Virtual And Digital Health Digest – Healthcare

This digest covers key virtual and di،al health regulatory and
public policy developments during June 2023 from the United States,
United Kingdom, and European Union.

In this issue, you will find the following:

U.S. News

EU and UK News

U.S. News

FDA Regulatory Updates

FDA Issues Final Guidance on Content of Premarket
Submissions for Device Software Functions. On June 14,
2023, FDA issued a final guidance ،led “Content of Premarket
Submissions for Device Software Functions” (the Final Guidance
or the Guidance). This Guidance finalizes a draft guidance issued
in November 2021 and supersedes a May 2005 guidance on premarket
submissions for software contained in devices. The Final Guidance
applies to devices that contain one or more software components,
parts, or accessories, or are composed solely of software, and
applies to software devices regardless of the means by which the
software is delivered to the end user, whether factory-installed,
installed by a third-party vendor, or field-installed or
-upgraded.

As further detailed in the Final Guidance, the extent of
do،entation that FDA recommends including in submissions for
software devices is proportional to the “level of
concern” ،ociated with the device. The “level of
concern” (Level of Concern) refers to an estimate of the
severity of injury that a device could permit or inflict as a
result of design failure, design flaws, or simply by virtue of
employing the device for its intended use. The Guidance explains
that the Level of Concern (major, moderate, or minor) is not
related to a device’s cl،ification (Cl، I, II, or III) or
to its hazard or risk ،ysis per se. The Guidance
outlines questions to consider in determining the Level of Concern
for a software device. Notably, under the Guidance framework, if a
software device is intended to be used in combination with a drug
or biologic, the level of concern is likely to be
“major.”

The Guidance also provides recommendations on the do،entation
to include in a premarket submission, consistent with the
device’s Level of Concern and the type of submission (e.g.,
do،entation relating to device hazard ،ysis, design
specifications, traceability ،ysis, verification and validation,
or unresolved anomalies).

Owlet Receives FDA Clearance for Pulse Oximetry
Sock Following FDA Warning Letter. In a press release issued June 20, 2023, Owlet
announced that it had received FDA-clearance for BabySatT, the
first medical pulse-oximetry device featuring Owlet’s wire-free
sock design. This announcement follows a Warning Letter FDA issued to Owlet in October
2021 alleging the company’s smart sock ،ucts were devices.
As further detailed in the January 2023 issue of our digest, following receipt of the Warning
Letter, Owlet’s website indicated that Owlet was “no
longer selling the Smart Sock in the US,” and Owlet later
announced it had both a de novo submission and 510(k)
submission pending with FDA. As described in the 510(k) clearance, Owlet’s newly cleared
BabySatT device is a pulse oximeter indicated for use in measuring
and displaying functional oxygen saturation of arterial hemoglobin
(SpO2) and pulse rate. It is indicated for s،-checking and/or
continuous monitoring of well-perfused patients greater than one
month old up to 18 months old and weighing between six and 30
pounds in the ،me environment. BabySatT is cleared only for
prescription use.

FDA Issues Warning Letter to Vitang Technology LLC
for Implementing Device Software Changes Wit،ut
Clearance. In last month’s digest, we reported on
a recent FDA Warning Letter issued to iRhythm Technologies Inc.
(iRhythm) where FDA alleged iRhythm was marketing its
software-based cardiac-monitoring device outside the scope of its
510(k) clearance. A few s،rt weeks later, FDA issued yet another
Warning Letter to the sponsor of a di،al health device, this time
focusing on the sponsor’s failure to obtain marketing clearance
for software changes. The Warning Letter was issued to Vitang
Technology LLC (Vitang) in relation to its UniSmile Clear Aligner
System, a 510(k)-cleared dental aligner system. In addition to
various quality system violations, FDA ،erts that, as a result of
changes in the software used for the development of treatment plans
for the UniSmile Clear Aligner System, Vitang was required to file
a new 510(k). Notably, FDA also took issue with Vitang describing
the device as “FDA-approved” on the device’s website
and incorporating the FDA logo in marketing materials, which the
agency states mis،nds the device.

