Pear Therapeutics’ Failure: Paying the Trailblazer Tax

Pear Therapeutics seemed off to a promising start as a young digital therapeutics (DTx) company, taking a focused approach to demonstrate the efficacy of new software therapies, generate value for prescribers and patients, and secure reimbursement from insurance companies. Investors were also excited about the potential for evidence-based, software-driven therapeutic interventions — instead of going to a pharmacy for a bottle of pills, patients would get a prescription to download a software app designed to help treat their disease. And new DTx companies like Pear Therapeutics saw great promise in packing the power of a pharmaceutical products into a software products.

The case study provides background on the rapid growth and challenges in the new DTx field, and details of Pear’s early successes with digital therapies designed to treat insomnia and substance use disorders. But for Pear, continuing investment in the development of a robust produce portfolio proved difficult, in light of the difficulties navigating the insurance reimbursement minefield, while managing investor expectations. Were Pear’s troubles — and eventual failure — an ominous cloud over the future of the DTx sector?