App to help smokers kick the tobacco habit has real potential to reduce medical costs

ATokyo start-up has invented a revolutionary aid to kicking the smoking habit and has attracted investments the company will use for expansion.

CureApp expects its product, an app that works by allowing users to interact on their smartphones or tablets with a virtual nurse who gives suggestions on how to resist tobacco cravings and monitors their progress, to be approved for coverage under Japan’s health insurance programme by 2019. With approval, doctors will be allowed to prescribe the app.

Clinical trials for the app are currently being conducted at a number of universities, including Keio University in Tokyo, says the company founder and chief executive Kohta Satake, a physician specialising in respiratory medicine at the Japanese Red Cross Medical Center, also in Tokyo.

Dr Yumiko Mochizuki, the associate director for the Japan Cancer Society’s Tobacco Free Japan and Business Development, says she strongly recommends smokers with smartphones or tablets use the app to help them quit.

“[The app] will fill a gap, both psychological and medical, during a smoking cessation programme because, usually, smokers who want to quit are left to themselves when they are struggling with withdrawal symptoms and trying to change their habits in order to stay smokefree,” Ms Mochizuki says.

People nowadays are accustomed to using various software applications in their daily lives. “So, it will be much easier to use an application-based cessation programme than using medication,” she says.

The Tokyo-based financial services company SBI Holdings and Keio Innovation Initiative (KII), a partnership between Keio University and the Tokyo-based financial holding company Nomura, invested a total of ¥380 million (Dh12.5m) in CureApp in February.

SBI and KII both refuse to disclose the amount of their respective investments. “We are working on the development of an application that treats diseases, and we believe that the earliest realisation of new medical services will be the basis of our success,” says the KII corporate officer Shuichi Kinoshita, explaining his company’s investment in CureApp.

For its part, SBI made the investment because the app is a service with high growth potential and social significance, says the firm’s investment manager Yusuke Matsumoto. The size of the domestic mobile health care market is projected to have expanded to ¥80 billion last year, Mr Matsumoto says. “It is believed that the medical field in which our company is focused will grow the fastest in the future,” he adds.

Such apps can be expected to have therapeutic effects on diseases that were difficult to treat with existing pharmaceuticals and medical devices, and they may also cut costs related to such medicines.

With CureApp, “there is also the possibility of vertical development to treat diseases other than

nicotine addiction, enabling expansion of the scale of the project,” Mr Matsumoto says.

In addition, he says, it is relatively easy to develop business horizontally by addressing some diseases as well as aiding smoking cessation, so potential for expansion is high. For instance, CureApp has recently developed an app for patients with fatty-liver disease, which is entering clinical tests at The University of Tokyo Hospital’s department of gastroenterology and clinical research. “We would also like to provide solutions [to health problems] such as diabetes and depression,” Mr Satake says. “Risk of competition is also limited,” he adds.

Among expansion plans, the company aims to open a US branch office in California this year. “There are a lot of smokers in the US, and many patients can benefit from medical applications developed under Japan’s excellent medical standards,” Mr Satake says.

“From a market perspective also, this can be quite big,” he says.

And CureApp the firm plans to go public in 2020. “Of course, this will depend on stock market conditions at that time, but that is what we are aiming for,” Mr Satake says.

Japan’s National Health Insurance system does reimburse smoking cessation therapies including nicotine replacement products. “Doctors and patients are likely to welcome any new approach that may help people quit the habit,” says Stephen Barker, an analyst at CLSA Japan, the Tokyo branch of the Hong Kong brokerage.

The out-of-pocket cost to patients for tobacco cessation treatments is ¥13,000 to ¥20,000 per month. An estimated 500,000 patients seek treatment every year in Japan. “It stands to reason that most smartphone users would be offered the app to try,” Mr Barker says.

MHLW’s conventional system for setting prices for novel medical devices takes into account development and manufacturing costs. In the case of CureApp’s app, development costs seem likely to be relatively modest and since manufacturing costs are close to zero, the ministry may offer a reimbursement price that is quite low, Mr Barker says.

“This would be a shame, since this would discourage innovation,” he says.