Cigna’s pharmacy benefits management (PBM) arm unveiled the first group of digital therapeutics (DTx) included in its digital health formulary — and it chose products developed by some of the biggest names in the DTx business, per MobiHealth News. For context, Express Scripts announced in May that it would create a digital health formulary to help its health plan clients wade through vetted digital tools — the same way they’re able to parse through drug options via drug formularies. And while it was the first, Express Scripts isn’t the only PBM looking to facilitate DTx adoption: CVS Caremark launched a similar initiative in June.

Express Scripts’ first class of DTx products are primed to help its payer clients offset spending on costly chronic conditions. After sifting through about 70 digital health companies to work with, Express Scripts landed on Livongo, Omada, Propeller Health, Welldoc, SilverCloud Health, and Live to Learn. Together, their digital management solutions and treatments cover the most common chronic illnesses — including diabetes, asthma, hypertension, and anxiety — which are major drivers of the estimated $3.3 trillion the US is spending on chronic disease in 2019. Because a large chunk of that spending is shouldered by payers, the ability to bulk up health plans with tools that hold promise for alleviating these conditions and their symptoms — often for a sliver of the price of traditional meds — will likely be embraced by Express Scripts clients.

But as Express Scripts and the likes incorporate DTx tools into their formularies to stoke adoption, they may create a wider gap in market share between notable DTx startups and their smaller counterparts:

  • Express Scripts is placing its bets on some of the most prominent players in the DTx space. And the players Express Scripts has included in its forumulary will likely enjoy a hefty bump in enrollment thanks to the PBM’s massive footprint: It controls nearly one-quarter of the PBM market, and boasts a network of over 83 million members. This will further solidify its selectees’ already established market positions: Livongo, Omada, Propeller, and Welldoc are among the US’ top DTx providers by total amount of funding received and have struck deals with entrenched healthcare players to spur commercialization and adoption. Livongo expects is recent deal with the Federal Employees Health Benefits Program — its largest contract to date — will afford it 45,000 new members, whereas Propeller’s tie-up with Aptar grants it access to the pharmaceutical company’s customer base, for example.
  • This means smaller players new to the DTx scene may get overlooked — which could detriment their ability to scale. When Express Scripts and CVS Caremark revealed their plans to facilitate digital health adoption among payer customers and their members, DTx providers looking to grow were likely excited at the prospect of earning spots: Driving enrollment is a major hurdle for DTx developers — and, because most operate under a business-to-business-to-consumer model, scoring tie-ups with industry incumbents is key. And, recently, we’ve seen pharma companies that previously demonstrated huge interest in the space backpedal on partnerships and investments — calling into question whether relying on pharma as a channel of growth is sustainable for DTx firms looking to scale. But if PBMs are only tapping players that have already accrued quite a bit of business and mindshare in the digital health realm, we might see the gap between these companies and smaller, newer ones widen.