This digest covers key virtual and digital health regulatory and public policy developments during April and early May 2024.
You will note that France has set out new pricing rates for innovative digital therapeutic medical devices under the accelerated market access pathway, known as PECAN. While the pathway was set out in February 2023, the lack of reimbursement rates means up-take has been low. The order of April 22, 2024 introduces the new pricing structure, with the maximum amount of financial compensation set at €780 per year, per patient. This is an important step in ensuring digital therapeutic products can be widely available in France while also ensuring that developers can obtain appropriate reimbursement.
Regulatory Updates
EFPIA Statement on the Use of AI in Medicines Under the AI Act. On April 22, 2024, the European Federation of Pharmaceutical Industries and Associations (EFPIA), published a statement on the use of AI in the medicinal product lifecycle in the context of the EU Artificial Intelligence Regulation (AI Act).
EFPIA highlights the potential for AI to transform medicine development, enabling faster, safer, and more effective treatments. However, achieving this requires regulatory frameworks to be agile, globally aligned, and tailored to the pharmaceutical industry's needs.
EFPIA outlines five key considerations for governing AI in medicine development:
- The exception provided in the AI Act for scientific research and development should apply to AI-based development tools used in the research and development of medicines.
- AI uses in medicine development cannot legally qualify as high risk under the AI Act as they do not meet the criteria for high-risk classification under the AI Act.
- The existing legal framework for medicines is sufficiently flexible to create the right foundation to include AI uses in the development of medicines.
- The European Medicine Agency's upcoming guidance on AI in medicine development will complement existing regulatory frameworks, ensuring responsible AI governance. (You can read about the draft in our July 2023 blog post.)
- The ultimate goal for AI governance is to establish fit-for-purpose, risk-based oversight that considers the specific context of AI use in medicine development, balancing innovation with safety and ethical principles. EFPIA expressed its commitment to collaborating with regulatory bodies, patient groups, and other stakeholders to leverage AI's potential while upholding fundamental rights and safety standards.
Publication of the MHRA's Strategic Approach To AI. On April 30, 2024, the Medicines and Healthcare products Regulatory Agency (MHRA) published its strategic approach to the regulation of AI. The publication is in response to the request from the Secretaries of State of the Department for Science, Innovation and Technology and the Department of Health and Social Care (DHSC) dated February 1, 2024, in which the MHRA was asked to provide details about what steps it is taking in accordance with the principles and expectations of the government's pro-innovation approach as set out in the white paper published in 2023.
You can read more in our May 2024 blog post.
Continued Global Collaboration on AI Safety. The UK government continues to lead global efforts in ensuring AI is safe and trustworthy. On April 2, 2024, the UK and U.S. governments announced signing a Memorandum of Understanding whereby the AI Safety Institutes of the two countries will collaborate on technical research in relation to AI safety, develop safety model evaluations, and share guidance for AI safety with other governments on international standards for AI safety testing. On April 12, 2024, the UK and Republic of Korea announced that planning was underway for the next global meeting on the safe development of AI at the AI Seoul Summit on May 21-22, 2024. The AI Seoul Summit follows the AI Safety Summit held in November 2023 at Bletchley Park in the UK. Industry is expected to provide updates on how they are fulfilling commitments made at Bletchley Park to ensure the safety of AI technologies, and the first iteration of the International Scientific Report on Advanced AI Safety is expected to be released. Along with safety, the AI Seoul Summit will also cover how the benefits and opportunities of AI can be shared more fairly and how innovation can be further advanced.
UK Government Seeks To Use AI in the NHS To Improve Patient Care and Efficiency. On April 25, 2024, it was announced that the National Health Service of England (NHS) and the Incubator for Artificial Intelligence (i.AI) signed a partnership to support the use of AI in the NHS. i.AI is a UK government organization made up of technical experts, which was established under the direction of the Prime Minister to progress AI capabilities within government. One of its main focuses is to improve public services through AI applications. The new partnership aims to identify opportunities where AI can improve patient care and the speed of treatment and operational efficiency within the NHS. This will be done through non-clinical AI solutions, rather than through the development of new AI-based medical devices.
Update to the UK Government's Medtech Strategy and an Innovation Classification Framework. On April 9, 2024, the DHSC published a report reflecting on its achievements over the last year towards meeting the goals set out in the medical technology (medtech) strategy launched in February 2023 and the next steps in boosting the adoption of medtech within the NHS. The report is structured into the four stages of the innovation pathway, which the government is seeking to streamline:
- Entry point, noting the launch of the Innovative Devices Access Pathway pilot in September 2023 aimed at bringing innovative technologies to the NHS where there is an unmet medical need (discussed in our September 2023 blog post) and the government's intentions in relation to an international recognition pathway.
- Approvals, noting expanded UK approved body capacity from four to nine and continued work to reform the medical devices regulatory framework in accordance with its roadmap published in January 2024.
- Funding and commercial, noting a £30 million Health Technology Adoption and Acceleration Fund launched in October 2023 to enable the NHS to invest in and implement medtech.
- Adoption, noting that to address health inequalities and variation in the availability of effective medtech across different NHS Trusts, the government has mandated NHS Trusts to submit certain data by March 2024, which will be expanded later in the year.
Also on April 9, 2024, the DHSC published a medical technology innovation classification
framework, which has been developed in consultation with
stakeholders across the medtech sector. This guidance aims to
provide assistance and clarity to industry on how innovation is
described and defined. The overarching definition for a device to
be described as an innovation is: "[the device] should
demonstrate an incremental improvement, be a novel application or
is a novel device that meets an unmet clinical need or provides
improvements upon existing technology or models of care. The device
can be scaled with the end-goal of benefiting the system, patients
and/or care providers." It provides criteria to assess whether
a medical technology is incremental, transformative, or disruptive,
with example case studies, as well as guidance, on how to explain
the innovative aspect of a device compared to what is already
available on the market. Annex A of the framework provides a useful
flowchart to assist industry in classifying their innovation.
MHRA Provides Updates on Regulatory Reform for Medical Device Legislation in the UK. On April 25, 2024, the MHRA published an update on various steps being taken to reform the regulation of medical devices in the UK.
First, a meeting of the new International Medical Device Regulators Forum in March progressed discussions on leveraging the international recognition of assessments of devices made by the competent authorities of countries with robust regulatory regimes to improve patient access. At the meeting, it was agreed that the Artificial Intelligence/Machine Learning-enabled working group, which is co-chaired by the MHRA and FDA, will develop a document on AI lifecycle management. The MHRA will also co-chair a working group focused on updating the documents on clinical evidence for In Vitro Diagnostics (IVDs).
Second, the MHRA has continued to develop its own international recognition framework and published a statement of policy intent on May 21, 2024. To assist, the MHRA has been collaborating with four multinational companies who have products approved by the FDA, but not regulators in the UK or EU. The MHRA has called for smaller companies with products encompassing software as a medical device or IVDs and are interested in accessing the UK market after first launching in another country to come forward. (You can read more in our May 2024 blog post).
Finally, the MHRA notes that it remains on track to meet the milestones set out in its roadmap for the future regulatory framework for medical devices. In keeping with the milestones, the new regulations for post-market surveillance will be brought before Parliament soon, the stakeholder engagement for the sessions for the future core regulations will be held in June and July, and the AI Airlock (the regulatory sandbox for AI medical devices) will be launched in the coming weeks. (This has now been launched, and you can read more in our May 2024 blog post.)
Privacy Updates
European Parliament Formally Adopts Agreement on the EHDS Regulation. On April 24, 2024, the plenary of the European Parliament formally adopted the agreement reached on March 15, 2024 with the European Council on the regulation creating a European Health Data Space (EHDS) Regulation (EHDS Regulation). As we have discussed in previous digests, the EHDS will create a framework that will provide governance and infrastructure for the use of electronic health data. On the same date, the European Commission published a Questions & Answers document on the EHDS Regulation, where it stresses the importance for the industry to use the health data contained in the EHDS to foster innovation that will improve disease prevention, diagnosis, and treatment.
The agreement on the EHDS Regulation now needs to be adopted by the European Council, which is expected to be published in the EU Official Journal in autumn, and the EHDS is expected to become operational in 2028.