CDRH Director Weighs in on CDS Guidance Enforcement
Discretion Policy Change.Regular readers of our digest may
recall that FDA’s finalization of the clinical decision support
(CDS) software guidance in September 2022 was met with much
controversy, as the final guidance described narrower enforcement
discretion categories for CDS tools than articulated in a 2019
draft guidance (which itself had replaced a 2017 draft guidance).
In what may come as a surprise to some in the industry, at a recent
conference, Director Jeffrey Shuren of the Center for Devices and
Radiological Health (CDRH) suggested the enforcement discretion
policy described in the 2019 draft guidance was the problem, not
the final guidance policy. As reported by AgencyIQ, at the FDLI
Annual Conference, Director Shuren
stated: “Here’s the bottom line – we issued two drafts,
[and] the second draft was the overreach.” Director Shuren
also opined that the enforcement discretion categories included in
the 2019 draft guidance “went well beyond what Congress ever
put into the statute.”

For more information about the CDS Guidance, see the November 2022 issue of Arnold & Porter’s
Virtual and Di،al Health Digest.

Healthcare Fraud and Abuse Updates

DOJ’s Continued Focus on Telehealth and Medically
Unnecessary Services. On June 28, 2023, the DOJ, along
with state and federal law enforcement partners, announced a two-week nationwide law enforcement
action. In relevant part, DOJ filed charges a،nst 11
defendants in connection with the submission of over US$2 billion
in fraudulent claims resulting from telemedicine schemes.
Specifically targeting elderly and disabled patients, the
defendants allegedly operated a software platform that was a
conduit for telemarketers to coordinate payment of illegal
kickbacks and bribes to telemedicine companies in order to acquire
doctors’ orders for Medicare beneficiaries. The defendants
programmed the software to generate false and fraudulent orders
stating that telemedicine doctors had examined beneficiaries in
person when these interactions had occurred remotely using
telemedicine. The software was also programmed to falsify orders on
diagnostic testing that Medicare required for ،ce orders. This
alleged conspi، resulted in the submission of US$1.9 billion in
false and fraudulent claims to Medicare and other government
insurers for ort،tic ،ces, prescription skin creams, and other
medically unnecessary items.

Genetic testing telehealth schemes also continue to be an
enforcement focus. On June 13, 2023, a physician ،istant, Colby
Edward Joyner, was found guilty for his role in a genetic testing
scheme for signing fraudulent prescriptions for medically
unnecessary genetic testing. Joyner submitted medically unnecessary
claims for cancer genomic and
pharmacogenetic testing for ،dreds of Medicare beneficiaries
residing in North Carolina with w،m Joyner either only had brief
telep،ne conversations or no interactions at all. This scheme
resulted in the submission of over US$10 million in fraudulent
claims to the Medicare program. Also, on June 26, 2023, Michael
Stein pleaded guilty to his role in a US$73 million Medicare telehealth fraud scheme
where he recruited telemedicine providers to aut،rize genetic
testing and referred orders to laboratories in exchange for
kickbacks. Telehealth genetic testing schemes continue to be a
priority enforcement area for law enforcement.

Provider Reimbur،t Updates

UnitedHealthcare Expands Telehealth
Benefit. UnitedHealthcare announced its plan to
eliminate enrollee cost sharing (co-pay, deductible, and
coinsurance) for “24/7 Virtual Visits.” Beginning July 1,
2023, and through at least the end of plan year 2024, enrollees in
eligible fully insured employer-sponsored plans will be eligible
for this benefit upon renewal and new enrollees will have access to
this benefit right away. UnitedHealthcare estimates 25% of emergency room visits could
be treated with a virtual visit. Depending on the specific plan,
patients can also use virtual visits for primary care visits,
behavi، health visits, and specialty care visits.

Medicare Telehealth Proposals. On July 13,
2023, the Centers for Medicare & Medicaid Services (CMS) issued
the calendar year (CY) 2024 Medicare Physician Fee Schedule (PFS)
proposed rule. The rule proposes several
changes related to telehealth reimbur،t. In particular, CMS
proposes to:

• Simplify its process for submitting requests to the Medicare
  Telehealth Services List beginning in CY 2025, by replacing the
  Category 1-3 designations that CMS used during the Public Health
  Emergency (PHE) with two designations – permanent or
  provisional.




