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Freshfields MedTech Update Q4 2023

As the MedTech industry continues to assess the opportunities and risks of AI in healthcare, regulators around the world are stepping up efforts to regulate the development and use of the technology. On December 8, 2023, the European Union reached a provisional agreement on the AI Act, the world’s first comprehensive AI regulation, potentially creating a blueprint for AI governance that expands to large foundation models underpinning general purpose AI services.

In parallel, innovators and regulatory authorities continue to focus on addressing inequities in the healthcare system and the data used to train AI-based solutions. This quarterly update focuses on recent U.S. regulatory initiatives on digital health and AI technology and efforts to address gender inequities through digital health technologies.

U.S. Executive Order on Safe, Secure and Trustworthy AI

The Biden administration recently launched a federal organization dedicated to evaluating the safety of artificial intelligence. Operating under the National Institute of Standards and Technology (NIST), the AI Safety Institute will develop technical guidance for future regulatory rulemaking and enforcement efforts. This announcement builds on an executive order signed by the Biden administration, which calls for new federal standards with respect to AI safety, security and trustworthiness and seeks to require AI developers to share their safety test results with the U.S. government. The order also prioritizes NIST’s development of standards to ensure that AI systems are safe, secure and trustworthy before public release. Beyond these mandates, the order acknowledges the potential for AI to drive the future of healthcare, particularly in drug discovery, while recognizing the risk that unregulated AI could lead to greater inequality in access to healthcare. These recent initiatives represent the U.S. government’s most expansive attempt at regulating AI technology and follows the efforts of other governments around the world to regulate AI, including the European Union’s AI Act and China’s new regulations for generative AI systems.

Regulatory Updates on AI in Digital Health

The U.S. Food and Drug Administration (FDA) recently announced the formation of a Digital Health Advisory Committee focused on navigating the scientific and technical issues related to digital health technologies, including AI/ML, virtual and augmented reality and remote patient monitoring. This committee will advise the FDA on policies and regulations with respect to these technologies by providing relevant expertise and perspective on the benefits, risks and clinical outcomes associated with their use. Additionally, the US Office of the National Coordinator for Health Information Technology recently finalized its rulemaking titled, “Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing” or the HTI-1 Rule. As previewed in our update for Q2 2023, the HTI-1 Rule establishes first-of-its kind transparency requirements for AI and other predictive algorithms that are part of the Health IT Certification Program. In light of the continued regulatory oversight on AI in digital health, MedTech companies should continue to evaluate their AI compliance practices to ensure that they align with the evolving regulations and guidance.

Equitable Women’s Health Initiatives in Digital Health

The White House recently unveiled a new initiative aimed at furthering research into women’s health. The White House Initiative on Women’s Health Research is expected to deliver recommendations that the Biden administration can follow to improve how research into women’s health is conducted and find ways to maximize investments in that research. A lack of research and data on women’s health has left providers without the tools to adequately diagnose and treat conditions, including cardiovascular disease, autoimmune disorders and mental health conditions in women. A recent Deloitte report found that employed women face as much as $15.4 billion more each year in out-of-pocket costs compared to men, with only a portion of that amount being attributable to maternal care needs. In parallel, MedTech companies have been collaborating to provide technologies aimed at improving women’s health outcomes. In the coming years, we expect MedTech innovators and regulators to continue to work collaboratively to address gender-based and other inequities in the healthcare system.