Mobile health apps are flooding the market at a record rate, becoming increasingly popular with consumers who value the convenience of accessing medical information with the swipe of a finger. But with one quarter of Americans trusting these apps as much as a trained medical professional and making important health decisions based on the information of a 99-cent download, it’s no wonder that the Food and Drug Administration (FDA) is trying to step in to provide regulation for the booming sector.
Testifying before the House Energy and Commerce Committee this week, the FDA was asked how they plan to ensure that mHealth apps are useful, standardized, and accurate, even as the technology expands to physician use and prepares to integrate into electronic health records. After issuing a draft of its guidelines in 2011, the FDA has yet to finalize their rulemaking, including making decisions about the tax status of mobile devices and health apps.
And that was one of the House Committee’s major concerns. Under the Affordable Care Act, regulated medical devices are subject to a 2.3% excise tax. If the FDA determines that mHealth apps, tablets, and smartphones fall under that category, they will be forced to pay the extra amount, which is enough that some industry experts believe it will stifle mHealth innovation and development. “Revenues [from mHealth development] are ploughed back into the company for growth, therefore the 2.3 percent tax on startup companies…increases the amount that must be invested before companies become cash-flow positive,” said Dr. T. Forcht Dagi, partner at HLM Venture Partners.
But Christy Foreman, Director of the Office of Device Evaluation at the FDA, said there was little cause for general alarm. The agency will not label all smartphones or tablets that could possibly run a medical app as medical devices, nor does the FDA have any wish to limit innovation by imposing undue burdens. “FDA believes it is important to adopt a balanced, approach to mobile medical apps that supports continued innovation, assuring appropriate patient protections,” she said.
While calorie counters or fitness trackers pose little threat to patients, apps that carry the same risk as hospital-grade medical devices, such as those used to operate CT scanners from an iPad or program infusion pumps, should be regulated just as much as the equipment they link to. “[The FDA has been] regulating medical device software for decades and medical device software on mobile platforms for more than ten years,” Foreman told the committee. Adding certain mHealth apps to that catalogue of responsibilities would bring little detrimental change to the industry.
It’s the two-year delay in rulemaking that’s causing problems, argue many developers who have been waiting since July 21, 2011 to hear the fate of their business. Ben Chodor, CEO of Happtique, testified that some developers are stalling on potential products due to the uncertainty surrounding the FDA’s plans. “They’re not going forward because they’re waiting,” he said. Committee members speculated that taxes on medical apps might push programmers away from the next greatest health innovation and towards a more lucrative area, such as smartphone games or office software.
But Foreman assured the committee that final guidance would be issued by the end of fiscal year 2013, bringing an end to the long wait, if not total satisfaction to those frustrated by government involvement in the first place. “We believe that focusing oversight on a narrow subset of mobile apps will encourage the development of new products while providing appropriate patient protections,” she concluded.