Virtual And Digital Health Digest – November 2025

Welcome to the latest installment of Arnold & Porter's Virtual and Digital Health Digest. This digest covers key virtual and digital health regulatory and public policy developments during October and early November 2025 from the the United Kingdom, and European Union.

October saw significant progress in the artificial intelligence space, with international initiatives, of which the UK and EU play a central role, underscoring a shared global commitment to innovation, patient safety, and regulatory alignment.

In the UK, the Medicines and Healthcare products Regulatory Agency (MHRA) published findings from its AI Airlock pilot phase, which has now advanced to Phase 2, involving seven manufacturers tackling key regulatory challenges for AI medical devices. The MHRA also launched a new AI regulatory approach, seeking input on the proposed AI Growth Lab — a pioneering cross-economy sandbox designed to support responsible innovation.

In the EU, the European Commission introduced two major strategies: Apply AI, aimed at driving industrial adoption of AI technologies, and AI in Science, focused on advancing AI use in research and fostering collaboration. Additional initiatives include a Call for Projects Boosting Digital Health, reinforcing the EU's commitment to digital transformation.

Together, these efforts highlight the UK and EU's determination to engage stakeholders, accelerate technological progress, and ensure sustainable growth in critical sectors.

Regulatory Updates

Stronger Collaboration Between the UK and U.S. on the Regulation of Medical Technology. The MHRA and FDA have announced a deeper partnership to advance the regulation of medical technologies. A key development is the MHRA's new AI Commission on the Regulation of AI in Healthcare (highlighted in the October 2025 Digest) which will include input from U.S. experts as well as multinational tech companies. The commission aims to shape recommendations for governing medical technologies with an AI component.

In addition, the MHRA has also confirmed that incoming international reliance routes will enable medical devices approved by trusted regulators — such as the FDA — to gain faster access to the UK market.

Key Insights From the MHRA's AI Airlock Pilot Report. The MHRA has issued its report on the pilot phase of the AI Airlock, revealing critical regulatory challenges for AI in health care. One notable gap relates to AI validation of AI. For example, one manufacturer in the pilot used a large language model (LLM) to generate synthetic radiology reports and then applied both automated and human valuation. However, uncertainty arose when using this LLM-generated data to assess outputs from another LLM, due to concerns about reinforcing errors and bias. It was concluded that the AI validation of AI needs to be further explored to ensure safety, reliability, and trust in future medical technologies.

UK MHRA's AI Airlock Begins Phase 2. As highlighted in our June 2024 and July 2025 Digests, the AI Airlock is the MHRA's pioneering initiative to tackle challenges posed by AI medical devices (AIaMD). The project is now entering its next phase, with seven manufacturers of AI-powered health care technologies selected to participate. The selected technologies span clinical note-taking tools, advanced cancer diagnostics, eye disease detection tools, and treatment support systems for obesity. Phase 2 focuses on three key regulatory challenges: regulating evolving AI applications, post-market surveillance for AIaMDs, and the effective regulation of AI for diagnostics. Insights from this phase will inform the future regulation of AI in life sciences, including recommendations to the MHRA's National Commission into the Regulation of AI in Healthcare. Phase 2 is scheduled to run until March 2026.

UK Government Announces New AI Regulatory Approach To Drive Innovation. Central to this strategy is the introduction of the AI Growth Lab, a regulatory sandbox designed to help companies test innovative AI products in real-world conditions under temporarily relaxed regulatory requirements. A call for views on the AI Growth Lab to inform policy development is open until January 2, 2026.

UK Government Announces Deployment of New Digital Platforms, and AI Has Halved the Approval Time for Clinical Trials. The average approval time was reduced from 91 days to 41 days. In addition, AI will be introduced to assist with the review of complex data, although the final decision will remain with experienced assessors.

National Institute for Health and Care Excellence Announces New Initiative To Expand Health Technology Assessment To Include Medical Devices, Diagnostics, and Digital Tools. Technologies like wearable diabetes monitors and AI diagnostics tools will receive recommendations for NHS-wide implementation if they meet the relevant standards. The initiative is intended to address longstanding inequalities in technology adoption across different NHS regions and to eliminate "postcode lottery" access to health technology treatments.

European Commission Launches the EU Strategy To Apply AI EU Strategy and AI in Science. Following recent consultations (see our May 2025 Digest), the European Commission has unveiled two new AI-related initiatives:

• Apply AI EU Strategy aims to promote new industrial uses of AI technologies in strategic industrial sectors and boost innovation in EU companies. Proposed actions include establishing European Networks of Expertise on AI Deployment in Healthcare to consolidate guidelines and best practices; or, launching an AI Medicine Discovery Challenge to discover new medicines targeting unmet medical needs and hard-to-treat diseases. Other actions include developing guidelines on the classification of high-risk AI systems and on the AI Act's interplay with other European Union legislation.
• EU Strategy for AI in Science aims to advance AI use and development in scientific research. Highlights include launching a campaign to encourage private sector pledges to support AI in science, and a policy report from the Joint Research Centre, analyzing the use of AI in the scientific process and the AI-in-science landscape.

European Commission Launches Calls for Projects Boosting Digital Health Innovation. The chosen projects, which will obtain EU funding, should accelerate the deployment and use of innovative digital technologies across Europe. The projects include:

• €22.5 million for projects that support biomedical research and the roll out of personalized health care through the European Genomic Data Infrastructure
• €14.4 million for the deployment of AI-based solutions in medical imaging

Proposals can be submitted on the EU Funding & Tenders Portal for the call on Genomic Data Infrastructure and for the call on the deployment of AI-based solutions in medical imaging.

European Commission Launches Scaleup Europe Fund for Strategic Technology Companies. The fund, a multi-billion euro funding mechanism, will be co-financed by the European Commission and private investors selected by the European Commission. The fund is designed to accelerate European companies developing strategic technologies (e.g., medical technology and biotechnology) with direct equity investments in the range of €100 million and above. It is open to companies located in any EU Member State or countries associated with Pillar III of Horizon Europe.

Six New Sites Have Been Selected To Host European AI Factories. The European High Performance Computing Joint Undertaking — a collaboration between the EU, member states, and private partners — has announced the selection of sites for the next wave of AI factories, set to be deployed in 2026. The factories aim to accelerate innovation by enabling new industrial applications of AI in sectors such as health care. Factories will provide access to AI-optimized high-performance computing resources, experimental platforms to test AI models, and other advanced AI tools to support industry and research. Notably, the AI factory in Spain will feature an experimental platform for developing and testing innovative AI models and applications, as well as promoting collaboration across Europe. This brings the total to 19 AI factories in the EU (see our January 2025 Digest).

MedTech Europe Publishes Recommendations on the European Innovation Act. MedTech Europe, the European trade association for the medical technology industry, has submitted recommendations in response to the European Commission's call for evidence on the upcoming European Innovation Act, expected to come into force in 2026. MedTech Europe's recommendations include (1) streamlining pathways from research to market for medical technologies while ensuring coherence across policies affecting medical technologies; (2) explicitly recognizing medical technology as a strategic sector; and (3) facilitating EU and national funding of medical technologies and introducing a dedicated process for procurement of breakthrough innovations involving medical technologies.

Privacy and Cybersecurity Updates

UK Information Commissioner's Office (ICO) Opens Call for Views on the Guidance for Enforcement of Breaches of Data Protection Legislation. The guidance aims to enhance transparency about the approach taken by the ICO when an organization is suspected of non-compliance with data protection legislation. The guidance covers, for example, how the decision is made to open an investigation, what is to be expected during the investigation, and how the outcome is decided. The consultation is open until January 23, 2026.