FDA Removes Roadblocks To Medical App Innovation

Posted: 9/24/2013

As seen on VentureBeat.com

By: Christina Farr

The United States Food and Drug  Administration has finally released guidelines on how it plans to regulate  thousands of new health-related smartphone applications.

After months of delaying its decision, the agency has determined that the  vast majority of these health-related apps pose a negligible threat to  consumers. Most of these "mobile medical" apps do not need federal regulation,  the FDA found, so developers and investors can breathe a bit easier.

FDA officials released a statement this morning that it has already approved  75 mobile medical applications, including 25 in the last year. Agency officials  estimate that 500 million smartphone users worldwide will use some type of  health app by 2015.

The FDA will focus its attention on the apps that turn your mobile phone into  a medical device, like a medical attachment that plugs into an iPhone, not all  of the 17,000-plus mobile health apps that are currently on the market (like  urine analysis applications or calorie counters). These applications are a small  minority, but they have been deemed by the agency as the most likely to put  patient safety at risk. Some nondevice apps will require approval as well.  In addition, "mobile app distributors" like the Apple  App  Store or Google Play, will not come under the FDA's jurisdiction.

"The guidance provides clarity about what will and will not be the focus of  FDA's regulatory oversight," said Corey Ackerman, president of health app  marketplace Happtique, on  hearing the news.  "It should allow developers and other stakeholders to  have more regulatory certainty with respect to mobile app innovation in the  health and medical industry."

Regulators will keep a particularly close eye on the applications that seek  to replace a doctor's visit or perform clinical tests. For instance,  several new mobile medical devices are currently under development for asthmatic  patients - the technology enables them to measure lung function by blowing  on an iPhone. This device poses an alternative to machines in a hospital or  doctor's office and would therefore require regulation.

Will the final guidance inspire med-tech investment?

The explosion of applications to track and monitor your health - even  diagnose diseases - has been a thorn in the side of the FDA for some time.

The agency released a draft guidance on mobile medical apps in June 2011, but  it delayed its final guidance on several occasions.

For over a year, the agency has threatened to regulate new applications, even  targeting a few. These actions have provoked waves of confusion and concern for  health-focused investors and entrepreneurs, who fear the specter of  overregulation from Washington, D.C.

As we reported in April, medical entrepreneurs  said that potential investors were "scared off" by the lack of clear  guidelines. The FDA responded to my request for comment by stressing that agency  representatives were "aware" of the concerns and would work closely with  entrepreneurs to balance "patient safety and innovation."

Meanwhile, many angel investors and venture capitalists have demurred on a  decision to invest in a mobile medical app until the FDA releases its final set  of guidelines.

Medical device investor Michael Carusi has repeatedly spoken out in the  press, urging the FDA to take action. "We have been pushing the FDA on how  difficult it is to get products approved," said the general partner at ATV Capital.

For the digital health ecosystem, Monday's final guidance will provide some  clarity. It could even inspire a wave of digital health investment, which  is in  line with the mHealth Regulatory Coalition's (MRC) prediction this June. A  spokesperson from the MRC fired off a letter to Health and Human Services  Secretary Kathleen Sebelius, calling for a final guidance to "unlock needed  investment."

Ackerman agrees that the final guidance will prompt investors top open their  check books. "Investors crave a level of certainty when it comes to regulations,  and this guidance should give them comfort," he said.

Health entrepreneurs: A collective force for action

Health entrepreneurs have repeatedly been called in to testify in congress.  Ben Chodor, Happtique's then CEO, called me after a visit to Capitol Hill  earlier in the summer.

Chodor said he informed the FDA about the pressing need for a final guidance.  "Developers are mystified by the rules in this highly regulated industry," he  said.

In addition, entrepreneurs and policy experts, including Practice Fusion‘s Lauren Fifield and noted investor Esther  Dyson, recently formed a health IT  "workgroup." Representatives from the digital health sector in hubs  like Silicon Valley and New York have been asked to dial in to a weekly  conference call with spokespeople from various health-agency bodies in D.C.

The goal, as always, is to inspire the formation of new technologies  (especially those that focus on reducing health care costs) and enforce the  requisite consumer protections.

This is just one of the recent efforts to strike an active dialogue between  entrepreneurs, investors, and various regulatory agencies.

The missing piece? Specific use-cases

Going forward, the FDA will need to provide more examples of how it intends  to regulate mobile medical apps. Entrepreneurs are still in the dark about how  long the process will take, and how much it will cost.

In May, the agency launched its first official investigation into a urine  analysis app called UChek. The app claims to offer a "medical lab in your iPhone," which is the type of  messaging that would trigger a response from the FDA.

The discussions around uChek provided a window of understanding into the  FDA's thinking. It became evident that the agency does not intend to expand its  jurisdiction and regulate more (it's unlikely that a government agency has the  funds to do so), but is primarily concerned with a subset of mobile medical  apps/ devices.

"Some mobile apps carry minimal risks to consumer or patients, but others can  carry significant risks if they do not operate correctly. The FDA's tailored  policy protects patients while encouraging innovation," said Jeffrey Shuren,  M.D., director of the FDA's Center for Devices and Radiological Health, in a  statement today.

In the meantime, we've seen Scanadu, the parent company behind Scout, a  medical tricorder, launch a crowdfunding campaign to raise awareness and cash.  Scanadu intends to sell the device on Indiegogo, while conducing the usability  tests required for regulatory approval.

Startups have been been taking more innovative approaches like these to get  around the FDA. However, with today's final guidance, and more clarity from  regulators in D.C., the FDA may no longer be perceived as the "big bad wolf" in  health care.