Cost of Digital Diabetes Solutions Averages at $280 Quarterly; Reimbursement Drives Prices Up

The latest whitepaper from R2G’s “Global Digital Health Pricing and Business Model Benchmark” project looks closer into the pricing and business models for digital health solutions, initially for four disease areas, including diabetes. With a database comprising 1,137 solutions, the survey continues to welcome participation from global digital health solution providers.

The digital diabetes market is rapidly growing with diverse and innovative service offerings ranging from mobile health apps with features like logbooks, reminders, and educational content to more complex solutions that include connected devices such as CGMs, data-driven predictions, and personalized coaching services. To build a sustainable business in the market segment, robust pricing and revenue models are required for the solution providers.

Research2Guidance (R2G)’s “Global Digital Health Pricing and Business Model Benchmark” project provides early insights into the pricing strategies and business models employed by digital health solution providers across four therapeutic areas, including diabetes. The global survey for this ongoing initiative from R2G is inviting all the digital health solution providers to participate and receive updated results.

The first results shared in the whitepaper highlight key factors influencing pricing strategies, such as service offerings, revenue models, target customer groups, market regions, reimbursement status, and payment durations within the diabetes segment.

Current data indicates that quarterly payments are the preferred cycle for diabetes solution providers, with an average price of approximately $280 per user, ranging between $110 and $540. The prescription digital therapeutics providers like mebix or glucura in the DiGA directory in Germany charge around $500 quarterly per registered user.

Compared to three-month use charged from an average monthly price of $135, the solution providers offer on average 45% discount on the quarterly subscriptions per user.

Most digital diabetes services (92%) focus on mobile health app features, including logbooks, reminders, and educational content. Additionally, 55% of providers offer additional services such as coaching, and 40% integrate connected devices.

Moreover, a significant majority of solution providers (79%) target patients and consumers directly, followed by 66% aiming at insurance companies and 58% at healthcare professionals (HCPs) and facilities.

Revenue models predominantly rely on app usage fees as well, with 45% of providers adopting this approach. Another 21% utilize bundle fees, which include fees for mobile health app and additional services and/or devices, as their main revenue source.

For mobile health app and additional services, the quarterly average price per user is around $185. For example, HabitNu offers diabetes prevention coaching services at approximately $45 per month per user ($140 quarterly).

Providers that combine mobile health apps with connected devices in a bundle have a higher average price of about $490 per user per quarter, referring to an average 164% increase in the quarterly earnings per registered user compared to the app & additional services offerings.

Furthermore, solutions that include app services, connected devices, and HCP access tools command a significantly higher price, averaging $830 per user quarterly, by around 70% more than those offering mobile health apps and connected devices.

For example, Abbott as a leading CGM provider offering LibreView as an HCP access tool mainly derives its revenues from device sales, and its FreeStyle Libre 2 costs roughly $600 quarterly per user (without insurance; prices may change per country).

Regional prices vary slightly among the digital diabetes solution providers. Solutions targeting Germany charge on average $365 per user quarterly, about 7% higher than those focusing on the U.S. market.

Reimbursement is another price driver for digital diabetes solutions. Reimbursed digital diabetes solutions (by statutory and/or selected health plans) charge an average of $460 per user quarterly, while non-reimbursed solutions average just $70 per user quarterly.

R2G’s Global Digital Health Pricing and Business Model Benchmark project is an ongoing initiative, aiming to enhance competitive pricing and business model transparency in the digital health industry. The initiative has already collected responses from over 1,100 solutions globally.

With an aim to expand the database, improve confidence levels, and share insights from more of the therapeutic areas, R2G invites digital health solution providers all around the world to join in this ongoing benchmarking project by participating in the survey. An updated report will be shared with the participants after consolidating their data.

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R2G has been constantly monitoring the global digital health industry since 2010. We provide strategic advice for how to build and grow a successful digital health business within all therapeutic areas, business models, and regions. We are happy to talk and share our experience! For more information reach out to [email protected]