Proteus Digital Health, a startup that develops ingestible sensors that communicate when medicines are taken, on June 16 filed for Chapter 11 bankruptcy protection. The move, which company executives said will pave the way for a sale, comes as smart pills struggle to get reimbursed amid financing policies that have hindered widespread uptake, despite the technology’s potential to improve adherence and overall health outcomes.
While the COVID-19 pandemic pushed payers like Medicare to reimburse for telemedicine and remote monitoring, the digestible sensor industry hasn’t reaped the benefits of that expansion. Moreover, the digital pill isn’t a traditional drug or durable medical equipment that falls neatly into Part D. It doesn’t have a CPT code and doesn’t fall under CMS’s remote patient monitoring, data collection or analysis payments. In the end, Proteus’ mostly value-based arrangements didn’t provide the capital to pay investors back.