Last week Scott Gottlieb, head of the Food and Drug Administration, wrote about the agency’s broad initiative to foster innovation. More specifically, he focused on the Digital Health Innovation Plan focused on the burgeoning digital medical devices sphere. Last year alone there were more than 200 million health and fitness app downloads last year. The use of health apps and wearables both more than doubled from 2014 to 2016, and almost half of young adults use a health app.
Source: Accenture Consulting, “Patients Want a Heavy Dose of Digital,” 2016.
The proliferation of these new innovations could substantially increase the amount of health information available, currently growing at 48 percent each year. The insights that these data provide could enable further health care breakthroughs, or empower physicians and patients to optimize their decision-making.
As robust as the recent growth has been, Commissioner Gottlieb emphasized the need for a regulatory framework that allows these digital technologies to “reach their fullest potential,” and not be deterred by regulatory burdens. He stressed the importance for clear policies that do not require developers to seek approval from the FDA on a case-by-case basis.
For some devices or apps, multiple agencies have the authority to become involved. The regulatory overlap adds a degree of uncertainty for developers as to what provisions they have to comply with and which agencies are relevant. To address some of this uncertainty, the FDA will publish guidance to make it clearer to developers what devices and tasks fall under the agency’s purview.
The agency will also be rolling out a pilot program that could have a larger effect on the role digital devices and apps could eventually play in health care. The details of the proposed pilot are still a work in progress, but the program would entail the creation of a third party certification program which would allow the agency to be more discerning in determining which types of products have to go through premarket review, the most stringent level. In the new framework, lower risk digital health products would be able to bypass the premarket review, and higher risk products would go through a streamlined process, allowing companies to get their developments to market more quickly.
A simpler regulatory framework would make it more likely that some of the major innovative companies will get more involved in digital health products. Apple CEO Tim Cook decided against having the Apple Watch go through the FDA regulatory process, and reduced the scope of health related functions the watch could perform, because of the length of the process.
Since then, companies have been making forays into growing digital health care sector, although regulatory burdens have limited their willingness to get involved. Apple has built the resources it needs to market more health care products through its acquisition of a personal health record company and the development of partnerships with hospitals and research institutions. It has also submitted a patent application for a wearable device that could measure and transmit electrocardiographic information to doctors.
A transparent, easy to navigate framework could entice these companies to invest substantial amounts into developing new innovative products and applications in health care.
Gottlieb outlines his hope that this firm-based approach would enable law-abiding companies to bring their products to customers more rapidly, saving lives and reducing barriers to investment. The new framework would be particularly useful for products such as health care apps that are frequently updated because the operating companies would not have to navigate the full review process for each iteration.
The new pilot program will attempt to place new startups and smaller companies on the same playing field as incumbent firms. In this way market share will not be concentrated in a few major players. Ideally, competition and new innovative products will bring costs down and improve health care.
Giving potential developers more regulatory clarity would increase investment and the number of new products. With its Digital Health Innovation Plan, the FDA is signaling a willingness to encourage new technology and innovation that will deliver substantial benefits to physicians and patients alike.
Charles Hughes is a policy analyst at the Manhattan Institute. Follow him on twitter @CharlesHHughes.
Interested in real economic insights? Want to stay ahead of the competition? Each weekday morning, E21 delivers a short email that includes E21 exclusive commentaries and the latest market news and updates from Washington. Sign up for the E21 Morning Ebrief.