The benefits of regulation. Retail exemptions. Does a chip in apps for clinical uses impact the classification of that chip in a recreational heath app? Will mobile health app developers follow their medical device colleagues offshore to escape the 2.3 percent tax on medical devices?
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Those were some of the some of the vexing and occasionally lighthearted points made in a House Energy and Commerce Subcommittee hearing on mobile health industry regulation. The Communications and Technology Subcommittee hearing chaired by Oregon Republican Rep. Greg Walden. “Harnessing Wireless Technologies.”
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The benefits of regulation Inevitably, the US Food and Drug Administration was singled out for criticism for appearing to drag its heels on producing clear cut policies that mobile health developers (and their investors) can understand. Bradley Merrill Thompson of the mhealth regulatory Coalition and a member of the law firm Epstein Becker Green tried to underscore a sense of urgency while also acknowledging the complexities of developing rules for a technology subsector that is changing faster than the government can keep up with. He noted that rather than be concerned about getting an all encompassing regulatory framework together, it should just get on with it and make any needed updates later.
“What the FDA needs to do is get a final version out there and update it periodically,” said Thompson. “I think the FDA is struggling with how to get this out and there is an awful lot of business frozen on the sidelines.”
App developers have benefited from going through the regulatory process. Robert Jarrin, a senior with Qualcomm Life, drew attention to mobile health company Vocel, which got 510(k) clearance from the FDA for its medication adherence app, Pillphone. Going through the discipline of proving to the regulator that the app worked helped its credibility. On the other hand he also expressed the hope that the FDA would be consistent in its determination of which apps do and do not qualify as a medical device to avoid needlessly putting developers through a regulatory process that can cost hundreds of thousands of dollars.
Benefits of regulation part 2: spotting the phonies Thompson highlighted a couple of examples showing that regulating mobile health apps could help identify potentially fraudulent products. he pointed out that consumers shouldn’t have to make decisions about whether an app was safe to use when their health is at stake. An iPhone app that does a urinalysis claims it is not a medical device, but because consumers would probably make decisions about their health based on that app’s findings and since the FDA regulates urinalysis, it would need to classify that app as a medical device, whether the developers like it or not. He also cited an example of an app that would claim to detect melanoma as a prime case for an app that would need to be vetted for FDA approval.
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The downside of regulation: the ACA giveth and the ACA taketh away Although none of the witnesses seemed to believe that the FDA should avoid regulating mobile health apps for clinical use, there seemed to be a certain amount of skepticism about whether the regulator could be trusted to recognize the difference. Increased regulation including concern over being included in the controversial medical device tax,
Although some witnesses observed that the Affordable Care Act has helped stimulate the health IT market including mobile health, creating growth the trajectory of a hockey stick of growth. there was a lot of concern about the effect of the 2.3 percent medical device tax on that innovation. In response to a question from Rep. Marsha Blackburn (R-NC) venture capitalist Dr. T. Forcht Dagi, a partner with HLM Venture Partners, pointed out that a worst case scenario for the medical device tax, particularly if it is applied to mobile health apps, will be that investors will find an easier path and companies will move offshore, as will the jobs created by those companies.
Retail exemption One point of concern raised by a couple members of the subcommittee was the subject of how the Affordable Care Act’s provision for the medical device tax could end up being imposed upon tablet manufacturers. Why? Because, as the Hill notes in a recent article the wording of the provision says that if a device is not listed as a device with the FDA, the regulator has the flexibility to change its mind. The retail exemption refers to “medical devices” that are for personal use like eyeglasses, contact lenses, and hearing aids, or the sale of devices generally purchased by consumers for personal use. For his part, Rep Henry Waxman tried to put his colleagues on the committee at ease pointing out that claims that the FDA would regulate smartphones and tablets “are a complete myth.” He added that most medical apps would be exempt from the medical device tax because of the retail exemption because they are sold through retail channels.
Weight scales debate One of the more amusing exchanges underscoring confusion over how the FDA defines medical devices focused on weight scales with bluetooth. Rep. Cory Gardner (R-CO) tried to determine where the definition of a weight scale as medical device in need of regulatory approval ends and one for recreational health and wellness begins. One thing the FDA could do to eliminate some of this Abbott and Costello-esque “Whose on First” confusion was highlighted by Jarrin, in his prepared remarks. He called for the Agency to consider how it will assess apps that warrant listing as low-risk Class I devices, how it will assess exemption from Good Manufacturing Practices. He also recommended that accessories should be classified according to their individual level of risk and not according to the device with the highest classification level.