The EconomistFebruary 3rd 2018 Business 551L
UANN STOTTLEMYER has had diabetes
for 23 years, but it was only in 2016 that
her doctor prescribed a treatment that
changed her life. It has allowed her to bring
her blood-sugar levels under control and
lose weight. Yet this miracle of modern sci-
ence is not a new pill. It is a smartphone
app called BlueStar.
The program is one of a growing num-
ber of apps that America’s Food and Drug
Administration (FDA) has approved to
treat everything from diabetes to sub-
stance abuse. The FDAhas encouraged
firms to join a scheme that aims to stream-
line the regulatory process for such treat-
ments. There are many candidates: at least
150 firms globally are developing some
form of “digital therapeutic” (“digiceuti-
cal” in the lingo), says Mark Sluijs, who ad-
vises Merck, a big American drugmaker.
Unlike other sorts of digital health
apps, digiceuticals have been tested for ef-
ficacy, approved by regulatory agencies
such as the FDAand are prescribed by a
doctor. Mostgather data, either by asking
patients for information or by using sen-
sors, and provide real-time guidance. Dia-
betes apps, for instance, work with con-
nected monitors and use the information
to manage symptoms. Apps that help users
to stop smoking combine a breath sensor
with coaching on how to quit. Addiction-
fighting apps can be based on cognitive be-
havioural therapy.
Most apps are developed by startups,
many of which are based in and around
Boston. One such, Pear Therapeutics, has apipeline of treatments at various stages of
development, much like a conventional
pharmaceutical firm. These apps are
aimed at treating a range of conditions:
opioid addiction, schizophrenia, anxiety,
insomnia, post-traumatic stress disorder
(PTSD), depression and chronic pain. Pear’s
reSETapp, for instance, which treats disor-
ders involving the misuse ofalcohol, co-
caine and other stimulants, has been ap-
proved for sale and should be on the
market in early 2018. The app will be more
effective than conventional treatments,
claims Corey McCann, Pear’s chief execu-
tive. It carefully trains patients to recognise
daily triggers and cravings and to monitor
and track these with their doctor.
Another area of attention is medication
for attention-deficit hyperactivity disorder
(ADHD), on which Americans spend $14bn
annually. Akili Interactive, another startup,
recently completed a trial showing that a
computer game it has developed to treat
ADHDcan improve attention and inhibi-
tory control in children. If approved, the
game would be the first digital therapeutic
for this disease. As well as competing with
existing drugs, it may also appeal to par-
ents who are reluctant to medicate their
children forADHD.
Some digiceuticals will work better
alongside conventional drugs, rather than
on their own—opening up possibilities for
alliances between tech and pharma firms.
Voluntis, a startup, develops companion
software for specific medications or medi-
cal devices. These programs can monitor
side-effects, help manage symptoms and
connect patients with doctors and nurses.
Pharma firms and venture capitalists re-
main cautious, however. Only a few drug-
makers have invested in startups, and VCs
are waiting to see what happens with the
current crop of businesses, says Nikhil
Krishnan ofCBInsights, a data provider.
One reason for the reluctance is a lack of
rules for prescribing and paying for these
apps—a problem that a new lobbying
group, the Digital Therapeutics Alliance,
wants to tackle. Cultural hurdles have to be
overcome, too: many patients will find it
hard to believe that software can be as ef-
fective as a pill. Analysts estimate that the
market for digiceuticals will be worth a
modest $9bn by 2025.
Once accepted, however, digiceuticals
should take off and may well be created by
large pharma and tech firms as well. The
apps make it possible both to measure
whether patients are adhering to their
treatment, and to collect evidence on out-
comes. Barriers to entry for startups are
lower than for drugmakers, which need ac-
cess to costly laboratories and manufactur-
ing facilities. So many apps will compete to
treat the same disease, which should spark
very rapid innovation—a rare phenome-
non in medicine—and perhaps even to
lower prices, a rarer one still. 7Digital health (2)Pill crushers
Regulated health apps are starting to
compete with conventional drugsE
VEN in a business where the house al-
ways wins, Steve Wynn is used to win-
ning more than anyone else. The casinos
that the billionaire has built, from The Mi-
rage and Bellagio to Wynn Macau and
Wynn Palace, helped transform Las Vegas
and Macau from seedy gambling joints
into luxury high-roller destinations. His
fiercest rivals heaped praise on him as a vi-
sionary and perfectionist. His company,
Wynn Resorts, enjoyed a “Wynn pre-
mium” from analysts and investors.
Now he could lose control of his em-
pire. On January 26th the Wall Street Jour-
nalpublished an investigation detailing
numerous allegations that would amount
to a decades-long pattern of sexual mis-
conduct by Mr Wynn. The board of Wynn
Resorts has announced an inquiry by a
special committee into the reports, the ve-
racity of which Mr Wynn denies.
He has resigned as finance chairman of
the Republican National Committee.
Gaming commissioners in Nevada, Macau
and Massachusettsare conducting their
own inquiries. He could yet be pushed to
step down as chairman and chief execu-
tive of the firm he founded, in which he
holds a 12% stake. The market value of
Wynn Resorts, which had more than dou-
bled in just undera year to $20bn, has fall-
en by 15% since the report.
The Wall Street Journalreported that,
without informing his board, Mr WynnWynn ResortsLosing streak
Sexual-misconduct allegations against
Steve Wynn hurt his casino empireRien ne va pluspartnership with Stanford University, and
in future the firm is likely only to analyse
medical information from those patients
whose trust it has fully secured. Its services
will be opt-in; patients who find them-
selves in hospitals working with Alpha-
bet’s DeepMind, by contrast, are offered
opt-out consent mechanisms.
Earlier attempts by Google and Micro-
soft to offer patients a home for their digital
records obliged people to consider wheth-
er they trusted the two companies enough;
many decided the answer was no. If they
only have to decide whether their own
iPhone is sufficiently secure, many will be-
lieve that it is. Apple has so far lagged be-
hind other technology giants in earning
revenues from the booming market for
data. It may yet strike gold in the most
sensitive personal-data category of all. 72