More startups are seeking Food and Drug Administration (FDA) clearance for autism spectrum disorders interventions beyond behavior therapies.

While widely varied in type and approach, these companies seek to bring the scientific rigor and scrutiny that is more of a type with medical devices. The FDA clearance process provides something tantamount to a permission slip to bring new services to bear on health conditions. In so doing, these device companies seek to help address some of the most difficult issues facing the industry, namely the subjectivity of autism diagnosis and treatment, the time it takes to conduct diagnoses and even treat some symptoms of autism.

Companies that go this route have a tough road to walk. A survey of device companies shows it takes millions of dollars, a median cost of $6.1 million, to get through the FDA clearance process for devices. In one case, a company spent $41 million in the process. 

“We wanted to go through FDA clearance, even though it’s a very long and extremely expensive process, for several reasons,” Katya Sverdlov, co-founder and CEO of New York City-based JelikaLite Corp., told Autism Business News. “One, is for ourselves. We don’t want to give people cockamamie treatments that give people yet another false hope for something that doesn’t work. There are many ways to make money. This is not the way that we would want to do it.”

JelikaLite’s Cognilum platform uses transcranial photobiomodulation, pulsed infrared light shined on the skull, to stimulate brain cell mitochondria. The company targets the cerebellum. Mitochondrial dysfunction could potentially play a role in autism. 

In addition to ethical considerations, the FDA may be the only way to do it strategically and legally speaking. Companies cannot market a device as being able to treat a condition without securing clearance from the FDA. Further, most payers won’t consider devices in their formularies without it.

Informally, many clinicians, who often introduce these devices in care, won’t take a device seriously unless it has FDA clearance or is at least in the process, experts tell ABN.

“FDA clearance not only ensures regulatory compliance but also boosts confidence among stakeholders, leading to greater adoption and trust in the device,” Michael Fox, vice president of marketing for EarliTec Diagnostics Inc., told BHB in an email. “Moreover, it opens doors to broader market opportunities, including reimbursement and potential partnerships.”

Decatur, Georgia-based EarliTec Diagnostics, founded in 2019, has obtained two clearances from the FDA for its eye-tracking focused diagnostic technology. The first generation of EarliTec’s device landed clearance in 2022. Its second-generation tech transitions the platform to a tablet device. The FDA granted clearance for it in June 2023. 

“Our goal is to establish a new standard for autism diagnosis and assessment with an objective and efficient test, making FDA clearance pivotal in achieving this,” Fox said.

Business considerations

Companies that seek to bring devices to market or are otherwise subject to FDA scrutiny don’t get direct access to patients. Clinicians moderate that access. This fundamental paradigm establishes a wall between potential customers or makes clinicians themselves sales targets.

Either way, clinicians need compelling motivation to bring potentially unfamiliar science into their practice.

“The rigor of the work that we have to do and the scientific hurdle, I think, also is a validation by having FDA authorization,” Sharief Taraman, CEO of Cognoa, told BHB. “It helps a clinician know this was scientifically validated. … With the FDA bar, you have to really prove that the thing works and that it’s safe and effective.”

Without FDA clearance, this might mean skipping payer reimbursement, putting the burden of costs on families or providers.

In January, Cognoa, which offers a digital platform to help providers more accurately diagnose autism, announced that its tool could be reimbursed without prior authorization by Highmark’s health plans. Cognoa’s platform is called ​​Canvas Dx. Taraman said talks are ongoing with Medicaid plans and other plans to do something similar. 

Taraman was named CEO at the end of 2022. In 2021, it got clearance from the FDA.

“The reality is that patients need this,” Taraman said. “And the reality is the health economics work. If we can help identify these kids early, they actually need less treatment overall for a shorter period of time.”

Autism is considered one of the fastest-growing developmental disorders in the U.S. As a result, the autism therapy industry struggles to provide timely access to diagnosis and care in many regions of the U.S. 

Taraman estimated that an earlier diagnosis of autism could lead to $2.5 million of lifetime savings and could reduce costs by $2,500 compared to the wait times for a traditional diagnosis. 

The cherry-on-top of new technology for the autism therapy industry would be a means of deriving additional revenue. On top of the benefit to patients or the collective system, the absence of payment for using new technology disincentivizes providers from dedicating the capital and staff costs to implement them. There, the FDA plays a pivotal role.

“We believe that for Floreo to scale to its full potential and reach the million plus kids that could benefit from Floreo today, there needs to be a scalable reimbursement pathway for providers,” Vijay Ravindran, CEO of virtual reality digital therapeutic maker Floreo Inc., told BHB. “FDA approval is a key ingredient in obtaining that.”

About a year ago, Floreo’s push to have virtual reality recognized in the Current Procedural Terminology Code (CPT), the American Medical Association’s (AMA) medical coding language, came to fruition. In January 2023, the AMA announced category III add-on codes to help track the use of VR and AI in health care. 

CPT codes don’t, on their own, carry reimbursement. Often, medical coding looks to the federal government’s Center for Medicare & Medicaid Services (CMS) to validate and value certain codes by assigning a reimbursement amount. Payers do have the discretion to pay for the use of VR and AI, Ravindran said. 

Floreo’s VR platform is meant to create easily replicable skill-building experiences in safe and controlled environments. Used in autism therapy clinics, Floreo markets partnerships with the providers Cortica and Trumpet Behavioral Health, two large autism therapy providers in the U.S. 

The “north star” for Floreo, Ravindran said, is to obtain a CPT I code for these types of services.

“That then creates a CMS-recommended rate. It creates a much more straightforward pathway for providers to get reimbursed from payers for adding VR to treatment,” Ravindran said. “FDA approval for full market authorization is considered a requirement for a CPT I code.”

Floreo announced at the end of the year that it received breakthrough designation and acceptance into the ​​Total Product Life Cycle Advisory Program by the FDA. Both programs are meant to accelerate the clearance process for promising products that are early in the clearance process.