New bill could stifle innovation in digital health

NEWS - eHealthNews.nz editor Rebecca McBeth

Digital health suppliers are concerned that the Therapeutic Products Bill will capture a broad a range of health technologies and new regulations will stifle investment and innovation in the sector.

Industry partners spoken to by eHealthNews support greater regulation of software as a medical device (SaMD), but say the bill needs to provide a much more granular definition of it, rather than leaving this up to the new regulator to determine.

The bill defines SaMD as, “software that meets the definition of a therapeutic product without any associated hardware” and a therapeutic product as, “a product that is intended for use in, on, or in relation to humans for a therapeutic purpose”.

It is also SaMD, if “it is intended to be used to augment a product that is not a therapeutic product by making use of the functions, sensors, or other components of that product; and the product and software together meet the definition of a therapeutic product.”

You’ve read this article for free, but good journalism takes time and resource to produce. Please consider supporting eHealthNews by becoming a member of HiNZ, for just $17 a month.

Software covered by the scheme will be subject to a new regulator and market authorisation regime, which means they would need authorisation before their product can be imported, supplied in, or exported from New Zealand, as well as a robust surveillance and response system for their products.

Ryl Jensen, chief executive of the Digital Health Association, says there has been little consultation with industry on the bill and in its current form it does not serve the digital health sector well, as the definition around SaMD is too broad.

“We support the intent of the bill - to keep New Zealanders safe - but it doesn't follow international best practice around software as a medical device,” she says.

“As it’s currently defined, it could affect quite a number of digital health suppliers across the industry, not just those that have medical devices that require software to run it, and that is of great concern.”

She says industry also has concerns around whether a new regulator would have sufficient skilled staff to deal with SaMD as Medsafe does not currently have that skill set and there is a national and global tech skills shortage.

“We have real concerns about the capability and capacity of the new regulator and the unintended consequences of that being slow and cumbersome, which could lead to reduced productivity and innovation in the sector,” explains Jensen.

Kelvin Gill, quality, regulatory and information security manager at Sysmex NZ, says the draft bill doesn’t contain the required detail to know which products will be classified as SaMD, or the impact of the new regulations for vendors.

Under the draft definition, Sysmex may be classified as a manufacturer, importer and exporter of SaMD, but he hoped NZ would follow other international regulators (including Australia and the EU) who exclude Laboratory Information Systems and Work Area Managers from this classification.

If Sysmex products were classified as SaMD this would increase regulatory overheads and ultimately costs for customers, who are public and private healthcare providers.

Gill says the cost, complexity and lead time to obtain market authorisation for product changes may affect the frequency of updates, with changes being introduced less frequently or not at all.

He argues that regulations and regulatory oversight for SaMD be considered separately from other therapeutic products under the bill, such as providing a software-specific pathway for high priority updates such as bug fixes, to address product quality and safety issues.

Josh Robb, co-founder of Tend, says products such as patient management systems and patient portals have been excluded in similar legislation overseas and it is important to clarify in the bill what software is going to be captured under the new regulations.

“At the moment that’s left entirely up to the new regulator and that will have unintended consequences for health tech businesses looking to build products in New Zealand,” he says.

Limited regulation in this space has led to huge innovation in the digital health sector over the past five years, but uncertainty about regulatory requirements and the increased costs involved would stifle that.

Tend rolled out 32 app releases and 240 backend releases in 2022, which would be impossible to do if each of those needed to be approved by a regulator, Robb says.

Alistair Rumball-Smith, co-founder of Sense Medical, supports oversight of SaMD but says some clinical decision support tools, such as Cortex's dynamic documentation workflows, may fall into a ‘grey zone’ in the proposed new regulations.

He believes that software that applies clinical decision support rules that are transparent to users and configurable by the customer should not automatically fall under regulation, as the software is “merely acting as a conduit of information or engine to visualise the clinically governed rules”.

Rumball-Smith adds that there is a risk of stifling innovation by reducing the ability for new software, that may eventually be regulated, from being piloted ‘in the field’ with appropriate clinical governance.

During a development phase, responsibility should sit with the organisation that is piloting or involved in co-design, and regulation should only kick in when software is made commercially available, he says.

“This bill in its current form risks creating an environment that will add significant cost to businesses, reduce investment in research and development and ultimately decrease the impact of digital tools in improving patient care,” says Rumball-Smith.

The Therapeutic Products Bill is at Select Committee stage, with submissions due by March 5.

To comment on or discuss this news story, go to the eHealthNews category on the HiNZ eHealth Forum

Read more Sector news

Return to eHealthNews.nz home page