The Pear Paradox: How Clinical Success Despite Commercial Failure De-Risks Future Digital Health Reimbursement

Decoupling Clinical Success from Commercial Failure

What Actually Failed at Pear

When Pear CEO Corey McCann announced the bankruptcy, his statement cut to the heart of the issue: "We've shown that our products can improve clinical outcomes. We've shown that our products can save payers money. Most importantly, we've shown that our products can truly help patients and their clinicians. But that isn't enough. Payers have the ability to deny payment for therapies that are clinically necessary, effective and cost saving."¹

The numbers tell the story of a payment system failure, not a clinical failure. Only half of Pear's prescription digital therapeutic prescriptions were covered by insurance, preventing the company from meeting revenue targets despite compelling clinical evidence.² In the first nine months of 2022, 31,000 prescriptions were written for Pear's products, but only 58% were filled—primarily because the products cost an average of $1,300 for three months and patients without payer coverage couldn't afford them.³

Meanwhile, Pear's clinical evidence base stood among the most robust in the prescription digital therapeutics domain, with over 40 published studies including several large randomized controlled trials in high-quality journals.² The company had demonstrated clinical efficacy, real-world effectiveness, patient engagement, provider willingness to prescribe, and documented cost savings. Every component needed for successful therapeutic adoption existed—except sustainable reimbursement.

The Payment Infrastructure Gap

Pear operated in a payment environment characterized by limited CMS guidance and ambiguous reimbursement rates that led to individual adjudication of claims by Medicare and commercial insurers.² Almost half of Pear's revenue came from just three payers with very different contract structures, creating unsustainable complexity and fragility.⁴ This fragmentation meant that despite FDA clearance for their substance use disorder and insomnia digital therapeutics, market acceptance among payers and providers remained low.³

Traditional fee-for-service payment methodologies simply don't align with how technology-supported care is delivered. Prescription digital therapeutics don't fit neatly into existing billing codes designed for in-person encounters, discrete procedures, and tangible medical devices. The result was a reimbursement minefield that even a well-funded, pioneering company with exceptional clinical evidence couldn't successfully navigate at scale.

The Pre-Validation Thesis: Evidence Persists Beyond Business Models

Why Pear's Bankruptcy Doesn't Invalidate Their Science

Here's the critical insight that pharmaceutical strategists must understand: Pear's clinical evidence didn't evaporate when the company filed for bankruptcy. The randomized controlled trials remain published. The real-world effectiveness data still demonstrates improved outcomes. The health economic analyses showing cost savings remain valid. The FDA authorizations proved that digital therapeutics can meet regulatory standards for safety and effectiveness.

What failed was the commercial infrastructure for converting clinical value into financial sustainability, not the ability to create clinical value itself. This distinction matters enormously for future digital health initiatives, particularly as CMS rolls out the ACCESS Model with its outcome-aligned payment framework.

What Pre-Validation Actually Means

In pharmaceutical development, de-risking is everything. Companies invest billions in clinical trials to generate evidence that a therapy works before scaling commercial operations. The typical path is: early research → proof of concept → Phase I/II/III trials → FDA approval → commercialization. Each stage reduces uncertainty about whether the intervention achieves the desired biological effect.

Pear completed this entire journey for prescription digital therapeutics in substance use disorder and insomnia. They demonstrated that:

Cognitive behavioral therapy can be delivered effectively via smartphone. The concern that patients wouldn't engage with app-based interventions or that digital delivery would dilute therapeutic effectiveness has been empirically disproven. Pear's engagement data and outcomes demonstrate that the modality works.

Clinicians will prescribe digital therapeutics when appropriate payment exists. Provider skepticism about "prescribing an app" was overcome in programs where reimbursement was clear. The barrier wasn't clinical acceptance—it was payment uncertainty.

Patient outcomes improve with digital therapeutic intervention. Across multiple studies and real-world implementations, Pear demonstrated measurable improvements in abstinence rates, treatment retention, and functional outcomes for substance use disorder patients.

Cost savings are achievable and quantifiable. Real-world evidence showed $2,150 per patient spending reduction, primarily through reduced emergency department utilization and hospital admissions—exactly the outcomes that value-based payment models like ACCESS aim to reward.⁵

The technology is operationally feasible. Digital therapeutics can be deployed at scale, integrated with electronic health records, tracked for compliance, and administered across diverse patient populations and care settings.

The De-Risking Value Proposition

For organizations considering digital therapeutic development or deployment, Pear's evidence answers many of the highest-risk questions before you invest a dollar. You don't need to wonder whether cognitive behavioral therapy via mobile app can work for substance use disorders—Pear proved it does. You don't need to guess whether patients will engage—engagement data exists. You don't need to speculate about cost impact—real-world evidence is published.