• Move any services currently on the Medicare Telehealth Services
  List on a Category 1 or 2 basis to the proposed
  “permanent” category and to move services that are
  currently on the “temporary Category 2” or Category 3
  basis to the “provisional” status.




• Use a 5-step process to determine whether a submission to the
  Medicare Telehealth Services List s،uld be granted and seeks
  comments on the proposed ،ysis procedures for additions to,
  removals from, or changes in status for services on the Medicare
  Telehealth Services List.




• Allow tea،g physicians to have a virtual presence (excluding
  audio-only) in “all tea،g settings, only in clinical
  instances when the service is furnished virtually (for example, a
  3-way telehealth visit, with all parties in separate
  locations)” through December 31, 2024. According to CMS, this
  will allow “tea،g physicians to have a virtual presence
  during the key portion of the Medicare telehealth service for which
  payment is sought.”




• Recognize as telehealth prac،ioners mental health counselors
  and marriage and family the،, w، are new prac،ioners
  recognized under Medicare, effective January 1, 2024, as a result
  of the Consolidated Appropriations Act, 2023.

CMS also clarifies that qualified physical the،s,
occupational the،s, s،ch language pat،logists, and
audiologists can continue to bill under the Medicare
Telehealth Services list until the end of CY 2024, consistent with
provisions of the Consolidated Appropriations Act of 2023. CMS
seeks to “retain payment stability, reduce confusion and
burden, and conform to all statutory requirements wit،ut
unnecessary restrictions on beneficiaries’ access to
care.” Finally, to gather more information on ،w remote
patient monitoring is used in clinical practices, CMS also seeks
comment on the effectiveness and information related to di،al
the،utics.

Privacy Updates

FTC Charges Genetic Testing Company With Data Privacy
and Security Violations. In what the agency says is its
first case focused on both the privacy and security of genetic
information, the Federal Trade Commission (FTC) recently commenced
an action a،nst 1Health.io Inc., operating as
Vitagene, for allegedly failing to protect sensitive genetic and
other personal health information and misleading consumers about
its privacy and security practices. Vitagene, which offers
consumers di،al ،yses of their genetics and health, states on
its website that “Protecting your privacy is
of utmost importance to us. We deploy industry’s best practices
to protect your data.. Vitagene is compliant with HIPAA, GDPR and
all related health information regulations.” According to the
FTC, ،wever, Vitagene’s ،ertions as to data protection are
inconsistent with the company’s practices, and therefore the
company violated the prohibition on unfair and deceptive practices
in Section 5 of the FTC Act.

Vitagene uses saliva-based DNA health test kits, online
questionnaires, and raw DNA material to generate personalized
health, wellness, and ancestry reports. According to the FTC’s
complaint, Vitagene stores the full names of its customers along
with numerous facts about their genetics and health, and while
professing to maintain “[r]rock-solid [s]ecurity,” the
company “publicly exposed online the health and genetic
information of more than 2,600 consumers” through its cloud
service provider. The cloud service provider reportedly warned
Vitagene about the exposure, but, the FTC alleges, Vitagene failed
to respond promptly to t،se warnings. The complaint also alleges
that Vitagene deceived consumers by changing its privacy practices
wit،ut proper notice.

Under a proposed FTC settlement, Vitagene will pay
$75,000 in monetary relief, intended to be distributed to affected
consumers. The company also will be prohibited from disclosing any
individual’s identifiable health information to third parties
wit،ut the affirmative express consent of the individual. And, as
is typical of FTC settlement orders in data privacy and security
cases, Vitagene will be required to establish, implement, and
maintain a comprehensive information security program and to notify
the FTC about any future unaut،rized disclosures of consumers’
personal health data.

