Digital Therapeutics Market Size, Share & Trends Analysis Report By Application (Diabetes, Obesity), By End Use (Patients, Providers, Payers, Employers), By Region, And Segment Forecasts, 2024 - 2030

Digital Therapeutics Market Size & Trends

The global digital therapeutics market size was estimated at USD 6.2 billion in 2023 and is expected to grow at a CAGR of 27.2% from 2024 to 2030. Market growth is primarily driven by the cost-effectiveness of digital health technology for providers & patients and rising smartphone penetration in developed & developing countries. Increasing demand for patient-centric care & integrated healthcare systems are expected to drive the market. Supportive reimbursement, the COVID-19 pandemic, early signs of reimbursement, and the rising incidence of chronic diseases are also expected to fuel the market growth.

The rise in internet penetration across the globe has had a positive impact on the market. According to the GSM Association (GSMA) statistics published in the Mobile Economy 2024 report, around 5.6 billion people across the globe subscribed to mobile services in 2023, and the number of unique mobile subscribers is expected to reach 6.3 billion by 2030. For instance, as per the Mobile Economy 2023 report, smartphone penetration was around 76% in 2022 and is expected to reach 92% by 2030. As this number grows, the awareness and adoption of intelligent health monitoring is anticipated to improve.

Continuous improvements in network infrastructure and coverage are expected to improve the demand for digital therapeutics. Mobile network operators perceive digital health and digital therapeutics as investment opportunities due to the increasing smartphone adoption. As per a report published by GSMA in 2023, the global penetration of 5G is estimated to be 54% by 2030. In addition, the increased bandwidth and the low latency of 5G are anticipated to facilitate the sharing of images & videos with higher resolution, increasing the quality & value of virtual interaction. This will help reduce the need to visit a hospital or clinic and benefit remote patients who may not have easy access to a medical facility or hospital. 

The COVID-19 pandemic notably propelled the rate of change in digital therapeutics by accelerating regulatory flexibility, thus expanding access to digital health products and fueling patient demand. The pandemic has increased demand for accessible and convenient digital health solutions. For instance, the guidelines released by the FDA in April 2020 stated that for the duration of the pandemic, it would enable the use and distribution of digital health therapeutic devices for psychiatric disorders. Thus, vendors can commercialize their solutions without complying with usual regulatory requirements, provided the devices do not create any undue public health emergency. 

The increasing incidence of chronic diseases significantly contributes to the market's growth. As per CDC's National Center for Chronic Disease Prevention and Health Promotion, 6 in 10 American adults suffer from a chronic disease, while 4 out of 10 adults have two or more chronic diseases. For instance, in January 2024, Amazon Health initiated a new Health Condition Programs program targeting chronic health issues. This new effort allows consumers to explore digital health advantages aimed at managing chronic diseases, including diabetes and hypertension. Moreover, chronic lung disease, cancer, Alzheimer's disease, diabetes, cardiovascular diseases, and chronic kidney disease have been identified as leading causes of death and disability in the country. 

The regulatory landscape for digital therapeutics is becoming favorable, with increasing recognition of their potential benefits. This is encouraging more investment and development in digital therapeutics (DTx) and making it easier for companies to bring their products to market. There is a growing movement towards value-based care, which emphasizes the quality and effectiveness of care over the quantity of services provided. Digital therapeutics products are suited to value-based care models, as they can be shown to improve patient outcomes and reduce healthcare costs. 

Recent regulatory changes, such as the FDA's establishment of the Digital Health Center of Excellence and new reimbursement codes for remote therapeutic monitoring (RTM), further support the adoption of DTx. Remote therapeutic monitoring codes (98975, 98976, 98977, 98980, and 98981) specify initial setup, education, and device provision, plus two codes for clinician time spent on RTM treatment. These codes support clinical staff in performing RTM remotely, aligning with existing remote and chronic care policies.

