Pear Therapeutics, once a leader in prescription digital therapeutics (PDT or DTx), has recently filed for bankruptcy. In this blog post, we’ll explore the history of the company, its milestones, and the reasons behind its unforeseen downfall, while also shedding light on its competitors in the digital therapeutics market.
Pear Therapeutics: History
Established in 2013 by Dr. Corey McCann, Pear Therapeutics aspired to revolutionize the treatment of various disorders by merging the power of software and medicine. Based in Boston, Massachusetts, the company aimed to develop, manufacture, and distribute FDA-approved software applications that would work in tandem with conventional medications to enhance their effectiveness.
Pear Therapeutics’ Key Achievements
Throughout its existence, Pear Therapeutics managed to obtain three FDA approvals for its products, establishing itself as a significant player in the digital therapeutics industry:
- reSET (2017) – The first FDA-approved PDT, reSET is designed for treating substance use disorder. This groundbreaking achievement demonstrated that software could be clinically effective in treating patients.
- reSET-O (2018) – A follow-up to reSET, this PDT is aimed at helping patients with opioid use disorder as an adjunct to outpatient treatment. It includes buprenorphine and contingency management, a behavioral therapy approach.
- Somryst (2020) – The first FDA-approved PDT for chronic insomnia, Somryst offers cognitive behavioral therapy for insomnia (CBT-I) through a digital platform, making it more accessible for patients who might not have access to in-person therapy.
Partnerships and Collaborations
Throughout its journey, Pear Therapeutics partnered with several industry giants to develop and distribute its PDTs. These collaborations included deals with Novartis, Sandoz, and Blue Cross Blue Shield, among others.
The Path to Bankruptcy: Crucial Factors
Market Penetration and Adoption Challenges
Despite the groundbreaking nature of its PDTs, Pear Therapeutics faced significant challenges in gaining market traction. The healthcare industry is often slow to adopt new technologies, and the novel concept of PDTs faced resistance from both physicians and insurers.
One of the most significant hurdles for Pear Therapeutics was obtaining adequate reimbursement from insurance companies. Many insurers were hesitant to cover the costs of the treatments, which made it difficult for patients to access them.
High Development and Marketing Costs
Developing PDTs is a time-consuming and costly process. Pear Therapeutics had to invest heavily in research, development, and clinical trials to bring its products to market. Additionally, the company faced considerable marketing expenses to promote its PDTs in a market dominated by traditional pharmaceuticals.
Some critics argue that Pear Therapeutics’ management made a series of missteps that ultimately contributed to the company’s downfall. This includes an overemphasis on partnerships at the expense of product innovation, and a lack of clear, focused strategies to address the challenges faced in the market.
COVID-19 Pandemic Impact
The COVID-19 pandemic brought about significant challenges for Pear Therapeutics, particularly in the area of patient access. As healthcare providers struggled to adapt to the new normal, digital therapeutics adoption was deprioritized, and this further impeded the company’s growth.
Competitors in the Digital Therapeutics Space
While Pear Therapeutics was a pioneer in the prescription digital therapeutics (PDT) field, it wasn’t the only company trying to make its mark. Some of the key competitors in the digital therapeutics market include:
Akili Interactive is a Boston-based company that has developed EndeavorRx, the first FDA-approved video game for treating attention deficit hyperactivity disorder (ADHD) in children. EndeavorRx is a digital intervention that aims to improve attention function in pediatric patients with ADHD.
Voluntis, a French digital therapeutics company, specializes in creating software to assist patients in managing chronic conditions. Their flagship product, Insulia, is an FDA-cleared digital therapeutic designed to help patients with type 2 diabetes manage their insulin dosages.
Big Health, a UK-based company, focuses on developing digital therapeutics for mental health. Their two major products are Sleepio, a digital CBT-I program for insomnia, and Daylight, a digital CBT-based program for anxiety. While not FDA-approved like Pear’s Somryst, Sleepio has demonstrated clinical effectiveness in multiple studies.
Omada Health is a San Francisco-based digital health company that offers a suite of digital programs aimed at chronic disease prevention and management. Their flagship program, the Omada Diabetes Prevention Program, is a CDC-recognized digital intervention to help patients with prediabetes make lifestyle changes to prevent or delay the onset of type 2 diabetes.
Click Therapeutics, a New York-based digital therapeutics company, is focused on developing software as a prescription medical treatment. One of their most prominent products, Clickotine, is a digital smoking cessation program designed to help users quit smoking. The company is also working on a digital treatment for major depressive disorder called CT-152, currently in clinical trials.
Pear Therapeutics was a trailblazer in the field of prescription digital therapeutics, achieving FDA approvals and forging partnerships with industry giants. However, the company’s inability to overcome market penetration, adoption, and reimbursement challenges, coupled with high development costs, management missteps, and the impact of the COVID-19 pandemic, ultimately led to its bankruptcy. With multiple players such as Akili Interactive, Voluntis, Big Health, Omada Health, and Click Therapeutics still in the game, it remains to be seen how the digital therapeutics landscape will evolve and what future innovations may emerge.