Pricing & Contracting Strategy for a Digital Therapeutic in a Psychiatric Disorder

A US-based pharmaceutical company sought to understand the optimal net pricing strategy and potential contracting approaches, particularly among state Medicaid, for a cognitive behavioral therapy (CBT)-based digital therapeutic for the treatment of a serious mental illness.

We began by identifying appropriate pricing benchmarks to guide our efforts. Our team conducted a benchmarking analysis across select criteria, including target population, epidemiology, unmet need, product type, and level of innovation. To support this analysis, we created a database of oral and long-acting injectable antipsychotics, prescription digital therapeutics (PDTs), psychotherapy, and innovative medical devices. Via primary market research, we gathered more details regarding pricing, coverage, and utilization.

Next, we evaluated the product through primary market research with commercial and state-led payers (i.e., Medicaid) by assessing current / future management of relevant products, product impressions / value, net pricing and coverage approaches, and expectations regarding contracting. We deployed the Gabor-Granger methodology to understand optimal pricing ranges by channel, as well as formulary placement and utilization management considerations at different price points.  Finally, we developed strategic recommendations regarding optimal net pricing and contracting for the product.

Our work validated a core set of assumptions and helped drive the therapy’s pricing strategy with increased confidence. It enabled us to identify unique challenges and solutions to inform commercial planning for launch.