Vote of Confidence for Digital Health

Some good news for start-ups in the digital health space – and for employers seeking new ways to engage employees in health improvement by offering a more personalized experience.

FDA Commissioner Scott Gottlieb’s recent post, “Fostering Medical Innovation: A Plan for Digital Health Devices”, offers a preview into his forthcoming guidelines for evaluation of digital health solutions. These guidelines will build upon the direction laid out in the 21st Century Cures Act, passed in 2016, which delineates that it is not within the FDA’s scope to regulate certain clinical administrative support software and low risk mobile app – generally, those used for healthy lifestyle formation and maintenance. Those solutions deemed to be a higher risk to consumers could be offered a simplified premarket review, with emphasis shifted to certifying company processes instead of products – offering greater flexibility to an industry that is both highly iterative and prone to product pivots.

Many of the 400+ startups that Mercer’s LABS team has met with have spoken to the stress involved in ambiguous FDA guidelines around digital health tools, while investors have highlighted the role that a prolonged and vague FDA approval process can have on their investment decisions. We expect Gottlieb’s announcement to assuage some of the trepidation we’ve seen recently in the health tech space due to the volatile state of healthcare reform efforts – encouraging entrepreneurs to take risks they may have otherwise abandoned due to regulatory ambiguity, buoying investors’ bets on new ideas and companies, and offering employers and their employees access to a bevy of new options in health and wellness solutions in the coming years.

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