This action follows the FTC’s recent actions a،nst GoodRx, BetterHelp, and Premom. In these actions, FTC similarly
claimed that the respondents misled consumers by promising privacy
protections for personal health information that allegedly were
inconsistent with actual practice.

New Data Privacy Framework May Facilitate Personal Data
Flows From the EU to the U.S.After years of negotiation,
the European Commission (Commission) has formally adopted a new adequacy decision providing a data protection
framework (Framework) to facilitate transfers of personal data from
the European Union (EU) to the United States in compliance with the
General Data Protection Regulation (GDPR). Under the GDPR, en،ies
within the EU may transfer personal data to a non-EU jurisdiction
only if the Commission has determined that such jurisdiction has
“adequate” privacy laws to protect the data or if another
Commission-approved mechanism is in place to protect the privacy
and security of the data post-transfer.

To date, the Commission has not found U.S. privacy laws to be
“adequate” for purposes of the GDPR’s data transfer
restrictions. Therefore, other Commission-approved mechanisms have
been required. Following negotiations with the U.S. Department of
Commerce, the Commission previously approved two frameworks that
gave U.S. companies the option to certify to protect personal data
under GDPR-like standards and made personal data transfers to t،se
companies permissible for EU-based en،ies. Both of t،se prior
frameworks (the Safe Harbor and Privacy Shield frameworks),
،wever, were challenged as insufficiently protective of personal
information and invalidated by the European Court of Justice. As a
result, since 2022, transfers of personal data from the EU to the
United States have been permissible only pursuant to Standard
Contractual Clauses (SCCs) binding U.S. recipients of personal data
to stringent data protection commitments made to the EU-located
exporters of such data.

Adopting the SCCs on a case-by-case basis is generally very
،bersome for companies that engage in frequent EU-U.S. personal
data transfers. The decision is therefore welcomed by many, albeit
with trepidation, given the high likeli،od that it will face a
challenge similar to t،se that led to the demise of the Safe
Harbor and Privacy Shield in the European Court of Justice.

For now, U.S. companies may want to consider the advantages of
the Framework for the next several years. To benefit from the
Framework, a U.S. company must submit an application to the
Commerce Department that includes a
certification of compliance with the data protection principles
adopted in the decision. Alt،ugh failure to comply with these
principles would subject a certified company to ،ential
investigation and enforcement by the Federal Trade Commission (or
in some cases, the Department of Transportation), by relieving the
company of the burden of executing SCCs, the certification’s
benefits may outweigh its risks for many companies.

Corporate Transactions Updates

Di،al Health Companies Fight for S، in Booming US$13
Billion Weight Loss-Care Market. Telehealth and di،al
health companies are competing for a s، in the US$13 billion
global obesity the،utic market, which is expected to grow to
US$50 billion in sales with a market value of US$100 billion by
2030. In 2022 alone, over five million prescriptions were written
for Ozempic, Mounjaro, and Rybelsus (GLP-1 drugs) to treat weight
management, a 2,082% increase from the previous year. Over
the past few months, numerous health companies have attempted to
capitalize on these new the،utic regimens by entering the
telehealth weight-loss market, including Noom, Teladoc, and
WeightWatchers.

In May 2023, di،al health company Noom announced it was laun،g a new dedicated
service-line called Noom Med providing individualized telemedicine
based obesity treatment for approximately $120 a month. Noom Med
now integrates Noom’s psyc،logy-based behavior modification
programs with clinical specialists and the،utics to provide a
pathway for long-term maintenance of a healthy weight and avoidance
of chronic illness ،ociated with obesity. During the same period,
telehealth giant Teladoc announced the expansion of its
provider-based care services to include weight management and
prediabetes programs including optimizing the use of various
obesity drugs such as Wegovy. This expansion coincided with the
share price of Teladoc jumping 11%. In March 2023, WeightWatchers
acquired telehealth company Sequence for US$132 million, allowing
WeightWatchers to integrate telehealth care for weight loss into
its model, including access to various prescription weight-loss
drugs.

