Digital Therapeutics (DTx) Market

Market Overview

The digital therapeutics (DTx) market is predicted to grow with a CAGR of 26.0% during the forecast period.

Digital therapeutics (DTx) is a fast-evolving class of therapies that deploys software to treat disease. It delivers therapeutic medications that are evidence-based and are driven using high-quality software programs to avoid, administer, or cure a medical disorder.

Burgeoning Chronic Diseases to Boost Demand for Digital Therapeutics

Chronic diseases are the primary causes of death and ill-health worldwide. Prevalence rates of these conditions are hastening globally, progressing across every region and pervading all socioeconomic classes. According to the World Health Report 2002, the mortality, morbidity, and disability attributed to the major chronic diseases account for almost 60% of total deaths and 43% of the global burden of disease and is expected to rise to 73% of total deaths and 60% of the global burden of disease by 2021. Of which around, 79% of the deaths occur in developing countries.

The most prominent chronic diseases are cardiovascular diseases (CVD), cancer, chronic obstructive pulmonary disease, and type 2 diabetes. They are linked by preventable biological risk factors, particularly high blood pressure, high blood cholesterol, and overweight, and by related major behavioral risk factors, such as unhealthy diet, physical inactivity, and tobacco use. Action to prevent these major chronic diseases should focus on controlling these and other key risk factors in a well-integrated manner. Digital therapeutics have the potential to prevent or cure such diseases depending upon the diagnosed condition. The United States faces a potential financial and healthcare crisis of unparalleled proportion owing to these chronic diseases. Thus, the increasing burden of such extreme conditions creates a demand for digital therapeutics.

Increasing Government Initiatives for Preventive Healthcare to Accelerate Market Growth

Preventive healthcare reduces the burden of disease and associated risk factors. The role of government in healthcare has grown over the years and influenced political strategies and policies towards healthcare. Thus, the government with extensive programs is expected to play a vital role in achieving better quality healthcare and the success of lasting healthcare reform.

After the COVID-19 outbreak, data-driven healthcare policy discussions gained momentum leading to the progressive use of preventive healthcare policies. For instance, The U.S. has a hybrid healthcare structure, and it is estimated that 8% of Americans undergo routine preventive screenings. On a national level, nearly 15 out of the 50 states have above-average preventive healthcare metrics. The U.S. has the highest health expenditure per capita of all western and developed countries, thus, the government is more focused on the benefits of preventive healthcare.

Also, in India, the National Health Policy 200, has sought radical changes with a primary objective to elevate public health by achieving the expected standards and also to upgrade the current infrastructure and is continually working towards preventing communicable diseases. Thus, contributing towards the digital therapeutics market growth.

Limited Healthcare Infrastructure in Emerging Nations to Drive the Market Growth

The developing countries across the globe, such as China, India, Russia, Brazil, Mexico, and South Africa, are offering potential growth opportunities to the players in the telemedicine market. In low-income countries, telemedicine applications are primarily to link patients with specialists, referral hospitals, and tertiary care centers. Therefore, proving to be a better alternative for good quality healthcare for people with less investment in building infrastructure.

More than half of the world’s population resides in India and China, accounting for an out-sized patient base. As per the UN Economic and Social Affairs Report (2019), the population of individuals aged over 60 years in Asia is anticipated to surge from 395.3 million in 2019 to 587.4 million by 2030. The growing population propels the demand for digital health technologies guiding people throughout the process of building the wellness regime.

Government Initiatives for Telemedicine to Augment the Market Demand

Various national governments have approved the use of telemedicine. For instance, the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services Technologies embody video conferencing, the web, store-and-forward imaging, streaming media, and terrestrial and wireless communications for medical emergencies and assistance. The department of Health and Human Services (HHS) and the U.S. Department of Agriculture (USDA) have proclaimed to promote broadband services and technology to rural areas in America. With similar sentiments and vision, the Indian government also introduced the use of Niti Aayog with the commitment to provide equal access to quality care.

The world immense adoption of digital health services over the past decade owing to the rise of social media platforms, smartphones and mobile applications, wearable devices, cloud-based data platforms, and real-world evidence studies. The number of smartphone users worldwide today surpasses three billion and is anticipated to grow by several hundred million during the forecast period. China, India, and the United States are the countries with the highest number of smartphone users, with each country surpassing the 100 million user mark contributing towards the market growth.

Market Dynamics

Diabetes Segment to Dominate the Digital Therapeutics Market

Based on application, the diabetes segment is anticipated to account for the largest market. Digital therapeutics, such as mobile apps, telemedicine platforms, and wearable devices, can replace traditional therapeutics. These tools help people make positive and sustainable behavior changes more effective than taking medication in some cases. This efficacy is possible with prescribed medications supported by continuous monitoring of vitals and the ability to encourage the practice of healthy lifestyle behaviors.

The large share of this segment can be attributed to the rising aging population. FDA has already approved several firms in the past couple of years like WellDoc and Canary Health that are digital prescription programs working towards helping diabetes patients manage their condition with mobile apps. These early players have paved the way and set the stage for incredible innovation in the space. Thus, an increase in the number of diabetic patients preferring digital therapeutics is anticipated to contribute to the market growth during the forecast period.

Regional Analysis

Growing Geriatric Population and Prevalence of Chronic Diseases Contribute to North American Market Growth

North America is anticipated to dominate the digital therapeutics market during the forecast period. The regional market growth can be due to the increasing aging population, growing prevalence of chronic diseases, and increased healthcare spending in the U.S. and Canada. According to the U.S. Department of Health & Human Services, the increase in chronic diseases is due to changing lifestyles, such as an increase in tobacco use, lack of physical activity, and excessive consumption of alcohol.

Also, high adoption and accessibility for mobile technology compared to developing countries propel the market growth in this region. Additionally, the presence of key players and high disposable income accelerate the regional market growth.

Digital Therapeutics (DTx) Market Segmentation

By Application

• Diabetes
• Obesity
• CVD
• CNS Disease
• Respiratory Diseases
• Smoking Cessation
• Others

By Sales Channel

• B2C
• B2B

By Region

• The Americas

• North America

  • The U.S.
  • Canada
  • South America

• Europe

  • Western Europe
    • Germany
    • The U.K.
    • France
    • Italy
    • Spain
  • Eastern Europe
  • The Rest of Europe

• Asia-Pacific

  • China
  • Japan
  • India
  • Korea
  • Australia
  • South Korea
  • The Rest of Asia-Pacific

• The Middle East and Africa