Digital therapeutics company Big Health has had a summer to remember.
The company announced Wednesday that its digital therapeutic for cognitive behavioral therapy, DaylightRx, received clearance from the Food and Drug Administration, meaning providers can prescribe it to patients. A month ago, the FDA approved its SleepioRx therapy for insomnia disorder. And in July, the Centers for Medicare and Medicaid Services published its 2025 Medicare Fee Schedule proposal, which should benefit Big Health because it included payment for FDA-cleared digital mental health treatments.
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CEO Yael Berman joined the company in April, succeeding Arun Gupta, who was named executive chairman. Berman previously was a strategic advisor at Optum.
“The first few months have felt like dog years, which I consider a good thing,” Berman said.
Berman said the FDA clearances and proposed fee schedule represent a turning point for Big Health and digital therapeutics companies at large, many of which have struggled with the lack of reimbursement and adoption from providers and patients. The interview has been edited for length and clarity.
What do the FDA clearances mean for your business?
Patients have been seeking non-drug treatment options, and this represents an alternative for those who don't want to take drugs at the point of care. More generally speaking, it's a huge opportunity for us. Right now, the employer business is really strong but there's a whole group of folks, the Medicare and Medicaid populations, who don't have access to these treatments. The clearance and the CMS codes will open up the opportunity for reimbursement for these treatments.
How does the fee schedule proposal affect Big Health?
It proposes a rule to include, for the first time, payment for FDA-cleared digital mental health treatments. It’s a very promising pathway to scale access to both SleepioRx and DaylightRx as well as similar digital therapeutics that are deployed in clinical practice. This would make it covered for all Medicare fee-for-service members. We would expect managed care plans to follow with coverage.
The codes that companies like Pear Therapeutics were using were not covered by Medicare. They were solely created for payers to opt in or opt out. So payers had to make one-off decisions to cover and price it, which is an uphill climb if you’re the digital therapeutic company trying to convince them versus now just pointing at the government codes and saying, “This is a critical part of people’s care.”
What does your go-to-market strategy look like?
Even before these clearances, we've been working with a number of health systems and payviders to offer our solutions to their populations and figure out all the intricacies of provider workflows that have to be adapted. We also have customers in the U.K. It’s a different system but there is a lot of learning there that will translate to our go-to-market in the U.S. We intend to continue to expand our presence with health systems and large provider groups. And then there are a number of other potential distribution channels that we're going to be exploring.
What is the biggest concern that’s keeping you up at night?
Providers in this country have so much that they already need to do during an appointment with a patient. The biggest obstacle is making sure it's as easy as possible for them to make these therapeutics available to their patients.
There's also the speed of payer coverage. What’s good is we not only have enormous evidence of the efficacy of our products and the FDA approvals, but we also have been in the market for the last 10 years with employer customers. It’s a lot different than if you were bringing a new drug to market. Payer coverage will take a while because of how those organizations make decisions but there’s been positives for us relative to what’s been true for other digital therapeutics companies.