Market Concentration & Characteristics

The market is marked by a high degree of innovation. According to recent data, as of April 2024, there are 739 digital therapeutics devices in various stages of development worldwide, with 649 actively being developed. This includes 390 products in the early stages and 259 in the later stages. Key players in this market include companies such as Alex Therapeutics, Pear Therapeutics, and Click Therapeutics, among others, which are innovating and launching products. For instance, in November 2023, AstraZeneca launched Evinova, a new health technology division to drive innovation throughout the life sciences industry. This division will focus on enhancing the conduction of clinical trials and improving health results.

In recent years, both the U.S. and Europe have taken significant regulatory steps to promote the development of digital health technologies, impacting the market. For instance, in the U.S., the FDA's 2017 Digital Health Innovation Action Plan, part of the 21st Century Cures Act, introduced a precertification program allowing low-risk digital health software to be marketed with minimal oversight and reclassified certain medical software to be no longer regulated as medical devices. Key U.S. laws include HIPAA, the FD&C Act, the FTC Act, and the FTC's Health Breach Notification Rule, ensuring privacy, data security, and safe app performance.

The market is witnessing a high level of mergers and acquisitions (M&A) activity. Major healthcare and technology companies are acquiring smaller, innovative firms to enhance their product portfolios and leverage advanced technologies. For instance, in May 2024, digital therapeutics company Akili, known for its video game treatment for ADHD, will be acquired for USD 34 million. Akili is set to merge with Virtual Therapeutics to form a larger digital health organization.

Product expansion in the market involves introducing new & advanced products and solutions to expand the company’s position in the market. For instance, in October 2023, Better Therapeutics, Inc., a prescription digital therapeutics (PDT) for cardio-metabolic diseases, announced the launch of AspyreRx. This is the cognitive behavioral therapy app authorized by the U.S. Food and Drug Administration as a Class II device for treating adults with type 2 diabetes.

Application Insights

The diabetes segment dominated the market with the largest market share of 29.36% in 2023 and is expected to register the fastest CAGR over the forecast period. Factors driving the segment growth include the growing prevalence of diabetes and other related chronic diseases. According to a 2023 report by the Institute for Health Metrics and Evaluation, over half a billion people globally are living with diabetes, impacting men, women, and children of all ages in every country.

Obesity held the second-largest market share due to the growing obesity rate globally. Digital therapeutics provide cost-effective solutions for treating many chronic diseases, which is expected to fuel the segment's growth in the near future. CVDs and smoking cessation, along with obesity, are expected to demonstrate significant growth rates during the forecast period.

End Use Insights

The patient segment holds the largest market share of 34.08% in 2023 and is anticipated to register the fastest growth rate over the forecast period, owing to patients' rapid adoption of digital therapeutics. Patients are provided with care programs that are personalized and based on scientific evidence. Digital therapeutics also improve access to care for people, especially those from rural and remote areas. It can help providers monitor patients in real time, identify the gap in care, and provide timely interventions. It improves the efficiency of care delivery through evidence-based care therapies. This solution can reduce the need for physicians to intervene frequently in managing people with chronic conditions.

On the other hand, the provider's segment holds the second-largest market share. The growth of the providers' end use segment can be attributed to more providers leveraging digital therapeutics to support and deliver medically proven therapies outside of a care setting and provide reliable patient engagement. Payers are increasingly interested in covering digital therapeutics, which shows a significant growth scope. Also, they are encouraged to undertake initiatives by business models that facilitate adherence and enhance efficacy while reducing costs. 

Regional Insights

North America dominated the market with a revenue share of 40.43% in 2023. The overall market in the region is expected to grow significantly over the forecast period owing to the increased use of digital health products and favorable reimbursement scenarios that focus on improving quality of life through improved tracking & diagnostics. Factors such as rapid growth in the adoption of smartphones, advancements in coverage networks, acute shortage of primary caregivers, and rise in prevalence of chronic diseases, geriatric population, costs of healthcare, & need for improved prevention & management of chronic conditions are driving the growth of digital therapeutics in North America. 

