Eva von Mühlenen, advisor at Sidley Austin's Life Sciences practice, Tatjana Sachse, head of the international policy practice at Sidley Austin, and Zinovia Chatzidimitriadou, managing associate at Sidley Austin's Life Sciences practice, share an outlook on what lies ahead in the rapidly evolving field of digital health and medical artificial intelligence (AI) in Europe.
There have been tremendous advances in digital health and medical artificial intelligence (AI) which make embedding these systems in healthcare irreversible. Thus, it is not surprising that biopharmaceutical, medtech companies and investors are trying to spot the next opportunity. Growth is being driven by several factors, including an ageing population, an increase in chronic diseases and the growing demand for personalised medicine.
Applications such as mHealth, telehealth, big data and electronic health systems can facilitate and accelerate patient recruitment and retention for clinical trials through remote monitoring tools and wearables and contribute to fast and complex analyses of generated data into meaningful clinical evidence. Telehealth services ensure more people can be diagnosed, monitored, and treated promptly in a more personalised manner. There are also important applications of AI tools in pharmacovigilance and adverse event and signal reporting. Similarly, the rise of digital therapeutics enables both healthcare professionals and patients to better manage health outcomes and minimise hospital visits, thus reducing the overall burden on healthcare systems.
Whilst innovation develops at breakneck pace, national regulators are playing catch-up. Inevitably, outdated — or ill-fitting — regulations and reimbursement strategies can hamper the development of, and patient access to, these novel technologies, notably in the fields of AI, medical devices, data privacy and cybersecurity. This is particularly relevant in the EU, where the European Commission recently proposed a number of legislative measures, including the draft AI Actand the proposed AI Product Liability Directive, that will regulate the use of AI in healthcare. These proposals fail to address how self-learning and continuously evolving algorithms will be regulated in the EU. These gaps mean that developers are left in the dark regarding applicable requirements. Industry stakeholders have also criticised other parts of these proposed measures as unduly burdensome, potentially duplicative of existing requirements and resulting in a potentially negative impact on innovation.
Patients' and healthcare professionals' trust is a key requirement for these systems to take off. Proposed EU laws such as the AI Product Liability and new cybersecurity laws such as the NIS 2 Directive shall enhance the safety of the digital environment and address those concerns to further enable a trustworthy digital health and AI environment. As much of the current landscape is evolving, companies are advised to monitor the developments and try to incorporate these elements into their products at an early stage – while also imposing the same conditions on their value chain partners.
For EU-based companies looking to enter the digital health and medical AI market, it is important to be proactive in adapting to these regulatory changes, often across multiple regulatory frameworks in the medical device healthcare and AI space. This may involve seeking early compliance with the proposed legislative measures or engaging with regulatory bodies to ensure that the products and services are aligned with future regulations. To remain agile, the UK decided to produce evidence standards and flexible industry-specific guidance for AI, but not explicitly legislate on it. This may cause a deviation from EU law and practices and companies are advised to consider this as they adapt their strategies. Against the background of a possible future rapprochement with the EU, it could therefore also be important for Switzerland to be interoperable with developments in the EU. Switzerland is planning to develop a programme to promote an interoperable healthcare system based on a transparent data ecosystem, essentially mirroring the European idea of the European Health Data Space (EHDS). In view of a possible future connection to the European infrastructure, interoperability will be crucial.
An additional major challenge facing the digital health and medical AI sectors is the need for global regulatory and reimbursement strategies that are fit for purpose. Currently, there are significant differences in the way that these technologies are reimbursed across different countries, leading to confusion and uncertainty for companies operating in this space, particularly in the EU, where there is a patchwork of national reimbursement systems. There is an increasing preference for value-based care, under which health technologies are reimbursed based on outcomes, in an evidenced-based way. This will reflect on companies' pricing and business models, which should adapt to reflect the changing nature of the market, including on how to measure outcomes and integrate their offering within the healthcare system.
The need for more harmonised global regulatory and reimbursement frameworks for digital health and medical AI is emerging as an approach that would enable companies to enter EU markets more easily and would also help to ensure that patients have access to the best possible care.
Despite these challenges, the outlook for digital health and medical AI in Europe remains positive. Some key tips for companies wishing to get ahead of the curve include considering:
- What sets a specific digital health/ medical AI tool apart?
- What is the real value it delivers to patients and the healthcare system?
- Is the solution sufficiently usable?
- Is it interoperable, meaning can it be easily integrated into the healthcare system?
- Does the company hold all necessary data to support the value proposition for its product?
- What collaborations might help the development and delivery of the technology?
- What are the standards that apply, and which conformity assessment body is the appropriate one for the relevant assessment of the technology?
Overall, the key to success in the digital health and medical AI market will be the ability to adapt to regulatory changes and to develop business models that are fit for purpose. By doing so, companies will be well positioned to take advantage of the many opportunities that this rapidly evolving market has to offer.