Episode Summary
Executive Summary: The episode examines the rapid expansion of digital health, especially prescription digital therapeutics, AI-enabled diagnostics, and digital endpoints in drug development. Murray Aitken of IQVIA says the sector is maturing after funding turbulence, with clearer regulatory and reimbursement pathways helping adoption. He argues that unmet clinical need, better sensors, and AI are driving growth, while evidence and physician/payer acceptance remain key to broader use.
Main Topics: Expansion of digital health beyond consumer apps: Digital health now spans tools used across the care continuum by patients, clinicians, providers, and drug developers, not just consumer wellness products. AI in diagnostics and personalization: AI and machine learning are increasingly embedded in digital diagnostics and monitoring tools, supporting disease detection, progression prediction, and tailored recommendations. Funding pullback and sector maturation: After the 2020-2021 funding surge, digital health companies faced a tougher capital environment, leading to exits and restructuring, but also a more realistic market. Growth and regulation of digital therapeutics: Prescription digital therapeutics have grown sharply, but regulatory pathways and evidence requirements still vary across regions and risk levels. Reimbursement and physician adoption: Clearer billing codes, payer coverage, and practical workflows are improving acceptance among clinicians and payers, though comfort and evidence remain necessary. Digital health in drug development: Sensors, remote monitoring, and digital endpoints are increasingly used in clinical trials to reduce burden, improve data capture, and potentially lower costs.
Key Arguments: Digital health growth is being driven by unmet medical needs, expanding sensor capabilities, and sustained startup investment. AI is not separate from digital health; it is becoming embedded in diagnostics, prediction, and personalized self-care recommendations. The sector’s financial challenges largely reflect the post-2020/2021 funding correction rather than a lack of utility or demand. Regulatory and reimbursement clarity has improved in the U.S., Germany, the UK, and other markets, helping the field mature. Digital therapeutics are defined by delivering a medical intervention via software, and their adoption depends on clinical evidence and safety. Physicians and payers will adopt digital therapeutics more widely when they see outcomes, receive payment for time spent, and gain confidence from peers. Digital tools can make clinical trials less burdensome, capture continuous real-world data, and support FDA-approved digital endpoints. The biggest long-term impact is likely improved patient care through better data, lower burden, and potentially lower costs than conventional approaches.
Data Points: Commercially available prescription digital therapeutics: 140 - Market access through national regulatory and reimbursement pathways Growth in prescription digital therapeutics since 2021: Five-fold increase - As cited from the IQVIA Digital Health Trends 2024 report Digital care programs since 2021: Doubled - Broader offerings that include digital therapeutics plus other care elements AI-enabled mobile digital diagnostics: 103 - Commercially available for health assessment FDA-approved devices incorporating AI: About 75 - Examples include autism spectrum disorders, sleep apnea, atrial fibrillation, skin cancers, and epilepsy Pain reduction in pediatric virtual reality use: 60% reduction - Australia-approved device used to minimize pain during needle procedures Anxiety reduction in pediatric virtual reality use: 40% reduction - Same virtual reality device for children during needle procedures Report history: 5th report since 2013 - IQVIA Institute’s digital health report series
Pivotal Quotes: "the scope of what gets included under digital health has expanded very rapidly" — Murray Aitken: Describing how broad the digital health category has become in the new IQVIA report "we're definitely seeing AI being incorporated into digital health tools in one way or another" — Murray Aitken: On AI’s growing role across digital diagnostics and therapeutic applications "the need and the opportunity for digital health remains as actually larger than ever" — Murray Aitken: Explaining why the sector outlook stays positive despite funding disruption
Implications: Digital health is moving from experimentation to integration. Companies that prove clinical value, secure reimbursement, and fit clinician workflows are best positioned, while AI and digital endpoints may reshape care delivery and drug development alike.
From the Episode
So, for our report on digital health, we're really looking across all of the digital health tools that are being developed and deployed in healthcare systems, typically based on mobile devices. So, that could be based on smartphones, or tablets, or virtual reality devices, or wearables, and intended to improve health. And increasingly, these are connected to bio. Sensors or other kinds of connected devices. They use analytic algorithms or incorporate those in the tools as well as software programs. What we found in this year's report, which is the fifth report we've done on digital health since twenty thirteen, is the scope of what gets included under digital health has expanded very rapidly. Which makes our report rather thick and content-laden, I might say, as a result. Well, it's moved well beyond the consumer. It's being integrated throughout the healthcare continuum for patients, physicians, providers, drug developers. What's driving the demand? Well, at some level, the demand is driven by unmet needs. We still have enormous gaps.
we've had a period of investment and interest by startup companies and so on to try to bring these products along and bring them into the market. So add all that together and it's driven an enormous amount of progress and growth over the past few years. How is the rapid development of AI either fueling these trends and enhancing these products or benefiting from the real-world data they can collect? Yeah, so we're definitely seeing AI being incorporated into digital health tools in one way or another. And in fact, you know, we talk in our report about 103 mobile digital diagnostics commercially available for health. Assessment that are enabled by artificial intelligence and machine learning. And about 75 devices are approved by the FDA that incorporate AI. These are being used for things like autism spectrum disorders, sleep apnea, atrial fibrillation, skin cancers, epilepsy, and so on. So we are seeing AI being incorporated both.
2020 and 2021, where there was perhaps excessive money flowing into this sector. By the way, not only this sector, we see it in therapeutics as well. Since then, we've had a pullback in the funding over the last two or three years now, and that has definitely caused some exits, some bankruptcies, some restructuring. You know, so this has been definitely a factor on the landscape. At the same time, the need and the opportunity for digital health remains as actually larger than ever. So we're working our way through this disruption from the funding perspective. And we see a very positive outlook again based on the technology and the need that's out there. You mentioned. The biotech downturn was this reflective of the broader downturn, or were there structural problems within the digital health sector that needed to be worked up, such as business models or regulatory pathways or reimbursement issues? Well, I think we definitely saw this sort of bubble in 2020 and 2021 in multiple sectors. And that was a time when money was essentially free and there was a big
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The Bio Report podcast, hosted by award-winning journalist Daniel Levine, focuses on the intersection of biotechnology with business, science, and policy.