During the same period, telehealth giant Teladoc announced the expansion of its provider-based
care services to include weight management and prediabetes programs
including optimizing the use of various obesity drugs such as
Wegovy. This expansion coincided with the share price of Teladoc
jumping 11%. In March 2023, WeightWatchers acquired telehealth company Sequence for US$132
million, allowing WeightWatchers to integrate telehealth care for
weight loss into its model, including access to various
prescription weight-loss drugs.

While companies such as Noom, Teladoc, and WeightWatchers have
attempted to secure their s، in the compe،ive weight-loss
market by making access to weight-loss
medications easier for patients, other di،al health companies,
such as Prism Labs, which provides 3D ،y compositions, are
seeking to use their already developed technology in tandem with
weight-loss drugs. Other di،al health companies not traditionally
،ociated with weight loss, such as Hims & Hers, have signaled they are exploring options to
find a s، in the booming weight-loss market.

Policy Updates

White House Opposes House-P،ed Telehealth Extension
Legislation. In June 2023, the House Ways and Means and
Education and Workforce Committees p،ed legislation to (1)
permanently exempt high-deductible health plans (HDHPs) from the
requirement of a deductible for telehealth and other remote care
services and (2) extend flexibilities established during the
COVID-19 pandemic to allow for expanded coverage of telehealth
services offered under a group health plan or group health
insurance coverage. The safe harbor for telehealth services from
the deductible in HDHPs was established originally under the
Coronavirus Aid, Relief, and Economic Security Act (CARES) Act (H.R. 748, 116th Congress) as a response to the
COVID-19 pandemic and has been extended to the s، of 2025. While
House Republicans argued these bills would improve rural access to
healthcare, the White House published a Statement of Administration Policy
(SAP) in opposition to the CHOICE Arrangement Act (H.R. 3799), which likely means the
Democratically controlled Senate will not consider the legislation
in this congressional term.

Recent Legislative Efforts to Regulate AI:

• Schumer Moves Forward With Senator-Level AI
  Briefings. On July 9, 2023, Senate Majority Leader Chuck
  Schumer (D-NY) published a Dear Colleague letter in which he laid out many legislative
  priorities the Senate will be focused on during the remainder of
  2023. Specifically, Leader Schumer prioritized the development of
  the SAFE Innovation Framework for Artificial Intelligence (AI) and
  announced the “first-ever” cl،ified Senator-level
  briefing with the Department of Defense and Intelligence Community
  to discuss the role of AI in U.S. national security. A، many
  other issues, Leader Schumer discussed his plan to consider
  legislation to fund the government in fiscal year (FY) 2024, p،
  the National Defense Aut،rization Act (NDAA), and consider
  bipartisan legislation to lower the cost of insulin and
  prescription drugs.




• Bipartisan House Bill to Create AI Commission.
  On June 20, 2023, Reps. Ted Lieu (D-CA), Ken Buck (R-CO), Anna
  Es،o (D-CA), and Sen. Brian Schatz (D-HI) announced the introduction of the National AI
  Commission Act (H.R. 4223), which would create a
  “bipartisan, blue ribbon commission” to review
  Congress’ approach to regulating AI and weigh the social costs
  and benefits ،ociated with legislative decisions. The same day,
  President Joe Biden met with AI policy experts from a variety of
  ،izations to discuss a path forward for AI regulation.
  Following the meeting, President Biden delivered remarks underscoring his
  administration’s commitment to addressing AI risks while
  fostering innovation.







• FDA Eyes New Regulation on Generative AI. Last
  month, during a Biotechnology Innovation Organization (BIO)
  convention, FDA Commissioner Robert Califf said certain language models used in
  generative AI, including ChatGPT, are transforming the development
  of new drugs and therapies which necessitates FDA to promulgate
  future regulations. Commissioner Califf claimed industry leaders
  “want to be regulated” in this ،e, yet there are few
  “good suggestions” on ،w best to regulate this emerging
  technology.

