November 27, 2022

Volume XII, Number 331

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Food and Drug Administration (FDA) to Cease Active Regulation of Medical Device Data Systems (MDDS) and Other Health IT Devices

The Food and Drug Administration (FDA) took an unusual step on June 20 by issuing new draft guidance that states its intent to not actively regulate certain health IT devices.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 This new draft guidance appears to be the next step in FDA’s overall deregulatory approach for health IT devices and associated software.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The new draft guidance states that FDA intends to exercise enforcement for the following three device types:

  • MDDS subject to 21 C.F.R. § 880.6310
  • Medical image storage devices subject to 21 C.F.R. § 892.2010
  • Medical image communications devices subject to 21 C.F.R. § 892.2020

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Significantly, the new draft guidance has implications for the medical device excise tax.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.

Copyright © 2022 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume IV, Number 175
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About this Author

Elizabeth Bierman, Regulatory and compliance lawyer, Morgan Lewis
Senior Counsel

M. Elizabeth Bierman represents US and international companies in US Food and Drug Administration (FDA) and state regulatory matters that impact the development, manufacturing, and marketing of their products. Beth has more 25 years of experience representing companies that produce a range of products regulated by the FDA, including medical devices, digital health products and mobile medical applications, tissue products, combination products, pharmaceuticals, medical foods, and infant formulas. She also provides guidance on related jurisdictional issues and regulatory...

202-739-5206
Michele L. Buenafe, Morgan Lewis, Regulatory and Compliance Attorney
Partner

Michele L. Buenafe advises clients on regulatory, compliance, and enforcement issues related to the development, manufacturing, marketing, labeling, and advertising of medical devices, human tissue products, pharmaceuticals, controlled substances, listed chemicals, and combination products. She also advises clients on emerging legal issues relating to digital health platforms such as mobile medical apps, clinical decision support software, telemedicine systems, wearable devices, and other health information technology. Michele also serves as a co-leader for the firm’s...

202-739-6326
Frances Babb, Morgan Lewis, Tax Attorney
Associate

Frances Emmeline Babb advises clients on tax planning relating to corporate, partnership, international, and tax-exempt matters. With a focus on tax-exempt organizations, Emmeline advises colleges and universities, museums and cultural organizations, scientific and medical research organizations, private and operating foundations, community and economic development organizations, and many other special-purpose charitable organizations and associations. She counsels clients on a wide variety of tax matters.

215-963-5169
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