The draft guidance also enables some health IT manufacturers to avoid the device tax.
The Food and Drug Administration (FDA) took an unusual step on June 20 by issuing new draft guidance that states its intent to not actively regulate certain health IT devices. FDA announced that it intends to exercise enforcement discretion with respect to medical device data systems (MDDS), medical image storage devices, and medical image communications devices. This new draft guidance appears to be the next step in FDA’s overall deregulatory approach for health IT devices and associated software.
Earlier in 2014, FDA issued a joint report with the Office of the National Coordinator for Health Information Technology (ONC) and the Federal Communications Commission that stated FDA’s intent to regulate only a limited subset of health IT products and recommended that the vast majority of health IT be subject to voluntary standards, best practices, and industry testing coordinated by the ONC. By issuing this new proposed enforcement discretion policy, FDA appears to make good on its promise to limit regulation of health IT products. As described further below, this proposed policy has implications not only for the FDA regulatory obligations of companies that market these types of devices, but also for their medical device excise tax obligations.
The new draft guidance states that FDA intends to exercise enforcement for the following three device types:
All three of these device types are currently regulated as Class I, 510(k) exempt devices. However, under the proposed policy, devices covered by the above regulations would no longer be subject to FDA’s “general controls,” which include requirements for establishment registration, device listing, medical device reporting, reporting of corrections and removals, and the quality system regulation. FDA also proposed to make corresponding edits to its guidance document for mobile medical applications (apps) to clarify that any apps with MDDS functionality are not regulated mobile medical apps.
Significantly, the new draft guidance has implications for the medical device excise tax. Once the guidance is finalized, device manufacturers and software developers with these types of products would no longer be subject to FDA’s device listing requirements and could delist their MDDS and medical image storage and communications devices. Because the device excise tax applies only to devices that are listed with FDA, once delisted, the tax would no longer apply to these devices.
FDA is accepting comments on the new draft guidance for 60 days following publication of the draft guidance’s availability in the Federal Register.
If you have any questions or would like more information on the issues discussed in this update, please contact any of the following Morgan Lewis lawyers: