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A BOOMING MARKET. The idea of running software on a mobile device with healthcare uses has been discussed as early as 1996. However, the issue has assumed explosive proportions in recent years, thanks to the spreading of an “app mentality” among health care professionals and consumers, and its potential, given cloud computing, social networks and big data analytics, could be yet to be realized. According to a March 2014 BCC report, this growing trend will be continuing in the next years. App stores offering thousands of medical app also confirm the trend, as about 97,000 mobile health apps in 62 app stores according to a Research2Guidance market report of last year. Hardware manufacturers are certainly not immune to the medical app fervor, and – for example – the new smartphone Gear 2 Neo by Samsung, launched on April 11, 2014 by Samsung in 125 countries, incorporates a heart rate sensor.
ACCORDING TO THE EU COMMISSION, MEDICAL APPS AND E-HEALTH HAVE GREAT POTENTIAL. What is the view of the authorities on this phenomenon? The potential of apps makes them app enthusiasts, the reality of apps worries them. The European Commission believes in medical apps, which can be leveraged in order to eliminate barriers to “smarter, safer, patient-centred health services”. Further, digital health could also be a promising factor to cut Member States’ budget while – in the words of the Commission – “putting patients in the driving seat”. The reality of the app market, however, does not necessarily boost patient empowerment. In fact, the Commission noted that there are substantial risks connected with the way apps are currently marketed: information to consumers is not clear, the trader’s contact details are not easy to find, the use of the term “free” is often misleading.
ENFORCEMENT ACTION BY THE ITALIAN DATA PROTECTION AUTHORITY. On September 10, 2014 the Italian Data Protection Authority has issued a warning regarding data protection risks inherent to medical apps (“Medical Apps: More Transparency Is Needed On Data Use”) promising future sanctions. The Authority found that insufficient information to users prior to installation, as well as the processing of excessive data. The survey conducted by the Italian Data Protection Authority involved a total of 1,200 apps and the findings thus obtained were striking: (i) barely 15% of them provided meaningful privacy notices; and (ii) in 59% of the apps reviewed the Authority found it hard to locate pre-installation privacy notices. The stance taken by the Italian Data Protection Authority echoes the Opinion 02/2013 by The “Article 29 Data Protection Working Party”, which had identified lack of transparency, lack of free informed consent; poor security measures; disregard for the principle of purpose limitation requiring processing of personal data only for specific and legitimate purposes.
CONSENT IN WRITTEN FORM: A REQUIREMENT PECULIAR TO ITALIAN LAW. Italian legislation includes a couple of additional requirements, which could kill the medical app market. We note, however, that they have not been mentioned by the Italian Data Protection Authority in their September 10, 2014 warning so it is unclear whether there is any appetite for enforcing them. In addition to a specific authorization by the Data Protection Authority, typically substituted by a general authorization such as this, Section 23 of the Data Protection Code requires that consent to process sensitive data, such as health data, must be given in written form, a requirement which is not satisfied by a mere “click” on the smartphone, but would only be satisfied by the digital or qualified electronic signature in accordance with Italian legislation. This obstacle could be solved only when (and if) the proposed EU Data Protection Regulation enters into force and repeals the existing Italian Data Protection Code, as consent to process sensitive data shall have to be “freely given, specific, informed and explicit” and the controller shall bear the burden of proof of such consent, but consent in written form would no longer be required.
 “This market is expected to grow to $2.4 billion in 2013 and $21.5 billion in 2018 with a compound annual growth rate (CAGR) of 54.9% over the five-year period from 2013 to 2018”.
 “In Italy, overall savings from the introduction of ICTs in the Health Sector are estimated to be around 11.7% of National health expenditure (i.e., €12.4 billion). Savings from digital prescriptions alone are estimated to be around €2 billion”. European Commission Memo of December 7, 2012 “eHealth Action Plan 2012-2020: Frequently Asked Questions”.
 It should be noted that, while the Commission is a fervent proponent of eHealth (see also the recent Green Paper on mHealth), there are strong limitations to its actions given its lack of competence in healthcare delivery and financing, which is entirely up to Member States. The effectiveness of eHealth solutions in Europe require the commitment of Member States to implement organizational changes which make patient-centric eHealth solutions an integral part of their healthcare systems, a task that each Member State is pursuing with various degrees. A March 24, 2014 press release by the European Commission commenting on two European surveys on the use of eHealth (including Electronic Health Records, Health Information Exchange, Tele-health and Personal Health Records) showed that many critical issues still exist: lack of penetration, lack of interoperability, and lack of regulatory certainty, to name a few.
