This digest covers key virtual and digital health regulatory and public policy developments during September and early October 2024 from the United States, United Kingdom, and European Union.
In this issue, you will find the following:
U.S. News
- FDA Regulatory Updates
- Health Care Fraud and Abuse Updates
- Corporate Transactions Updates
- Privacy and AI Updates
- Policy Updates
U.S. Featured Content
On September 18, 2024, the state of Texas reached a landmark settlement with Pieces Technologies (Pieces), a Dallas-based health care company, settling allegations that its generative artificial intelligence (AI) products were not as accurate as advertised. As part of the settlement, Pieces agreed to clearly and conspicuously disclose the meaning or definition of used metrics, benchmarks, or similar measurements, as well as the method or procedure used to calculate these metrics and benchmarks; to accurately disclose the extent of its products' accuracy; and to clearly and conspicuously provide customers any known or potentially harmful uses or misuses of its products or services.
EU and UK News
EU/UK Featured Content
Guidance on AI continues to be published. In the EU, the European Medicines Agency (EMA) has published its Reflection Paper on the use of AI throughout the medicines life cycle. In the UK, the Medicines and Healthcare products Regulatory Agency (MHRA) opened applications for its AI Airlock, a regulatory sandbox for AI as Medical Devices. And over 100 companies have signed up to join the EU AI Pact, a voluntary initiative to encourage companies to comply with the AI Act before the statutory deadlines. These guidance documents and initiatives provide companies with much greater clarity on how the authorities will regulate the use of AI in health care.
U.S. News
FDA Regulatory Updates
FDA Announces Inaugural Meeting of the Digital
Health Advisory Committee (DHAC). On September 17,
2024, the U.S. Food and Drug Administration (FDA) announced that it
will hold the inaugural meeting of the DHAC on November 20-21,
2024, in hybrid format. The meeting will address total product
lifecycle considerations for generative AI-enabled devices,
including how the use of generative AI may impact the safety and
effectiveness of medical devices enabled with this
technology.
FDA Creates Digital Health and Artificial
Intelligence Glossary. On September 26, 2024, FDA
issued a Digital Health and Artificial Intelligence Glossary. The
glossary is intended to help FDA and stakeholders consistently use
digital health and AI terminology.
FDA Authorizes Marketing of First Over-the-Counter
Hearing Aid Software. On September 12, 2024, Apple,
Inc. (Apple) received marketing authorization through the de
novo pathway for Hearing Aid Feature, the first over-the-counter
hearing aid software. The device is a software-only mobile medical
application that is intended to be used with compatible wearable
electronic products. The feature is intended to amplify sounds for
individuals 18 years or older with perceived mild to moderate
hearing impairment. Users may customize the Apple Hearing Aid
Feature to meet their hearing needs without the assistance of a
hearing health care professional. In authorizing the Apple Hearing
Aid Feature, FDA is establishing a new Class II classification for
"air-conduction hearing aid software."
Health Care Fraud and Abuse Updates
DOJ Releases September 2024 Update to Its
Evaluation of Corporate Compliance Programs Guidance.
On September 23, 2024, the Criminal Division of the U.S. Department
of Justice (DOJ) released its revised guidance, the Evaluation of
Corporate Compliance Programs (ECCP), following its last update in
March 2023. Among other additions, the ECCP includes a list of
questions for prosecutors to consider in regard to a company's
management of risks to ensure compliance with applicable laws in
the face of increased use of AI.
OIG Issues Report on Remote Patient Monitoring in
Medicare. On September 24, 2024, the U.S. Department
of Health and Human Services (HHS) Office of Inspector General
(OIG) released a report titled "Additional Oversight of Remote
Patient Monitoring in Medicare is Needed" where OIG
highlighted the growing use of remote patient monitoring across the
Medicare population. As a result of the expectation that
utilization will continue to increase, OIG notes that there is a
need to understand how remote patient monitoring is being utilized,
including who is receiving it and for what conditions, as well as
the need to identify vulnerabilities that could limit the oversight
of these services. OIG ultimately recommended various steps that
the Centers for Medicare & Medicaid Services (CMS) can take in
order to strengthen and bolster oversight and integrity of remote
patient monitoring.
California Implements New AI Health Care Laws. On
September 28, 2024, California Governor Gavin Newsome enacted two
AI-focused health care bills into law, setting new requirements for
health insurers, physicians, and other qualified health care
providers. First, Newsome signed SB 1120, which requires health care service
plans or specialized health care insurers that use AI to comply
with certain requirements in order to ensure that provider
decision-making does not become superseded by AI. Newsome also
signed AB 3030 into law which requires health
facilities, clinics, physician's offices, or offices of a group
practice that use AI to create written or verbal patient
communications related to patient clinical information to guarantee
that these communications include (1) a disclaimer specifying to
the patient that this communication was AI generated and (2) clear
instructions detailing how a patient can speak to a human health
care provider, employee, or other appropriate person.
Corporate Transactions Updates
Investors Bet Big on Digital Health AI: The New Frontier
Where Algorithms Make House Calls. Venture Capitalists
continued to pour money into digital health funding at the end of
Q3 and the beginning of Q4 of 2024.
On September 26, 2024, Mendaera, Inc., a Silicon Valley-based
health care technology company, completed a $73 million Series B funding round
led by Threshold Ventures. Mendaera plans to use its Series B
funding to develop a new robotic platform integrating AI, real-time
imaging, and virtual connectivity to assist with mainstream medical
procedures. While robots have previously been used in specialized
surgeries, Mandaera's platform intends to utilize an AI-powered
platform to perform more general procedures such as biopsies, organ
and vascular access, and pain management interventions.
On September 30, 2024, it was announced that Colorado-based VieCure
completed a $45 million financing led by
Northpond Ventures that will be used to meet the increasing demand
for its AI-enabled community oncology care platform "Halo
Intelligence." Halo Intelligence helps oncologists better
manage cancer treatments by bringing together patient-data-like
genomics, treatment responses, and wearable data for its more than
18,000 patients who are supported by the platform daily.
Seattle-based Rippl, an AI-powered virtual dementia care company,
announced on October 2, 2024 that it raised $23 million in its Series A funding
from a team of investors including General Catalyst, Mass General
Brigham Ventures, and Google Ventures. Rippl currently partners
with the Alzheimer's Association to provide virtual care for
seniors facing Alzheimer's and other dementias, anxiety, and
depression in Washington, Texas, Illinois, and Missouri.
Rippl's new funds will be used to expand its care into new
markets over the next four years, including California, Florida,
and Arizona.
Privacy and AI Updates
AI Health Care Company Reaches Settlement With Texas
Attorney General Regarding Misleading Claims of Generative AI
Accuracy. On September 18, 2024, Texas Attorney General
Ken Paxton announced that he had reached a settlement with Pieces
Technologies, Inc., a company that develops and deploys AI-based
products and services for use by in-patient health care facilities,
including clinics and hospitals, resolving allegations that the
company violated the state's deceptive trade practices law by
making false and misleading claims about the accuracy and safety of
its products. This settlement ensued from an investigation
undertaken as part of a "major data privacy and security
initiative, establishing a team that is focused on aggressive
enforcement of Texas privacy laws," that Paxon launched in June 2024.
As described on the Pieces website, Pieces Technologies:
Clinical Generative AI for frontline care teams, the
company's AI technology automates the creation of detailed
notes by drawing on the entirety of a patient's Electronic
Medical Record. According to the settlement agreement, Pieces developed a
series of metrics and benchmarks purporting to show that the
outputs of its generative AI products were highly accurate.
Attorney General Paxon asserted that Pieces falsely advertised the
accuracy of its generative AI products by claiming that they have a
"critical hallucination rate" and "severe
hallucination rate" of less than .001%. As stated in his press release on the settlement, Paxon's
investigation found that these statements were likely inaccurate
and may have deceived hospitals into relying on the company's
products.
Although the settlement agreement does not require Pieces to pay
penalties, it imposes a number of ongoing obligations on the
company to address its alleged false advertising practices. This
includes clearly and conspicuously disclosing the meaning or
definition of used metrics, benchmarks, or similar measurements, as
well as the method or procedure used to calculate these metrics and
benchmarks; accurately disclosing the extent of its products'
accuracy; and clearly and conspicuously providing customers any
known or potentially harmful uses or misuses of its products or
services.
Policy Updates
Senators Wyden and Warner Introduce Federal
Cybersecurity Standards for America's Health Care
System. On September 26, 2024, Senate Finance
Committee Chair Ron Wyden (D-OR) and Sen. Mark Warner (D-VA)
introduced the Health Infrastructure Security and Accountability
Act (S. 5218; section by section), which would require the
HHS to develop and enforce a set of minimum cybersecurity standards
for health providers, health plans, clearinghouses, and business
associates. The bill intends to improve cybersecurity standards
following a period of increased cyberattacks on U.S.-based health
care systems.
Majority Leader Schumer and Senator Markey Call on
Biden Administration to Protect Civil Rights When Using
AI. On September 16, 2024, Senate Majority Leader
Chuck Schumer (D-NY) and Sen. Ed Markey (D-MA) sent a letter to Office of Management and Budget
(OMB) Director Shalanda Young urging all federal agencies to
prioritize the mitigation, prevention, and elimination of
algorithmic bias and discrimination, especially when utilizing
AI-based technologies. The letter asks OMB to consider requiring
all federal agencies that utilize AI to establish civil rights
offices tasked with mitigating algorithmic bias and
discrimination.
Stakeholder Groups Urge CMS to Increase
Reimbursement for Remote Monitoring Services. On
September 9, 2024, the American Telemedicine Association, Alliance
for Connected Care, and Connected Health Initiative sent a joint letter to CMS Administrator
Chiquita Brooks-LaSure urging the agency to "mitigate the
harmful effects" caused by reimbursement cuts for remote
physiologic monitoring (RPM) services included in the proposed
Calendar Year 2025 Medicare Physician Fee Schedule. The letter
urges CMS to pay for costs associated with offering RPM services,
including technologies that rely on software, licensing, and
analysis fees.
EU and UK News
Regulatory Updates
EMA Reflection Paper on the Use of AI in the Medicine
Life Cycle. On September 30, 2024, the EMA published its Reflection Paper on the use of
AI in the medicines life cycle, from medicine discovery to
post-authorization. The paper underscores the utility of AI in
digital transformation, while urging developers to take a
risk-based approach to ensure patient safety and data integrity.
You can read more in our October 2024 BioSlice blog.
MHRA Opens Applications for AI Airlock Pilot. As
reported in our June Digest, the MHRA recently launched the AI
Airlock, a new regulatory sandbox for AI as Medical Devices
(AIaMDs). It is intended to act as a platform for the relevant
stakeholders to collaborate to understand and mitigate novel risks
associated with AIaMDs. On September 23, 2024, the MHRA opened applications to take part in the AI
Airlock. Certain eligibility criteria must be met, including that
the product is innovative, presents a regulatory challenge, and
that the proposal is ready to be trialed. The call for applications
closed on October 7, 2024. You can read more in our May 2024 BioSlice blog.
Companies Join EU AI Pact to Encourage Compliance With EU
AI Act. Over one hundred companies have recently joined
the EU AI Pact. The EU AI Pact is a voluntary
initiative aimed at encouraging companies to begin implementing the
requirements in the AI Act. You can read more in our August 2024 BioSlice blog.
Draghi Report on the Future of European
Competitiveness. On September 9, 2024, the European
Commission published a report on The Future of European
Competitiveness, prepared by former European Central Bank President
Mario Draghi. Regarding pharmaceuticals, the report proposes policy
recommendations such as maximizing the EU Health Data Space (EHDS)
by improving access to and sharing of electronic health records,
increasing efforts to standardize existing health data sources to a
common data model, and leveraging the DARWIN EU network (i.e., the
network created by the EMA to deliver real-world evidence (RWE) to
generate evidence for innovation. It also calls for the use of AI
to support policy and clinical decision-making, as well as scale up
genome sequencing capacities. Though non-binding, the proposals
could influence future EU policies.
