[Start! DTx Era] ① When Will the 'No.1 DTx' Be Available?

Challenges Remain in Reimbursement, Prescription Methods, and Infrastructure

Market Formation Difficult Without Health Insurance Reimbursement
Key Issue: Whether to Follow 'Doctor Prescription - Pharmacist Dispensing' Drug Method

[Image source=Pixabay]

[Asia Economy Reporter Lee Chun-hee] Korea's first digital therapeutic device (DTx, digital therapeutic) has made its debut through approval by the Ministry of Food and Drug Safety. Aimmed's insomnia treatment DTx 'Somz' has earned this honor, marking a long-awaited piece of good news, but it is still too early to celebrate. Due to the nature of the medical industry, simply obtaining product approval does not mean it can be immediately supplied and used in the market, so challenges remain.

According to industry sources on the 15th, the main challenges to be resolved after approval and during commercialization of DTx include ▲payment methods such as National Health Insurance reimbursement ▲prescription and usage methods ▲infrastructure establishment within the medical system. Since it is likely difficult to reach consensus among authorities, industry, and medical professionals, it is expected to take about 3 to 5 years to overcome these hurdles and ensure smooth delivery of DTx to actual patients.

The biggest challenge is undoubtedly reimbursement. In a typical market transaction, producers manufacture goods and pass them to wholesalers or retailers, and consumers pay and purchase in a simple manner. Applying this to DTx, Aimmed would sell Somz to patients through doctors or pharmacists. The problem is that the medical industry does not form its market in this structure. While the product itself can be distributed this way, the payment process is much more complex. For example, if you visit a local ENT clinic for a cold, you usually pay 3,000 to 4,000 won as a consultation fee. However, the amount the doctor actually receives is several times that. This is because the National Health Insurance, not the patient, acts as the actual 'payor' and calculates fees and pays reimbursements separately.

In Korea, where the National Health Insurance Service operates a strong public insurance system and is the largest payor, commercialization is synonymous with health insurance reimbursement. Of course, there are other methods such as non-reimbursement or private insurance, but to be used by more patients, health insurance reimbursement is essential. Conversely, if specific plans on who pays, how much, and by what method are not established, commercialization is likely to remain uncertain. Even if the Ministry of Food and Drug Safety continues to approve DTx, without a 'reimbursement' plan that allows market use, it is difficult to predict the future of the DTx industry.

The case of JLK's stroke diagnosis support software 'JBS-01K' is an example. Although JBS-01K received medical device approval from the Ministry of Food and Drug Safety in August 2018, it struggled with commercialization for over four years due to the lack of confirmation on insurance fee application. Only after being selected as a target medical device under the integrated review and evaluation system for innovative medical devices last December, along with DTx Somz and Welt's 'PillowRx,' was market entry through non-reimbursement possible.

However, reimbursement guidelines related to DTx have not yet been issued. The Health Insurance Review and Assessment Service, responsible for related tasks, initially planned to publish guidelines by mid-last year but has been somewhat delayed. The current leading proposal is to apply selective reimbursement only to 'DTx requiring a doctor's prescription' when medical severity is high or no alternative treatment exists, and apply temporary non-reimbursement in other cases. Additionally, pricing is likely to be based on cost.

However, the industry expresses concerns that the guidelines used for cost calculation are those previously applied to software ordered by the government or local governments, not DTx, thus failing to reflect the unique characteristics of DTx. Also, regarding reimbursement, it is considered difficult to impose a patient co-payment as high as 90%. A representative from a DTx development company expressed concern, saying, "Based on the draft released so far, it seems very difficult to generate profits." He added, "The strategy behind aiming for health insurance reimbursement is to increase market entry opportunities by having patients and the National Health Insurance Service share the cost, even if the product supply price is significantly lowered. However, if selective reimbursement at 90% co-payment is applied, patients may not feel cost savings, and market entry could be more difficult compared to formal reimbursement or non-reimbursement."

"Medicine to pharmacists, treatment to doctors"... "But who for DTx?"

Discussions on actual usage methods are also expected to begin in earnest. Unlike pharmaceuticals, which are approved separately as prescription drugs (ETC) dispensed at pharmacies with a doctor's prescription and over-the-counter drugs (OTC) sold without prescription, medical devices are generally only mentioned in terms of 'doctor's diagnosis and guidance,' without regulations on actual usage methods such as whether a doctor's prescription is required. Since the 'prescription DTx (PDT)' model requiring a doctor's prescription is being considered, and because there is a high need for initial education and counseling personnel for program installation and usage guidance, discussions must be held on whether pharmacist medication guidance is necessary and whether actual sales should be possible only through doctors or pharmacists issuing codes.

However, Somz, which was approved as the first DTx, is expected to be used primarily in the PDT model through a doctor's prescription. Oh Yu-kyung, head of the Ministry of Food and Drug Safety, explained, "(Somz) is used by downloading the application (app) onto the patient's smartphone after receiving treatment at a hospital." Aimmed also plans to expand into non-prescription medical devices (non-PDT) and wellness models that do not require approval.

How to prove the effectiveness of DTx to medical staff who are still unfamiliar with it and improve prescription convenience remains a key issue. A private practitioner said, "There is a lot of interest in DTx, but it is uncertain how we can use it immediately in our clinic," adding, "We have to consider practical aspects such as how to integrate DTx with electronic medical records (EMR) and, from the perspective of running a hospital, how much it will help profitability."

This content was produced with the assistance of AI translation services.