What you do need is the right payment infrastructure. And that's precisely what ACCESS provides.

How Pre-Validation De-Risks ACCESS Model Expansion

The ACCESS Framework Is Condition-Agnostic

The ACCESS Model currently focuses on four clinical tracks: early cardio-kidney-metabolic conditions, established cardio-kidney-metabolic conditions, musculoskeletal pain, and behavioral health (depression/anxiety). Substance use disorder isn't included in the initial scope. However, CMS explicitly states that it "may consider additional tracks and conditions in the future."⁶

This language is deliberate. ACCESS was designed as an expandable platform, not a fixed program. The outcome-aligned payment mechanism, technology-enabled care delivery model, and performance measurement infrastructure work for any chronic condition with clear outcome measures and amenability to continuous patient engagement.

From CMS's perspective, expanding ACCESS to new conditions involves risk. Will digital therapeutics actually improve outcomes for the new condition? Will organizations achieve the performance thresholds needed to justify outcome-aligned payments? Will the model reduce total Medicare spending or just shift costs? Can outcomes be measured reliably at scale?

Pear's evidence base directly addresses these concerns for substance use disorders.

Why SUD Is an Ideal ACCESS Candidate

Substance use disorder possesses several characteristics that make it exceptionally well-suited for ACCESS's outcome-aligned payment framework:

Medicare already covers SUD treatment—but through fragmented pathways. Medicare Part B covers medications (methadone, buprenorphine, naltrexone) through Opioid Treatment Programs with bundled weekly payments, while office-based treatment uses separate E/M codes, and Part D covers some medications.⁷ This complexity is exactly what ACCESS was designed to resolve by creating unified outcome-based payments.

An estimated 1.7 million Medicare beneficiaries are living with diagnosed substance use disorder,⁸ representing a substantial population that would benefit from improved care coordination and technology-enabled support.

Outcome measures are well-established and validated. Days of abstinence, treatment retention, negative urine drug screens, reduction in emergency department visits, and return to functional activities provide clear, quantifiable outcomes that fit naturally into ACCESS's performance measurement framework.

SUD drives high Medicare costs through downstream complications—overdoses, infections, mental health crises, early mortality—making it an ideal target for value-based payment where improved outcomes generate substantial cost savings.

Technology-enabled care addresses unique SUD challenges. Stigma barriers that prevent patients from seeking in-person treatment, geographic access issues in rural areas lacking addiction specialists, and the need for continuous support between clinical visits all make digital therapeutics particularly valuable for SUD management.

The De-Risking Mechanism for CMS

When CMS considers whether to expand a payment model to new conditions, the agency evaluates several risk factors:

Clinical Risk: Will the intervention work? Pear's RCT evidence and real-world data demonstrate that prescription digital therapeutics improve SUD outcomes. This clinical risk is largely eliminated.

Operational Risk: Can it be implemented at scale? Pear demonstrated operational feasibility across diverse care settings and patient populations. The technology infrastructure, provider training requirements, and patient engagement mechanisms are known quantities.

Measurement Risk: Can outcomes be tracked reliably? SUD outcome measures (abstinence, retention, function) are well-validated and used in existing quality reporting programs. Measurement infrastructure exists.

Economic Risk: Will it reduce total costs? Published health economic data showing $2,150 per patient savings provides evidence that improved SUD outcomes translate into reduced Medicare spending through fewer emergency visits and complications.

Adoption Risk: Will providers and patients participate? Pear's experience demonstrates that when payment barriers are removed, providers prescribe digital therapeutics and patients engage with them. The "if you build it, will they come" question has been answered affirmatively.

Pear's evidence addresses each of these risk factors. CMS can expand ACCESS to SUD with substantially more confidence than if they were venturing into completely uncharted territory.

Strategic Implications for Pharmaceutical Digital Health Portfolios

The Evidence-First Approach to ACCESS Positioning

Pear's trajectory suggests a clear strategic principle: clinical evidence generation should precede—and be independent of—specific payment model timing. Companies that build robust evidence for digital health interventions position themselves to capitalize when favorable payment frameworks emerge, even if the timing is uncertain.

For pharmaceutical companies developing digital therapeutics or companion digital tools, this means:

1. Invest in Clinical Validation Regardless of Current Reimbursement

Don't wait for payment certainty before generating evidence. The evidence itself has value—it de-risks future commercialization, supports regulatory submissions, demonstrates commitment to value-based care, and positions you as a thought leader when payment policy evolves. Pear's evidence is now being leveraged by the companies that acquired their assets, even though Pear itself didn't survive to benefit from ACCESS.

