By allowing doctors to prescribe their patients apps, Germany hoped to become a pioneer in the digital health solution field. 18 months on, with the number of prescriptions increasing, digital health apps look to be gaining some real momentum. So are we at the point where these so called DiGAs (Digitale Gesundheitsanwendungen – digital health applications) can be labelled a success? In this article I’ll explain why, in my view, we have not yet reached that point, and look at where digital app developers could do better.
Since Germany’s Digital Health Applications Ordinance (DiGAV) entered into force on April 20, 2020, German doctors have been able to prescribe their patients digital health apps. One effect of the ordinance is to oblige health insurers to reimburse these so called “DiGAs” (Digitale Gesundheitsanwendungen – digital health apps) or DiPAs (Digitale Pflegeanwendungen – digital care apps). DiGAs are subject to a relatively quick and painless approval process. And just like that, Germany, previously something of a laughing stock following missteps like repeated delays in introducing digital health records, has found itself a global leader in the hot field of digital health.
So, over 18 months later, how are things looking now? According to an article on the Gerechte Gesundheit website from November 10, 2021, 85 apps have been submitted for approval to the German Federal Ministry for Drugs and Medical Devices (BfArM), of which 19 have been approved, 49 were withdrawn after further discussion with the Ministry, and five were rejected. A total of 24 digital health apps are currently eligible for prescription.
According to surveys by Handelsblatt Inside, the number of prescriptions rose from 3,000 in February 2021 to 38,000 in October.
So, despite the fact that sales and information channels are still fairly rudimentary, app prescribing does slowly seem to be taking off. So is everything coming up roses for the DiGAs?
Few digital health apps possess a ‘digital asset’
When I look at the digital health field right now, what strikes me most is that the majority of apps available on prescription are still technically very simple. With a few notable exceptions, DiGAs are mainly serving up existing information about symptoms, etc. repackaged in digital form. What seems to be missing from many apps is a genuine ‘digital asset’. That might be genuine personalisation, extended interactivity options, or a reward system or gamification to boost customer engagement.
It’s a bit like the early days of the internet. For me, most DiGAs are still a bit Web 1.0 – mainly focused on imparting information. In an era where factors like interactive content and machine learning algorithms are raising the user experience to new heights, apps just have to be that much better – especially if they want people to pay for them. Providers need to be thinking about why patients should choose their app once multiple apps for the same condition become available. DiGAs need to become more Web 2.0.
Companies often underestimate app development costs and workload
On August 19, 2021, digital healthcare trade association Spitzenverband Digitale Gesundheitsversorgung issued a statement on the rationale for and necessity of DiGAs, and called for more courage, quality and pragmatism.
But a bit more is required than just these three qualities. Developing medical software is a highly complex undertaking, and that applies just as much to DiGAs. We’ve talked with lots of medtech companies, pharmaceutical businesses and start-ups on this issue and we find that companies often underestimate the costs and workload that goes into developing a digital health app. This is especially true where the app is intended to do more than simply serve up book information in a form appropriate for mobile devices. And even taking into account the accelerated approval process, companies still underestimate the regulatory requirements for DiGAs. These requirements are often the hurdle at which the really innovative elements of an app fall.
So what are the key points when developing a digital health app? How can companies create apps that both meet regulatory requirements and draw in users by offering genuine added value? What’s needed are “traditional” values from the software as a medical device (SaMD) development process. There are, in my view, five key points:
2. Think about regulatory issues from the outset
3. Agile development methods
4. Large enterprises need to think more like start-ups, start-ups need to think more like large enterprises
1. Patient Centricity
When developing a digital health app, we recommend that you make the effort to look at things from the perspective of the user right from the start of the development process. That starts by asking yourself the question: Do patients who suffer from the condition you’re interested in actually use smartphones? As development continues, you should be collecting regular feedback from users.
We find that companies are often very unsure about when and how to take patient feedback into account. Our position on this issue is clear – patient feedback needs to be at the heart of the development process from the outset. For a regulated user-centred design process, this might be achieved using interviews and supervised prototyping, for example. This is essential if patient needs are to be identified and incorporated into the design process early in development.
With digital products, the user experience (in this case the patient experience) is one of the biggest factors in determining whether a product succeeds or fails. More and more digital health apps covering the same health condition are likely to be launched over the next few years. Once this happens, it will be users who decide which app offers them the most long-term value. At this point, apps that work and that patients recognise as offering genuine medical benefit will have a big edge.
2. Think about regulatory issues from the outset
In the case of medical devices, including SaMDs, the legal manufacturer (or in our case the person with overall responsibility for the product life cycle) is in principle responsible for product safety and efficacy. Start-ups in particular tend to boast cutting edge UX experts, but very few software developers with experience of development in a regulated environment. They are often unfamiliar with Digital Health Applications Ordinance requirements for ensuring that their app is covered by health insurers.
I suspect that this is one of the reasons why four applications were rejected and a total of 38 withdrawn. The latter may also in part be down to the fact that the approval process for digital health apps cannot be put on hold. If an app is rejected, it’s rejected for good.
It’s also more than possible that some providers had to remove certain features from their products to successfully complete the DiGAs approval process. The approval process for digital assets in particular – such as use of artificial intelligence (AI) – can be very complex. When developing a digital health app, we therefore strongly recommend thinking about regulatory issues from the outset.
And it’s not just start-ups that struggle with these approval processes. Pharmaceutical companies are generally better set up for approval processes and do at least have some experience with relevant standards in their core area. Nonetheless, they too sometimes lack experience with the approval process for medical devices – a category which also includes medical software/apps, and therefore DiGAs. In this case, one solution is to partner with an external provider while simultaneously building in-house capacity.
