US Digital Therapeutics Market Projected to Reach $5.08 Billion by 2027

The U.S. digital therapeutics market is projected to grow significantly, reaching an estimated $5.08 billion by 2027, up from $1.16 billion in 2019. Allied Market Research reports a compound annual growth rate (CAGR) of 19.2% for the period between 2020 and 2027.

Digital therapeutics, a segment of digital health, deliver evidence-based therapeutic interventions to patients via software programs and devices for managing, preventing, and treating medical disorders. Market growth is attributed to the increasing penetration of smartphones and mobile devices, the need to control healthcare costs, and the rising prevalence of chronic diseases.

The COVID-19 pandemic spurred the distribution of digital therapeutics for mental health applications, further boosting market growth. The acknowledgment of digital therapeutics' importance by the U.S. Food and Drug Administration (FDA) and substantial venture capital funding in the sector also signal strong market potential.

In 2019, diabetes represented the largest application segment, accounting for over one-fifth of the market share. During the forecast period, the obesity segment is expected to exhibit the fastest growth with a CAGR of 22.1%, driven by rising obesity rates in the U.S. Software constituted the dominant product category, and among sales channels, the business-to-business (B2B) segment held the largest share in 2019.