New Guidance From the ICO on Transparency in Relation to Health and Social Data. On April 15, 2024, the Information Commissioner's Office (ICO) published new guidance to assist health and social care organizations, as well as private organizations that use health and social care information, be transparent with patients about how and why their personal health information is being used. The guidance sets out what data protection transparency means in relation to Article 5(1) of the UK General Data Protection Regulation and provides a helpful checklist on how to assess if an organization is being transparent. Compliance with the checklist should be reviewed at regular intervals. Practical steps are also set out to assist organizations in the development of effective transparency, for example suggesting ways to demonstrate that the organization is being open and honest, providing a choice to patients on how their data is used, and engaging with patient groups to better understand if the proposals sufficiently address concerns. The guidance also sets out factors to consider in effectively informing patients about steps taken to ensure transparency, for example the directness of the communication, communication methods, and presenting information in an easily accessible manner that avoids "information overload." The guidance supplements other ICO guidance on the principle of transparency and the right to be informed.
Reimbursement Updates
Publication of New Pricing Structure for the Reimbursement of Digital Medical Devices in France. In early 2023, and as discussed in our March 2023 digest, France created an accelerated market access pathway for innovative digital therapeutic medical devices, known as PECAN. Manufacturers can use the PECAN scheme for digital medical devices for therapeutic purposes which are not yet eligible for reimbursement, but which are presumed to be innovative in terms of clinical benefit or progress in the organization of care. Companies, therefore, can use this one-year scheme while finalizing their application for reimbursement under the regular scheme, provided a doctor prescribes the digital medical device to the patient.
Companies eligible to apply for this scheme must:
- Have a valid CE marking
- Be presumed to be innovative and be able to provide data supporting clinical benefits
- Comply with interoperability and security frameworks established by the Digital Health Agency to guarantee the exchange, sharing, security, and confidentiality of patient health data
Following submission of the application, the Digital Health Agency and the French National Authority for Health will assess the application and the relevant decision will be taken.
Up to now, the reimbursement rate for digital technologies (rather than remote monitoring products) has not been set, meaning up-take has been low. The Order of April 22, 2024 introduces the new pricing structure for PECAN, setting out the reimbursement amounts for companies making available digital medical devices for therapeutic purposes. These amounts are:
- An initial lump sum of €435 including tax, per patient, for a period not exceeding three months
- A monthly rate of €38.3 including tax, per patient
- A maximum amount of financial compensation of €780 including tax per year, per patient
This is an important step in ensuring digital therapeutic products can be widely available in France and ensuring developers can obtain reimbursement for these products.
IP Updates
Inadvertent IP Infringement Via Online Targeting to UK Customers. A recent UK Supreme Court judgment (Lifestyle Equities v. Amazon) and a subsequent High Court judgment (Merck v. MSD) have highlighted the potential risk of incidental trademark infringement through online targeting to UK customers. This is relevant to readers of this digest because the provision of virtual health services and the online sales of digital health products could inadvertently be deemed an act of targeting to UK customers and amount to an infringement of trademark rights.
Whether online activities are targeted at the UK needs to be viewed objectively from the perspective of the average consumer of the relevant goods or services who is deemed to be reasonably well-informed and reasonably observant and circumspect. A business "should be treated as having used a mark in the UK if it has itself 'pushed' its business and mark into the UK, not if it has been 'pulled' into the UK by (for example) its customers abroad, even though they may be based in the UK." The inquiry on targeting is highly fact sensitive. The judge's approach in Merck v. MSD shows that targeting should take into account the entirety of a website (or other online media) and the impact it has on the consumer.
In Merck v. MSD, the judge's systematic approach of reviewing evidence relating to each alleged incident of infringement provides helpful guidance. One example of infringing use related to tweets sent by MSD containing "MERCK" in an "MSD" branded environment. Such tweets were considered to convey a message to UK consumers that MSD was entitled to use "MERCK" in connection with its goods and services in the UK.
The decision confirms that use of signs on digital platforms, while not designed exclusively for a UK audience, can still lead to parties falling foul of UK trademark law if the overall message tells consumers the relevant entity is entitled to use the mark in relation to their goods and services, even if used in a promotional capacity.
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