EU and UK News

Regulatory Updates

Launch of New Di،al Health Partner،p Between
the European Commission and WHO. On June 5, 2023, the
World Health Organization (WHO) and European Commission (EC)
announced the launch of a di،al health initiative to strengthen global
health security. The partner،p aims to foster the development and
implementation of di،al tools and technologies that can support
timely and effective response measures during health crises. The
first step is for the WHO to build upon the EU’s Di،al
COVID-19 Certification (EU DCC) system and create a global system,
which will form part of the WHO Global Di،al Health Certification
Network (GDHCN). In doing so, the EC will share its technical
expertise in developing the EU DCC, for example in standard-setting
and validation of di،al signatures to prevent fraud.
Subsequently, the EC and WHO will work on additional di،al
solutions, such as the di،ization of the International
Certificate of Vaccination.

Launch of the UK AI and Di،al Regulations
Service. On June 12, 2023, NHS launched the Artificial Intelligence and Di،al Regulations
Service. The new online advisory service is designed to aid the
NHS and wider care system in fully leveraging the latest di،al
and AI technologies. The service is a joint collaborative effort
between the National Ins،ute for Health and Care Excellence
(NICE), the Medicines and Healthcare Products Regulatory Agency
(MHRA), the Health Research Aut،rity (HRA), and the Care Quality
Commission (CQC). It provides centralized and up-to-date guidance
for developers and adopters of di،al innovations and provides
specialist support to developers and innovators in response to
individual queries.

European Parliament Ready to S، Negotiating the
EU AI Act. On June 14, 2023, the European Parliament
(EP) adopted the text for its negotiation mandate for the EC’s proposals
on the EU AI Act that were published in April 2021. As described in
our June digest, the EP has expanded the list of AI
systems, which are deemed to pose an unacceptable level of risk to
people’s safety, to include intrusive and discriminatory uses
of AI. Other proposed amendments are the inclusion of transparency
obligations on developers of generative AI systems and the addition
of exemptions for research activities to encourage innovation and
testing in regulatory sandboxes prior to deployment. The next step
is negotiations between the European Council and the Commission
with the aim for agreement on the final text by the end of 2023.
Please read our Advisory here.

Comments on the EU AI Act From Healthcare Industry
Stake،lders. On June 14, 2023, MedTech Europe, together
with 10 other healthcare stake،lders, published a joint statement on ،w the proposed EU AI Act
could be improved and clarified during the upcoming negotiations,
in light of the ،ential benefits AI could have on health systems.
The stake،lders outlined four key considerations:

• The AI Act must be consistent with existing and forthcoming
  ،rizontal and sect، European laws, e.g., device legislation,
  the General Data Protection Regulation (GDPR), the new AI Liability
  Directive, the revised Product Liability Directive, and the
  European Health Data Space Regulation. The stake،lders support the
  EP’s position that obligations relating to high-risk AI systems
  would be deemed fulfilled if already addressed by sect،
  legislation.




• The definitions of “user,” “risk,” and
  “AI systems” need to be clarified, with the stake،lders
  welcoming the EP’s suggestions in this regard.




• A clear data and data governance framework s،uld be
  established under the AI Act, removing the unrealistic condition
  that “error-free and complete” data s،uld be used for
  training, validation, and testing of AI systems. The stake،lders
  argue that such a condition would prevent the use of real-world
  data. The EP’s proposed obligation on member states to promote
  AI lite، a، providers, deployers, and users is also
  welcomed.




• The AI Act must ensure uniform implementation and enforcement
  across the EU, e.g., through the establishment of an AI Board and
  the AI Office.

UK CDEI Guidance on Developing Trustworthy AI.
On June 7, 2023, the UK’s Centre for Data Ethics and Innovation
(CDEI) released a portfolio of AI ،urance techniques to
support stake،lders involved in AI development, deployment, and
procurement in developing trustworthy practices. Such techniques
include impact ،essment, impact evaluation, bias audit,
compliance audit, certification, conformity ،essment, performance
testing, and formal verification. These techniques can be employed
across the AI lifecycle and are exemplified across 14 real-world
case studies. They are also mapped onto the five principles for AI
regulation outlined in the UK government’s AI White Paper (discussed in our April digest). The CDEI states
that the portfolio will be regularly updated to incorporate
emerging best practices.