U.S. Digital Therapeutics Market Trends

The digital therapeutics market in the U.S. held a majority of revenue share of over 85% in the North American region. The continuously changing digital landscape, rising consumerism in healthcare, the COVID-19 pandemic, and initiatives by key companies, including mergers, acquisitions, funding, etc., are key factors fueling market growth. For instance, in October 2021, Click Therapeutics, Inc. received USD 52 million in Series B funding from multiple investors. This enabled the development and commercialization of the company’s prescription digital therapeutic pipeline while also helping it advance its platform capabilities. 

Europe Digital Therapeutics Market Trends

The digital therapeutics market in Europe is expected to gain momentum over the forecast period due to healthcare providers' and patients growing adoption of apps. The presence of developed economies, such as Germany, the UK, France, Spain, & Italy, is expected to fuel the market in Europe during the forecast period. The EC’s Digital Single Market Strategy can give consumers and businesses access to online services & goods across Europe, providing necessary conditions for the growth of the digital network & allied services, which is expected to help maximize the growth potential of the European economy. 

The UK digital therapeutics market is experiencing rapid growth, driven by increasing demand for evidence-based solutions to manage chronic diseases such as diabetes, mental health disorders, and cardiovascular issues. Factors contributing to this expansion include the rising prevalence of chronic conditions, heightened awareness of proactive healthcare management, and the convenience offered by digital solutions. The market encompasses a variety of products that can be utilized independently or alongside traditional therapies, emphasizing the importance of clinical validation and user-friendly design. In addition, the growing penetration of smartphones and healthcare applications supports the adoption of digital therapeutics among consumers, marking a significant shift towards integrated and patient-centered care in the UK healthcare landscape.

The digital therapeutics market in Germany is anticipated to grow due to its well-established healthcare infrastructure, availability of technologically advanced & connected medical devices, and easy access to patient health information. Moreover, the increasing incidence of lifestyle-associated disorders creates a demand for personal health monitoring devices, which is anticipated to boost the market over the forecast period. Furthermore, initiatives by government and private players in the country are also driving the market's growth. For instance, introducing the Digital Healthcare Act in 2019 established the Digital Health Applications (DiGA) program, which provides a streamlined pathway for evaluating, listing, and reimbursing DTx products. 

Asia Pacific Digital Therapeutics Market Trends

The digital therapeutics market in Asia Pacific is anticipated to witness substantial growth, with the fastest CAGR over the forecast period, due to increased government spending on healthcare and high demand for IT services. The demand for healthcare IT systems has been growing as they enable efficient management of hospitals' clinical, financial, and administrative aspects. An increase in demand for adequate healthcare, improved access to the internet, and a rise in smartphone penetration are the factors facilitating a rapid increase in the Asia Pacific market. 

Japan digital therapeutics market is expected to grow over the forecast period, owing to the advancing digital infrastructure and the growing senior population. In addition, the Ministry of Health, Labor & Welfare launched several initiatives to improve existing healthcare infrastructure. In April 2021, Jolly Good, Inc. established a specialized DTx Division to develop digital therapeutics using VR and AI technologies. The company planned a corporate expansion of digital therapeutics worldwide. 

The digital therapeutics market in China is experiencing rapid growth, driven by increasing chronic disease prevalence and strong government support for digital health initiatives. Key players in the market include Alibaba Health, WeDoctor, and Omada Health, which are leveraging digital technologies to provide evidence-based therapeutic interventions through software and mobile applications. Technological advancements and the growing acceptance of digital health solutions among consumers further fuel the market's expansion. For instance, in February 2023, NERVTEX, a company based in China that specializes in digital therapy solutions for neurological conditions, received authorization from the China National Medical Products Administration for its artificial intelligence-driven software designed to analyze movement disorders. 

