The digital therapeutic for insomnia cognitive improvement, "SleepQ," has confirmed it is the first domestic digital therapeutic to be eligible for coverage under actual loss insurance. This will significantly alleviate the burden on both patients and medical professionals.
On the 5th (local time), Kang Sung-ji, CEO of WELT, noted that "patients prescribed SleepQ at hospitals have recently filed claims with insurance companies for actual loss insurance and received reimbursements." Kang attended the biohealth forum hosted by the UK government and King's College London (KCL) as a representative of domestic digital healthcare corporations, where he introduced SleepQ technology.
WELT is a nine-year-old digital healthcare corporation that emerged as an in-house venture of Samsung Electronics in 2016. After graduating from Yonsei University College of Medicine and working as a public health doctor, Kang moved to Samsung Electronics, where he founded the company before it was spun off. SleepQ, developed by WELT as the second domestic digital therapeutic, uses artificial intelligence (AI) software to analyze patients' sleep patterns over 6 to 8 weeks to provide personalized treatment.
The domestic digital therapeutics began with Aimmed's insomnia cognitive improvement treatment, "Somz," in February 2023, followed by WELT's SleepQ, NewKnapp's stroke patient visual impairment improvement treatment "VIVID Brain," Share & Service's respiratory rehabilitation exercise treatment "EasyBreath," and last month, NewLive's tinnitus treatment "SoriCLEAR," totaling five that have received approval from the Ministry of Food and Drug Safety. WELT's SleepQ was authorized in 2023 and prescriptions began at Severance Hospital in June of last year.
Digital therapeutics have been recognized for safety and efficacy for various conditions; however, the health insurance reimbursement system remains ambiguous. The Health Insurance Review and Assessment Service has provisionally listed the health insurance reimbursement costs for Somz and SleepQ, but they were set at just 20,000 won, making it impossible for the companies to generate revenue. Aimmed and WELT opted for non-reimbursement sales, with Somz and SleepQ being prescribed at around 200,000 won depending on the medical institution.
Kang emphasized that even with non-reimbursable prescriptions, eligibility for actual loss insurance has reduced the burden on patients. He stated, "While the self-burden ratio varies depending on the generation of the insurance, all actual loss insurers can apply coverage. We expect that confirming this insurance application will help expand the distribution of digital therapeutics in the future."
WELT is also seeking avenues abroad, choosing Germany, one of the most mature markets for digital therapeutics, as a foothold. In Germany, digital therapeutics are covered 100% by insurance. The approach involves first entering the health insurance market and then formally listing coverage through post-evaluation. Even during provisional listings, health insurance fully covers patients without any burden. WELT established a local corporation in Munich last July.
Kang mentioned, "We have already received European medical device regulation (CE MER) certification for SleepQ and have completed initial development tailored to local patient characteristics," adding that "utilizing AI for rapid updates to enhance patient convenience is our greatest competitive advantage." The German version of SleepQ is expected to undergo clinical trials with a local university in June this year and apply for product approval by the end of next year.
WELT is developing follow-up products after SleepQ. A digital therapeutic for treating eating disorders was submitted for approval to the Ministry of Food and Drug Safety at the end of last year, and the ministry is currently in the process of supplementing the submitted documents.
Last year, WELT acquired the migraine division of Pear Therapeutics for $50,000 (approximately 70 million won). Pear Therapeutics is the first company in the world to receive approval for digital therapeutics from the U.S. Food and Drug Administration (FDA). After launching the drug addiction treatment app "reSET" in 2017 and gaining recognition for a corporate value of 2 trillion won in 2021, it faced bankruptcy due to failing to list on Medicare, a U.S. public insurance system, leading to profitability issues.
Kang stated that through pre-acquisition due diligence, he analyzed the factors leading to Pear Therapeutics' bankruptcy. He said, "While the change in the U.S. administration influenced the situation, the issue was that Pear Therapeutics overlooked competitiveness despite the title of 'the world's first' not holding unique technology. However, securing the patent rights and hospital contracts for the migraine pipeline suggests high potential for future developments in treating migraines, Parkinson's disease, dementia, and other brain disorders."