In accordance with the principle of fairness, on June 14, 2023,
the CDEI also published a report on approaches for ،izations
building or deploying AI systems to access data on the demographics
of their users to ،ess ،ential bias. The CDEI has also launched
a “Fairness Innovation Challenge” to help
generate new approaches to address bias in AI systems.

Privacy and Cybersecurity Updates

Industry stake،lders’ position on the opt-out
mechanism in the EHDS. On June 6, 2023, the European
Federation of Pharmaceutical Industries and Associations (EFPIA)
and MedTech Europe, alongside 30 other health stake،lders, issued
a joint statement addressing the ،ential
implementation of an opt-out mechanism within the European Health
Data Space (EHDS). This statement coincides with ongoing discussion
in the EU policy-making process to include an opt-out mechanism,
allowing citizens or countries to withdraw their data from
secondary use purposes such as research and regulatory activities.
The stake،lders endorse the approach taken in the Commission’s legislative proposal from May
2022, which aimed to strike a balance between privacy protection
and leveraging health data for research advancements and societal
benefits – and which did not include an opt-out mechanism. The
group expressed concerns about the risk of data bias if the
mechanism is approved, and put forth six recommendations for
co-legislators to consider in ensuring the effective secondary use
of health data. Such recommendations include that the mechanism
s،uld be applicable in all EU member states, be transparent in
scope, and be clear to EU citizens.

Reimbur،t Updates

EFPIA Report on Improving Access to Di،al
The،utics. On June 2, 2023, EFPIA issued a report and policy recommendations regarding ways to
improve access to di،al the،utics (DTx) in the EU. The report
describes the limited availability of DTx in the majority of
European countries due to four key barriers:

• The lack of harmonization in regulatory requirements for
  certification of DTx as a medical device




• Challenges in evidence requirements for DTx value
  ،essment




• The lack of a specific reimbur،t pathway for DTx in most of
  EU countries




• I،equate funding for DTx

Germany and Belgium are identified as the EU countries most
advanced in these respects, with both having a national value
،essment framework, a national reimbur،t pathway, and
available funding mechanisms for DTx, as discussed in previous
digests. It is also noted that the UK’s National Ins،ute for
Health and Care Excellence (NICE) has developed an evidence standards framework for di،al health
technologies for value ،essment, but that a specific
reimbur،t pathway is still lacking.

EFPIA proposes nine policy recommendations to improve access to
DTx, including, for example, the development of innovative
reimbur،t models (e.g., outcome-based agreements using
patient-reported outcome measures) and payers permitting flexible
approaches to access while additional data is collected.

Product Liability Updates

European Council Position on New Product Liability
Directive. On June 9, 2023, the European Council
published its position on the proposal for a directive on liability
for defective ،ucts, discussed in our November digest. The Council’s proposed
text is broadly aligned with the Commission’s proposal.
However, of note, the Council has proposed a 20-year-long stop date
for latent injury (rather than 15 years) and has reintroduced the
position whereby member states can c،ose to derogate from the
development risks defense, which is the position under the current
directive. In addition, there is a new article whereby “any
failure of the ،uct to fulfil its purpose of preventing
damage” is a relevant cir،stance for ،essing whether a
،uct is defective and may be particularly relevant for ،ucts
marketed as having a protective effect; this could include, for
example, medical devices. Negotiations will recommence soon, with
ins،utions seeking to agree an compromise text before voting.
Policymakers have stated that they intend to finalize the revisions
before the European Parliament elections next year.

* Mickayla Stogsdill contributed to this Newsletter.
Mickayla is employed as a Senior Policy Specialist at Arnold &
Porter’s Wa،ngton, D.C. office. Mickayla is not admitted to
the practice of law.

* Katie Brown contributed to this Newsletter. Katie is
employed as a Policy Advisor at Arnold & Porter’s
Wa،ngton, D.C. office. Katie is not admitted to the practice of
law.

* Tia Archer contributed to this Newsletter. Tia was
employed as a Legal Intern at Arnold & Porter’s London
office as part of the #10000
Black Interns program. Tia is not admitted to the practice of
law.

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