Latin America Digital Therapeutics Market Trends

The digital therapeutics market in Latin America is expected to grow owing to rapid technological advancements and increasing digitalization. This can be attributed to various factors, such as increased healthcare awareness and the availability of technically advanced procedures for diagnosing and treating critical diseases. The increasing internet penetration has also led to the growing use of e-prescribing systems in the region. Furthermore, regional governments are boosting their investment, while local and global private sector firms are investing significantly in the area to improve their footprint. 

Brazil digital therapeutics market is witnessing significant growth, driven by an increased awareness of the benefits of digital health solutions among both healthcare providers and patients. This market's expansion is further fueled by supportive government policies to integrate digital solutions into the national healthcare system and growing investment in health tech startups. As access to smartphones and internet connectivity continues to increase across the country, digital therapeutics are becoming increasingly accessible, thereby driving growth in the country. 

Middle East & Africa Digital Therapeutics Market Trends

The digital therapeutics market in MEA is expected to increase due to the growing smartphone use in this region. This is expected to facilitate adopting connected health services in the MEA, resulting in market growth. Advancements in healthcare are expected to boost the adoption of digital health solutions, including digital therapeutics. Growing internet usage in the healthcare sector facilitates various healthcare practices, equipment functions, patient database maintenance, etc., which is expected to drive market growth. 

South Africa digital therapeutics market is growing at a slower pace, majorly due to a need for established healthcare infrastructure and limited awareness regarding technological advancements. Although the South African market is in the nascent stage, an increase in the adoption of advanced technologies in healthcare is expected to boost the market. For instance, The National Digital Health Strategy for South Africa, from 2019 to 2024, aims to strengthen governance in the digital health sector, establish strong integrated platforms to advance information system development, and build the necessary infrastructure in collaboration with various government departments.

Key Digital Therapeutics Company Insights

The global market is highly competitive and dominated by a few renowned companies. Participants are adopting various strategies, such as mergers, partnerships, collaborations, and acquisitions, to enhance their marketplace presence. 

Recent Developments

• In May 2024, Otsuka announced the launch of a subsidiary focused on data and technology. This entity, named Otsuka Precision Health, will commercialize Rejoyn, a digital therapeutic specifically designed for individuals suffering from major depressive disorder.

• In January 2024, Eli Lilly and Company announced the launch of LillyDirect, a digital healthcare platform for U.S. patients managing obesity, migraine, and diabetes. LillyDirect provides a suite of disease management tools, enabling personalized support, access to independent healthcare providers, and the convenience of direct delivery of certain Lilly medications to homes through third-party pharmacy services.

• In November 2023, Curavit Clinical Research, a virtual contract research organization, introduced a new service for clinical trials focused on Health Economics and Outcomes Research (HEOR). This latest inclusion in clinical trials aims to give pharmaceutical companies a deeper understanding of their product's value and potential in the market.

• In July 2023, Big Health, known for its non-pharmacological digital mental health solutions, announced the acquisition of Limbix, a company specializing in digital therapeutics for adolescents and young adults experiencing depressive symptoms. This acquisition allows Big Health to broaden its array of therapeutic offerings, adding SparkRx, aimed at treating depression in adolescents, and a product under development for adolescent anxiety to its established programs. These flagship programs include Sleepio, designed to combat insomnia, and Daylight, to alleviate anxiety, catering to individuals 18 years and older. 

Digital Therapeutics Market Report Scope

Global Digital Therapeutics Market Report Segmentation

This report forecasts revenue growth at regional and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global digital therapeutics market based on application, end use, and region:

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Diabetes

  • Obesity

  • CVD

  • Respiratory Diseases

  • Smoking Cessation

  • CNS Diseases

  • Others

• End Use Outlook (Revenue, USD Million, 2018 - 2030)

  • Patients

  • Providers

  • Payers

  • Employers

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

    • Denmark

    • Sweden

    • Norway

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Thailand

  • Latin America

    • Brazil

    • Argentina

  • Middle East & Africa

    • South Africa

    • Saudi Arabia

    • UAE

    • Kuwait