2. Design Studies with ACCESS-Compatible Outcomes

If you're conducting digital health research, structure studies around outcomes that align with ACCESS's framework: guideline-informed biomarkers (blood pressure, HbA1c, lipids, weight), patient-reported outcome measures for pain and function, and total cost of care impact. This ensures your evidence will be directly applicable when ACCESS expands or when other payers adopt similar models.

3. Think Beyond Current ACCESS Conditions

ACCESS currently covers four clinical tracks, but expansion is explicitly anticipated. If your digital health assets address conditions not yet included—substance use disorders, COPD, heart failure, cancer survivorship, neurological conditions—continue building evidence. The mechanism is proven; condition coverage is just a matter of policy timing.

4. Monitor Policy Signals for Expansion Timing

CMS will evaluate ACCESS's initial performance before expanding to new conditions. Track model performance data, stakeholder feedback, and policy commentary that suggests which conditions might be added next. Position your organization to be ready when expansion opportunities emerge.

The Acquisition and Partnership Opportunity

Pear's bankruptcy created opportunities for strategic acquirers who recognized the value of pre-validated evidence. The assets were split among multiple buyers: Nox Health acquired Somryst (insomnia) for $3.9 million; Click Therapeutics, Harvest BIO, and Welt acquired other components.⁹ These acquirers obtained FDA-authorized digital therapeutics with robust clinical evidence at a fraction of development cost.

Similarly, partnerships with digital therapeutic companies that have evidence but need commercialization support could be structured to share upside when payment models evolve. The pharmaceutical company provides market access, payer relationships, and capital; the digital health company provides validated technology and clinical evidence.

Building for the Post-ACCESS Landscape

ACCESS represents CMS's vision for how technology-enabled chronic care should be paid for in Medicare. If the model succeeds—improving outcomes without increasing costs or reducing costs without harming quality—CMS has authority to expand or make it permanent through rulemaking.⁶ Moreover, Medicare Advantage plans can adopt similar outcome-aligned payment arrangements without needing waivers, and commercial payers are likely to follow Medicare's lead.¹⁰

This means that the ACCESS payment framework could become the dominant model for chronic disease management across all payers within 5-10 years. Organizations that position themselves for success in this environment will need:

Robust outcome measurement and reporting capabilities. ACCESS requires standardized tracking of condition-specific measures, patient engagement metrics, and total cost impact. Invest in data infrastructure now.

Technology platforms that enable continuous patient engagement. Episodic care doesn't generate the outcomes ACCESS rewards. Digital tools that support daily patient engagement, remote monitoring, and proactive intervention will be essential.

Evidence of real-world effectiveness at scale. Academic RCTs are necessary but not sufficient. Demonstrate that your interventions work in diverse populations, across different care settings, with typical (not ideal) patient adherence.

Integration capabilities with existing care teams. ACCESS emphasizes care coordination, with co-management payments for referring providers. Digital therapeutics that operate in isolation won't succeed; those that enhance and extend the primary care relationship will thrive.

Conclusion: Learning from Pear's Evidence, Not Just Their Failure

The conventional narrative frames Pear Therapeutics as a cautionary tale—a high-profile failure that demonstrates the challenges facing digital therapeutics. That narrative misses the strategic insight: Pear succeeded at the hardest part (proving clinical effectiveness) and failed at what should have been the easier part (getting paid for value delivered). The failure wasn't scientific; it was structural.

CMS's ACCESS Model fixes the structural problem. It creates outcome-aligned payments that reward measurable health improvements, removes patient cost barriers, provides unified reimbursement instead of fragmented negotiations, and incentivizes provider adoption through co-management payments. This is precisely the payment infrastructure Pear needed but operated without.

For pharmaceutical companies developing digital health solutions, Pear's evidence represents valuable de-risking. You don't need to wonder whether digital therapeutics can work for chronic conditions—clinical proof exists. You don't need to guess whether patients will engage—behavioral evidence is available. You don't need to speculate about cost impact—health economic data is published. What you need is alignment with conditions that ACCESS covers or will cover in the future.

As CMS evaluates which conditions to add to ACCESS, evidence from companies like Pear provides the validation needed to expand confidently. The clinical risk has been retired. The operational feasibility is proven. The outcome measures are established. The cost-effectiveness is documented.

The question isn't whether digital therapeutics can deliver value in chronic disease management. Pear answered that affirmatively, even as their business model collapsed under payment system inadequacy. The question is whether pharmaceutical companies will recognize the pre-validation opportunity, build evidence for their target conditions, and position themselves for success when ACCESS expands to create sustainable reimbursement for digital health innovation.

Pear Therapeutics paid the trailblazer tax. Don't let that investment be wasted. Learn from their evidence, apply their insights, and build for the payment infrastructure that finally aligns clinical value with commercial sustainability.