japan is also discussing digital therapeutics as pharmaceutical products.

Germany is pushing to grant health insurance benefits for digital treatments, and France plans to follow suit, he went on to say. In addition, China has 17 digital therapeutics products being tested in clinical trials under government supervision, he said.

Boosted by each country’s policy support, the global digital therapeutics market is growing.

Around the world, digital treatment developers are seeking marketing approval for 137 products, according to IQVIA, a U.S. healthcare data provider.

Kang said it was difficult to say the right policy for digital therapeutics but emphasized that Korea’s policy could become a global standard.

“We should think about a digital therapeutics policy that fits the domestic situation,” he said.

Park Ji-hoon, program director at the R&D Planning Office of the Korea Evaluation Institute of Industrial Technology (KEIT), affiliated with the Ministry of Trade, Industry, and Energy, said digital treatments would help the entire healthcare industry advance to a higher level.

KEIT is running an R&D project to support seven digital therapeutics products’ all cycles from development to licensing and preparing for reimbursement registration.

Park said the population aging made medical devices that can be used outside of hospitals important.

Many wellness programs are available now but paid digital health programs are still rare, he noted.

“Many people pay 10,000-20,000 won ($8.5-17) monthly for insurance premiums or Netflix services, but not many are willing to pay for health management services,” Park said.

Companies should make examples where people can directly experience the effect of digital treatments and be aware that healthcare is worth paying for, which will help the entire healthcare industry leap forward, he added.

The health and welfare ministry agreed that digital therapeutics would positively affect healthcare but took a prudent approach to grant health insurance coverage for digital treatments.

Cho Young-dae, deputy director at the Health Insurance Benefits Division of the Ministry of Health and Welfare, said the government has not set any detailed plans to make digital treatments reimbursable.

“The health and welfare ministry and the Health Insurance Review and Assessment Service are discussing pricing methods,” Cho said. “If the government finishes the discussion with stakeholders and companies, it will announce it through the Health Insurance Policy Deliberation Committee or an official discussion body.”

Industry officials complain that the government’s regulation is too strict on digital therapeutics, but it was “not a matter of regulation but a principle,” he said.

“It is difficult to say pricing is part of the regulation. However, this is a universal principle that we apply to all health insurance,” Cho said.

He said that the government is communicating with industry officials for a speedy and clear process for health insurance coverage for digital therapeutics.

In the post-Covid-19 era, digital therapeutics will significantly impact the public health system, and the government is seeking measures to integrate changes in medical care and the existing healthcare system, Cho added.