The MHRA Sets Out Its Data Strategy for 2024-2027.
On September 18, 2024, the MHRA published its Data Strategy for 2024-2027,
which addresses data, digital technology, and RWE focusing on five
key themes. For example, supporting data-driven innovation, early
access, and interdisciplinary data science to underpin the
regulatory framework, and enabling effective, timely, and
proportionate regulatory decision-making through RWE.
MHRA Provides a Progress Update on Roadmap for Future
Regulation of Medical Devices. As previously reported in
our February Digest, the MHRA published a roadmap
for the future regulation of medical devices in the UK. The MHRA now reports that some details and
timelines will be changed. The intention to update the Medical
Devices Regulations 2002 through statutory instruments (SI)
remains, beginning with an SI clarifying the rules on Post Market
Surveillance, which the government intends to lay before Parliament
by the end of the year.
The Innovative Health Initiative Launches a Project
Targeting Synthetic Data Generation. The collaborative
project, SYNTHIA, involves both industry and academia.
The aim is to provide validated, reliable tools and methods to
support the generation of synthetic data. SYNTHIA's tools span
multiple areas, including lab results, clinical notes, genomics,
imaging, and mobile health data. The output will be made available
to the research community.
Reimbursement Updates
Belgian Parliament Calls for Enhanced Accessibility and Affordability of Digital Health Applications. On September 3, 2024, the Belgian Parliament adopted a resolution calling for the Belgian government to advance digital health solutions. In particular, it calls for:
- Enhancing accessibility, affordability, and quality of digital health applications, with a special focus on vulnerable groups
- Encouraging KCE, the Belgian health care research institute, to conduct research on the implementation of digital health, particularly on digital health apps
- Defining a growth trajectory for increased federal investment in digital health, emphasizing research, innovation, and practical implementation
- Creating a legal framework for digital health apps
- Developing a system to expedite the approval and reimbursement of health apps with unproven socioeconomic value
NICE Recommends Digital Mental Health Technologies in an Effort to Improve Access to Mental Health Services. The UK National Institute for health and Care Excellence (NICE) conducted rapid assessments to recommend seven digital health technologies for the treatment of depression, post-traumatic stress disorder, social anxiety, body dysmorphic disorder, and generalized anxiety. The assessments compared the digital technology to face-to-face therapy.
Privacy Updates
ICO and NCA Will Enhance Collaboration on
Cybersecurity. The Information Commissioner's Office
(ICO) has agreed to a Memorandum of Understanding with
the National Crime Agency (NCA) for deeper collaboration regarding
cybersecurity. This includes the ICO sharing more information about
cyber incidents with the NCA on a systemic, anonymized, and
aggregated basis, and where suitable, also on an
organization-specific basis, in order to enhance the NCA's
visibility. Further, it encourages organizations to engage with the
NCA on security matters, including in relation to cybercrime.
New EFPIA Anonymization Gradient. On September 10,
2024, the European Federation of Pharmaceutical Industries and
Associations (EFPIA) introduced the Anonymization Gradient, a
visual tool to help EU and Member State bodies understand the
balance between preserving data utility and patient privacy. It
outlines various controls and degrees of data redaction, showing
the transition from personal to anonymized data. EFPIA believes the
tool will be particularly relevant for implementing anonymization
in the EHDS and national research programs.
IP Updates
European Patent Office Rejects Reinforcement Learning Patent for Lack of Technical Effect. The Board of Appeal of the European Patent Office (the Board) issued a decision against granting a patent with a claim including a machine learning system due to lack of inventive step. In case T 1952/21, the Board considered the "starting point" for assessing the technical character of reinforcement learning to be that simulation models are not themselves technical but may contribute to technicality if they:
- Are a reason for adapting the computer (at base of the claim) or its functionality
- Form the basis for further technical use of the outcomes of the simulation
In this case, the Board held that the computer was not adapted and no further technical use was claimed. Advantages in reinforcement learning were argued by the appellant, but the Board did not agree that these advantages were to be acknowledged — neither by experiments or theoretical considerations could it be concluded that a technical effect was present over the full breadth of the claim. Therefore, the appeal was refused.
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