The resounding message at the first of three scheduled U.S. House of Representatives Energy & Commerce hearings on health IT is that FDA must act soon to finalize a 2011 guidance document on its oversight of mobile medical apps to eliminate the cloud of uncertainty on the matter.
“Their analysis is not a poster child of clarity,” said Rep. Greg Walden (R-Ore.), a sentiment echoed among legislators and speakers at the March 19 Subcommittee on Communications and Technology hearing.
Subcommittee members met with six industry and association experts to discuss the protracted release of a final FDA guidance document and talk of a 2.3 percent excise tax on devices with medical apps that many felt would stifle innovation and repel investment.
“The public needs to know, doctors need to know, patients need to know, and now we are sitting in the middle ground, and that is scary,” said Robert Jarrin, senior director of government affairs at Qualcomm, on the looming regulatory uncertainty.
With 27,000 unique health apps available and 500 more added per day, Jarrin compared the upward movement to “a hockey stick.” He advocated for a risk-based system, in which FDA would not regulate low-risk apps but focus its oversight on those that aid in clinical diagnoses.
“When talking about mobile apps, there is a lot of ambiguity,” said Jarrin, who added that apps related to medical adherence, BMI calculators and drug dosage should not be under FDA’s umbrella. He estimated that about 5 percent of apps warrant oversight due to their uses in diagnosis.
Only 80 device apps have achieved FDA approval through the 510k medical device preapproval process, and given this slow pace, innovation clearly would be hampered if it calls for across-the-board enforcement, he said. The preapproval process can take from 90 days to 18 months for FDA to review.
Jarrin said he knew one company that spent hundreds of thousands of dollars to work with FDA on their mobile app, and a final guidance may show that it wasn’t necessary.
“It’s hard on industry when you don’t know whether or not you are going to be regulated. You have to take that under consideration,” he said.
Bradley Merrill Thompson, general counsel at the mHealth Regulatory Coalition, reiterated the call for FDA to publish its guidance as soon as possible. Even with a rapidly changing industry, he said a baseline document needs to be established, and can be updated periodically to keep pace with technological developments.
Thompson also called for “balanced FDA enforcement,” citing a new urinalysis app from India that marketed itself as “not a medical device.” Enforcement would level the playing field for industry to fairly compete, and also ensure patient safety, he said.
Meanwhile, attendees expressed concern about a possible 2.3 percent excise tax but some witnesses felt that the agency did not indicate its intention to implement such a tax in its guidance. Some expert witnesses and legislators cited a retail exemption, meaning that devices intended for general use would not be subject to the tax.
“We firmly believe the retail exemption applies,” said Ben Chodor, CEO of Happtique, in his testimony, but he added, “imposing a tax undoubtedly stifles innovation.”
T. Forcht Dagi, MD, MPH, DmedSc and partner of HLM Venture Partners, said the 2.3 percent medical device tax would be a “major market inefficiency” if pursued and likewise would discourage venture capitalists from investing. He noted that such a tax would apply to revenues, not profits, thus would hurt smaller businesses seeking outside investment while spurring some companies to launch offshore where regulatory systems are simpler.
“I ask that the goalpost not be moved in bringing devices to market,” he added.
Jonathan Spalter, chairman of Mobile Future, a coalition focused on wireless technology innovation, asked for a clear understanding of where FDA's regulatory oversight begins and ends, timely decisions that support patient safety without inhibiting development of mobile apps and basic fairness on taxes. He also said greater federal spectrum bandwidth is necessary to accommodate the mushrooming use of medical apps.
“Mobile health apps are at a nascent stage--there will be extraordinary levels of adoption. We need to have predictable, reliable access to spectrum to those deploying these innovations for hospitals, patient communities and healthcare providers. The need for secure and reliable bandwidth is profoundly strong,” Spalter elaborated.
Spalter shared his own experience managing a chronic condition with his young daughter diagnosed with type 1 diabetes, and the importance to speed up innovation to help patients like her manage their diseases.
Concerns about overregulation of healthcare apps and its corresponding effect on the job market also were raised. George Ford, PhD, chief economist at the Phoenix Center for Advanced Legal and Economic Public Policy Studies, said that the mobile industry is set to employ 500,000 people and stringent healthcare apps regulation could curtail job growth.
Ford said FDA’s role is important for patient safety, but in mobile med apps the agency should play a limited role.
In speaking to pending FDA guidance, he stressed that “resolving uncertainty is not helpful in itself,” saying that the contents of the guidance truly are the game changers in the industry’s ability to innovate.