So what? Unprecedented adoption of telemedicine solutions during COVID has enabled remote consultations and biometric patient monitoring, whose impacts have been most notable in primary, chronic, and mental health care. The FDA’s first video game DTx approval expands the scope of current DTx formularies, helping close the digital loop between virtual doctor visits, diagnoses, treatment, and monitoring. Skepticism remains over digital therapeutics, particularly around their poor user engagement and attrition rates; however, developers like Akili, whose design team is headed by an ex-Star Wars art director and stacked with consumer gaming experts, believe that gamified treatment approaches that leverage psychology may help address these problems. Akili’s pipeline of future video game therapies focuses on autism, depression, Alzheimer’s (in partnership with Pfizer), and multiple sclerosis.

TLDR: Following $500+ million in funding, unicorn valuation, and FDA approval for its medication embedded sensor-patch device, DTx unicorn Proteus Digital Health filed for bankruptcy. Proteus and Otsuka garnered FDA approval for their jointly developed Abilify MyCite system, which combines Otsuka’s drug with Proteus’ ingestible sensor and wearable to treat schizophrenia. Earlier this year, Proteus and Otsuka terminated the partnership due to limited uptake by clinicians and patients with mental illness. Experts estimate the price of the generic drug itself was merely ~1% of the list price for the drug-device combination system (e.g., ~$20 for the generic vs. ~$1,650 for the system). Though drug adherence is a key unmet need in the mental health space, high prices without clear clinical outcomes and limited consumer interest have severely gated adoption by payers and clinicians, ultimately driving the bankruptcy filing. 

So what? Proteus’ bankruptcy comes in the wake of an up-and-down year for digital therapeutics. Despite buzz of a pharma "DTxit" amid break-ups of key pharma-digital partnership (e.g., Novartis/Pear, Sanofi/Onduo), recent acquisitions (e.g., Novartis/Amblyotech, Biofourmis/Gaido) and FDA approvals (e.g., Akili, etectRx) have restored confidence in the DTx space. As a pioneer in DTx, Proteus’ initial success and recent burnout serves as a warning to all DTx players eager to convert funding hype into sustained clinical adoption. In developing and scaling their products, DTx players should look to demonstrate value to payers and prioritize the patient experience. Proteus has announced plans to shift toward oncology and infectious disease, where they hope to appeal to payers and deliver clinical outcomes. Meanwhile, Otsuka has acquired the license to use Proteus’ tech in developing mental health treatments and will continue to sell the Abilify MyCite system. 

TLDR: Last week, the retail giant scooped up CareZone’s technology for medication management, including features that allow patients to scan insurance cards and drug labels to check coverage and set up home delivery. CareZone’s pharmacy logistics business was excluded from the deal, likely due to ongoing litigation with Cigna’s Express Scripts PBM. An insider to the deal suggested that Walmart paid $200 million. 

So what? It’s no secret that Walmart has been closely watching Amazon, CVS, and Walgreens’ strategies in the retail primary care space. In 2018, Amazon acquired PillPack ($753 million) to build out its digital “Amazon Pharmacy”, and has since piloted telehealth primary care and digital symptom checking offerings to its employees. CVS is on-target to open 1,500 HealthHUB primary care centers by the end of 2021, and Walgreens is rapidly ramping up primary care infrastructure via its partnership with VillageMD. In the past couple years, Walmart inked a deal with Anthem to lower OTC drug prices and basic medical supplies for its customers, entered acquisition talks with Humana (a la CVS-Aetna), and cut the ribbon on its first 2 standalone primary clinics. Now in talks with Verizon to equip its retail and medical operations with 5G, Walmart’s president of health claims that these initiatives are “just the start” of their strategy to revolutionize primary care by prioritizing low prices and convenience, analogous to their strategy in the retail space. Analysts estimate that 90% of Americans live within 10 miles of a Walmart store, positioning Walmart as a formidable primary care competitor.