3. Agile development methods
Traditional stage-gate processes are not suitable for such a scenario. Continuously integrating user or patient feedback into the development process while simultaneously ensuring compliance with regulatory requirements for the approval process is far from straightforward. But there’s a much bigger challenge for companies developing digital health apps. Technical uncertainties, combined with the fact that the precise needs of doctors and patients are often unclear, mean that producing a precise specification for the final product at the start of the development process is often impossible.
If that’s the case, the conventional waterfall model simply won’t work. You need agile methods. These enable you to get to grips with the major technical risks right at the start of a project and then adapt your objectives based on what you learn in the process. They are also more reliable when it comes to hitting deadlines and budgets.
They also offer another potentially crucial advantage when developing digital health apps in particular – they enable user testing to be performed on a minimum viable product (MVP) at an early stage of development. It is sometimes even possible to generate enough data using these very early versions of the product to start training your algorithm. If your solution is then granted provisional approval as a DiGA, this will be supplemented with further data generated by the app in the field over the first year of use.
There is, however, a catch with agile development methods. Introducing agile methods is far from trivial, especially in larger enterprises with fixed organisational structures. Agile organisational structures should not just be parachuted in for a single project – they need to be developed as part of a medium to long-term strategy. An external partner like Zühlke can help you get started with agile methods and simultaneously put together the right teams for future product development.
4. Culture and mindset
For many start-ups, agile development methods are nothing new. In this respect, they are ideally set up for developing software solutions. It’s very important that the user experience or any specific features are market tested and then incrementally modified, extended or disabled depending on customer feedback. After all, digital solutions don’t hit the market as finished products with a full set of features.
To keep investors happy, start-ups are often under pressure to deliver rapid results. Some start-ups therefore prefer to get something out of the door quickly with the aim of demonstrating that the product has real market potential. This can mean that killer features which are technically complex get left out of the first release. In doing so, however, start-ups may be selling themselves short – investors want to invest in a product that is not easily replicated. Wherever possible start-ups and investors should be more patient, and should ensure that the focus remains on offering real value to end users, rather than hitting the earliest possible launch date. That’s not to ignore that fact that speed is a big factor for a successful product launch, but it is nonetheless important to strike the right balance between speed and new product features. Ultimately, it’s about creating customer experiences, not just another app.
Slower development of digital health apps at pharma and medtech companies?
Pharmaceutical and medtech companies, on the other hand, have grown up with the idea that the marketable product has to be absolutely perfect, as any imperfection would expose users to unacceptable risk. Compared to non-medical or inexperienced start-ups, these companies and the people who work at them therefore tend to have a different perspective on risk appetite, speed vs. accuracy in decision-making, process accuracy and IP management. This is one reason why pharmaceutical companies have a harder time with and take longer over in-house development of digital health solutions than start-ups.
In many cases, pharmaceutical companies would be better off abandoning their normal perfectionist mindset and getting an initial MVP on the market faster. This enables them to build up their experience and incrementally improve the product, rather than going for a big bang launch and hoping for the best. That means accepting that mistakes can happen.
Another area where pharmaceutical companies can learn from start-ups is internal alignment, especially between technology-focused and commercial departments. This is one area where their size gives start-ups a natural advantage. One thing that pharmaceutical and medtech companies often underestimate is that every technology – from a cloud backend or video streaming, to a chatbot or personalised AI-based recommendation system – impacts the commercial side of the business. It is therefore vitally important that decisions about technologies are not left solely to the development team, but are coordinated with commercial departments.
5. Are partnerships the silver bullet?
Pharmaceutical companies should therefore be a bit more like start-ups, and start-ups should take on board traditional pharmaceutical sector values. A third potentially highly rewarding option also presents itself – a partnership between a pharmaceutical/medtech business or businesses and a start-up or start-ups, ideally facilitated by a partner which understands both types of business.
For pharmaceutical and medtech businesses, developing digital applications offers lots of benefits. They can deliver new revenue streams, or alternatively a companion app or telehealth solution can help patients manage their drugs and enhance drug efficacy. However, pharmaceutical and medtech companies often lack development capabilities or experience in basic areas such as user experience. Before every digital project, therefore, pharmaceutical and medtech companies need to ask themselves the question: make, partner or buy?
Start-ups on the other hand have a keen interest in the strong links that pharmaceutical and medtech companies enjoy with doctors and other healthcare providers. In addition, potential partners from the pharma and medtech sectors possess invaluable biomedical expertise and often large data sets. Both of these can be a big help when it comes to developing a digital health app.
Start-ups complement pharmaceutical/medtech companies perfectly, each having very different strengths. That's why I'm sure we will be seeing lots more joint ventures, partnerships and takeovers in the digital health app field and in particular with DiGAs. As ever, when two partners with very different cultures come together, there is the potential for conflict. If that’s the case, bringing in an external facilitator like Zühlke can really pay dividends.
Given how new the digital health apps field is and given its current level of maturity, the “DiGAs 1.0” undoubtedly serve a purpose. Many of these apps can in fact be looked at more as MVPs, and are likely to undergo further development in coming months. Major pharmaceutical and medtech companies are only just starting to get in on the digital health app act. In July, Sanofi became the first major pharmaceutical company to announce its own DiGA, an insulin dose calculator called My Dose Coach.
It will be fascinating to see how things develop in this exciting field. Will Germany manage to transform itself into a digital health app pioneer after all? Watch this space!
As an innovation partner, Jan-Philipp supports banks and other financial services companies in the development of data-driven business models and digital solutions and processes. He brings experience as a consultant from a technology and management consulting firm and thus extensive knowledge in the areas of Data, Machine Learning and Blockchain.