Building the right Dtx business model for long-term growth and revenue

August 25, 2023
There is vast potential for growth in DTx products and services. But to assure long-term success, providers will have to follow a business model that ensures consistent revenue, and partner with stakeholders that fit their offering.
A girl is solving a super complex problem regarding healthcare.

By 2030, revenues in the Digital Therapeutics (DTx) market are predicted to exceed US$ 24 billion, according to a study by Astute Analytica. Perhaps why in Q1 2022, digital health funding closed with approximately US$ 6 Billion in just the United States.

It is obvious that DTx is the biggest revolution to occur in the healthcare industry in some time, and investor enthusiasm is just a reflection of the potential for growth.

Addressing the 4 A’s

In the long run, the entities that’ll create stable, useful and popular healthcare platforms and products will be the ones that successfully address the 4A’s: Awareness, Accessibility, Affordability and Accountability.

To thrive in a highly competitive market, the platform or service will have to break through clutter and stand out (Awareness), drive functionality and ease of use (Accessibility), limit the economic burden on patients (Affordability), and provide data that is clinically reliable (Accountability).

For long-term sustainability and growth of the business, it is critical to ensure consistent revenue throughout the various stages of growth. This means implementing a business model that will monetise the service efficiently.

Depending on their strategy to drive adoption and ensure revenue, aspiring DTx entrepreneurs can look at building their business model around any one of the key stakeholders of the ecosystem. Each partnership comes with unique opportunities and challenges.

Healthcare employee using a laptop.

Partnering with Healthcare Professionals (HCP)

The HCP is the first person the patient turns to when they need reliable healthcare advice, and to manage their recovery from illness. Their influence over prescriptions, patient uptake and adherence makes the HCPcentral to the adoption of DTx products and services.

DTx services that help the HCP keep track of patient behaviour and their adherence to treatment regimens will be sought after by doctors, nurses and other healthcare professionals.


  • Patients will trust the service since it comes recommended by a medical professional who they trust and knows their medical history.
  • Adherence is almost guaranteed, since the HCP will be invested in the process and will monitor progress.

Benefit to the HCP

  • They get in-depth access to patient data.
  • Will help them stay connected to the patient beyond visits.
  • Help develop a better rapport and develop deeper relationships.


  • Patient pays for the device upfront or subscribes to the service.


  • HCP might be reluctant to prescribe since the patient has to bear the cost of the device and recurring expenses.
  • Patients might see this as an additional cost. Increases likelihood of the patient shifting to a ‘cheaper’ doctor.


Insurance provider employee using a laptop.

Partnering with insurance providers

Insurance providers will value the partnership with DTx services if they can show credible proof that their offering can reduce the cost of healthcare, and therefore, reduce payouts to their customers.  

Solutions that target at-risk individuals and help them adjust their lifestyles to prevent them from needing medical intervention in the first place, are prime candidates for partnering with insurance providers.


  • Guaranteed revenue for the duration of the contract.
  • Partnerships will drive affordability and increase accessibility.

Benefits for insurance companies

  • Prevention can be marketed as part of policy offering.
  • Companies can keep an eye on adherence, and reward good behaviour with lesser premiums.
  • Offer outcome-based incentives to motivate patients.



  • Service will be paid for by the patient, but cost can be baked into the policy premium.
  • Insurance providers can reduce the burden on the patient by partnering with Pharma companies to share the cost.




  • Most DTx services will have recurring consumable accessories which means recurring costs for the patient. They may not see the value in it, especially if they are healthy at the time of choosing a policy.

Lack of HCP supervision

  • Supervision by the HCP will be minimal since it has not been prescribed by them. Patients will have to make sure they stick to the requirements of the DTx service to take advantage of the incentives offered by insurance companies.

An employee holds a document and is using a laptop.

Partnering with employers

If the solution can be presented as an addition to the company’s existing employee health benefits and welfare package, large multinational corporations with tens of thousands of employees will be interested in partnering with DTx providers.

DTx companies that help people manage chronic illnesses that impact productivity like diabetes or asthma will be the ideal partners for employers.


  • Assured source of revenue and a captive market.
  • If the organisation is large enough, it will increase accessibility of the DTx offering.

Benefits for employers

  • Healthy employees mean fewer working hours lost to sickness and ill-health, which will lead to better productivity.
  • Can be presented as an added benefit to employees.
  • Will boost the company's image, showing that it cares about its people.


  • Service will be paid for by the organisation.
  • Companies can partner with their insurance provider and add it to existing group health cover plans.


  • Employers will have to maintain and process the data.
  • Organisation will have the burden of monitoring adherence.
Girl using computer

Partnering with Pharmaceutical companies

Pharma companies that want to be prepared for the digital future will be interested in partnering with DTx providers. It will help them get access to granular data about the efficacy of drugs, patient behaviour and treatment journey, while DTx companies can take advantage of the economies of scale, and wider access to HCPs and patients.


  • Assured revenue from long-term contracts.
  • Access to the wider network of all stakeholders in the healthcare industry.

Benefits for pharma companies

Better business

  • Improved reach and adherence of their products.
  • Opportunity to open up new markets.
  • Increased market share in existing markets.
  • Increased opportunity for drug sales by improving adherence.

Better insights

  • New data source for understanding the needs and behaviours of HCPs and patients.

Better brand building

  • Offering DTx services will help position the company as an innovator in the HCP's mind and help develop positive associations with the brand.


Sell the service

  • Since DTx solutions increase adherence to treatment and improve engagement with HCPs, companies will be willing to buy solutions in their therapy areas.

Monetise data and insights

  • Provide service to the Pharma company for free but sell raw or analysed and anonymised clinical data sets.
  • The pharma company can use the data for research or utilise it for clinical trial matching, getting FDA approvals and the like.


  • Most HCPs will not want to be associated with a service or product that is promoted solely by a Pharma company.
  • Pharma companies will want to ensure that only their offerings are prescribed on the basis of data or insights generated by the supported DTx services.

Selling directly to the patient

More and more people are interested in leading a healthy lifestyle, and consequently are open to using digital devices to quantify their health. The global pandemic only helped to accelerate this trend. This has opened up an opportunity for DTx providers to explore the Direct to Consumer (D2C) business model.

Digital therapeutic solutions that help regular people measure vital signs and keep track of their health, without needing the help of a healthcare professional, will find this model a natural fit.


  • Has the potential to evolve from a product or service into a healthcare brand.

Benefits to the patient

  • Can take readings and diagnose diseases on their own and at their convenience.
  • Will have more control over their disease because of better data and insights into the effectiveness of their treatment.
  • Will have better access to services like nutrition coaches, wellness training, and awareness programs.


  • Patients buy the device or buy a subscription to the platform.
  • DTx platforms can also sell supportive care, wellness products etc. to create additional monetisation opportunities.


  • Might be seen as an unnecessary expense by healthy people, or as an additional cost by existing patients.
  • Recurring costs of accessories or testing material (if needed by the service) can be a barrier to adoption.
  • Multiple players with competing and similar claims will lead to an atmosphere of confusion and distrust.

Building partnerships and growing together

Digital therapeutics will transform the healthcare industry beyond recognition in the coming decade. More and more ‘MedTech’ and ‘Healthtech’ entrepreneurs will try to solve tough medical problems with innovative thinking and digital-first solutions.

Business plans that take into account the motivations and aspirations of existing stakeholders within the DTx ecosystem, and build mutually beneficial partnerships with them will do well. But the ones that will last the distance will be the ones that also keep a laser focus on the fundamentals of any business: growth, revenue and profits.

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