In September 2017, the US Food and Drug Administration granted De Novo authorization to reSET, Pear Therapeutics’ software-based treatment for substance use disorder. It was a category-defining achievement: software had been reviewed as a medical treatment, not simply offered as a wellness application.
The company’s conviction was ambitious and coherent. Some forms of behavioral treatment could be delivered through software, evaluated in clinical studies, prescribed under clinician supervision, and measured in use. Pear went on to build a portfolio of prescription digital therapeutics and to pursue the standards of medicine rather than the looser expectations of consumer software.
Regulatory authorization answered an important question: could the product legally be marketed for a defined medical use? It did not answer several others. Who would pay? Through which benefit? At what price? What evidence would each insurer require? How would clinicians prescribe it, patients receive it, and claims be processed through systems built for other categories?
The missing pathway
Pear disclosed the problem clearly in its public filings. Coverage and reimbursement for prescription digital therapeutics remained uncertain, and only a limited number of insurers had agreed to reimburse its products. The company also noted that there was no Medicare benefit category for prescription digital therapeutics. FDA authorization, it warned, provided no assurance that any payer would cover or reimburse the treatment.
The company tried multiple routes, including agreements with health systems, employers, pharmacy benefit managers, commercial insurers, and government payers. But these access agreements could involve long sales and contracting cycles, and individual agreements could represent a large share of revenue. Meanwhile, Pear had the expense structure of a company developing, supporting, and commercializing regulated medical products.
By the end of 2022, Pear reported $48.3 million in cash, an accumulated deficit of $323.5 million, and substantial doubt about its ability to continue as a going concern. It had already narrowed its focus and reduced its workforce. In April 2023, Pear and its subsidiary entered Chapter 11 proceedings and moved to sell their assets.
It is tempting to compress the story into one verdict: reimbursement killed the company. That is too neat. Capital markets changed. Commercial execution, pricing, evidence, adoption, organizational cost, and financing choices all mattered. A public filing lists risks; it does not isolate a single cause.
Still, the central systems lesson is difficult to avoid. Clinical value, regulatory authorization, prescribing behavior, patient engagement, coverage, payment operations, and sustainable company economics are different layers. Progress in one layer does not automatically pull the others forward.
Pear’s achievement was real, and so was its failure to build a durable business. Holding both facts at once is more useful than treating the company as either a visionary victim or a cautionary punchline. In healthcare, innovation must travel through an interconnected system. A product can be good, approved, and needed while the path around it remains incomplete.
Sources and further reading
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