At Last, FDA Goes on Record with Pledge Not to Regulate and Tax Consumers' Smartphones and Tablets
WASHINGTON, DC – The Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), today concluded the committee’s three-day “Health Information Technologies” hearing series focused on potential regulations and taxes on smartphones, tablets, mobile apps, and other health information technologies. In July 2011, the FDA proposed regulating medical applications. This month, committee leaders wrote to FDA Commissioner Margaret Hamburg seeking more information on these proposed regulations including whether FDA intends to regulate smartphones, tablets, and mobile apps and whether it would trigger the 2.3 percent medical device tax included in the president’s health care law.
“I have seen that in today’s testimony the FDA is now definitely saying: No, we will not regulate the general sale of smartphones or tablets. I thank the FDA for providing certainty on this matter,” said Subcommittee Chairman Murphy. “Over the last two days we have heard from a variety of witnesses and members of both sides of the aisle — the message is clear: we need final guidance. The developers of these apps and the health care industry need certainty. That certainty is also needed because of the tax on medical devices put in place by the new health care law. As we have heard this week, a tax on medical devices can make capital needed to develop these apps and new breakthrough technologies more scarce. The tax can slow innovation.”
On Tuesday, the Subcommittee on Communications and Technology began the hearing series with a look at the mobile medical application market. Dr. George Ford, Chief Economist at the Phoenix Center for Advanced Legal and Economic Public Policy Studies, explained that regulations could raise costs and hurt innovation in the mobile medical application market. Ford explained, “An inevitable and arguably intended effect of FDA involvement is to raise the cost of innovation and to alter the trajectory of innovation. Uncertainty, delays and the fixed costs related to the regulatory process reduce expected returns, and thus discourage firms from participating in the healthcare industry. As such, we must expect FDA review of mobile applications to slow innovation and to reduce competition.”
On Wednesday, the Subcommittee on Health learned how innovative medical technologies can benefit American patients and discussed what steps need to be taken to foster innovation and growth. Dr. Jacqueline Mitus, Senior Vice President of Clinical Development and Strategy at McKesson Health Solutions, expressed concern that regulations are already failing to keep up with health technology innovation and applying medical device regulations to health IT would further hamper innovation. Mitus stated, “We are using a 40-year-old law to regulate rapidly changing and dynamic technology. We are regulating manufacturing instead of use, and we are marginalizing the role of clinicians. Simply put, we must not impede medical advances with medical device regulation that is ill-suited for health IT.”
After the committee heard two days of testimony describing the uncertainty surrounding potential regulatory action and the dangers of regulating and taxing innovative technologies, Christy Foreman, Director of the Office of Device Evaluation in the Center for Devices and Radiological Health at FDA, unequivocally testified this morning that FDA’s policy on mobile medical apps will not include the regulation of consumers’ smartphones or tablets. Foreman said, “Just as importantly as what our policy proposes is what our policy does not propose. It would not regulate the sale or general consumer use of smartphones or tablets. It would not consider entities that exclusively distribute mobile medical apps, such as the ‘iTunes App store’ or the ‘Android market,’ to be medical device manufacturers. It would not consider mobile platform manufacturers to be medical device manufacturers just because their mobile platform could be used to run a mobile medical app regulated by FDA. It would not require mobile medical app developers to seek Agency re-evaluation for minor, iterative product changes. And, it would not apply to mobile apps that perform the functionality of an electronic health record (EHR) system or personal health record system.”
Energy and Commerce Committee Chairman Fred Upton (R-MI) applauded the three subcommittees as their work culminated in a definitive answer from FDA, stating, “While FDA has yet to issue its final guidance, it is a relief to hear that they will not be moving forward with regulations on smartphones or tablets. This is a big win for both consumers and innovators. We can only hope FDA sticks to its word and continues to allow doctors and developers to operate in an environment that promotes innovation with an eye toward improving patient care. The committee will continue working to ensure our nation’s health care system and government are operating in a manner that serves the best interest of patients and fosters innovation throughout the marketplace.”