 Focus of the Italian Antitrust Authority has so far been on game apps, rather than medical apps: it, too, found that apps were misleadingly presented to users as free, while they were not.
Technology often starts in a simple way, perhaps with a simple “click” on an “I AGREE” button on your smartphone. Once the technology has spread, lawyers and authorities start debating what it is and how it fits with the laws.
The following post is the first part of a legal analysis of medical apps attempting to establish what they are under current legislation (Part I), as well as what is wrong with them according to various authorities who have scrutinized them (Part II).
I keep reading and hearing that apps are not regulated and that the European Union stands behind than the United States in that process. Both statements are wrong. Medical apps can be regulated, if they fall within the scope of the definition of “medical device”. The trick is to find out if they do…
It probably takes less time to download a medical app on your smartphone than to determine if it falls under the definition of “medical device”. Where to look for guidance?
THE EU COMMISSION GUIDELINES. In June 2012 the European Commission has issued Guidelines (MEDDEV 2.1/6) in order to attempt to clarify when standalone software is a medical device. A 6-step decision diagram is also provided by the Guidelines as an aid to decide if a medical application is a medical device. If the medical app is indeed a medical device, then a conformity assessment is required and the app must carry the CE marking.
One key element stands out in order to decide whether a medical app is a medical device: its intended use. This has been further emphasized in the Brain Products GmbH case (Case C-219/11) decided by the European Court of Justice regarding an electro-technical system enabling human brain activity to be recorded. The Court stated that “a device used in humans for the investigation of a physiological process falls within the scope of Directive 93/42 only if the intended purpose of that device, defined by its manufacturer, is medical”, while specifying that the fact that the software is used in a medical context is not sufficient to trigger its qualification as “medical device”. Therefore, the intended use of a device is up to the manufacturer, although – as the influential medical device counsel and blogger Erik Vollebregt puts it – “you cannot disclaim an obvious intended purpose as this would amount to a contradictory label and consequently a non-compliant product”.
THE FDA’s VIEW. On September 23, 2013 the United States Food and Drug Administration tackled the same problem and issued a guidance document “to clarify the subset of mobile apps to which the FDA intends to apply its authority”, because while “The FDA encourages the development of mobile medical apps that improve health care and provide consumers and health care professionals with valuable health information.”, however “The FDA also has a public health responsibility to oversee the safety and effectiveness of medical devices – including mobile medical apps.”
FURTHER HELP FROM THE UK. On March 21, 2014, the United Kingdom Medicines and Healthcare Products Regulatory Agency (MHRA) has also issued guidelines to help “healthcare and medical software developers who are unsure of the regulatory requirements for CE marking stand-alone software as a medical device”. The MHRA indicated that software functions that, e.g., analyze, alarm, calculate, control, convert, diagnose, measure, monitor, are likely to lead the app to be considered as a medical device.
REALITY CHECK! The intention of the EU Commission, the FDA and the MHRA to clarify the regulatory framework is commendable and guidelines abound (see also the D4Research guide), but how many mobile medical apps actually bear a CE marking? How many app developers, app stores and app users are even aware of such requirements? I have witnessed awards granted to apps and eHealth projects which showed no awareness of the regulatory aspects. Announcements to “crack down” on illegal apps have been issued (e.g., by the Dutch authorities). What is happening in Italy? While the Ministry of Health is developing its own apps, its general manager Dr. Marletta in December 2013 has announced that the explosion of medical app use is an area of concern, especially with regard to risks and liabilities, which will be monitored by the authority going forward. Actual enforcement action, however, is still to be seen.
THE PROPOSED MEDICAL DEVICE REGULATION: WHAT MAY HAPPEN NEXT. If the Proposal Regulation replacing the Medical Device Directive sees the light, software will be expressly regulated and specific quality requirements will apply concerning the following aspects:
 The very definition of medical device included in Directive 93/42/EEC, as amended by Directive 2007/47/EC, includes software. In fact, “’medical device’ means any instrument, apparatus, appliance, software, material or other article, whether used alone or in combination, together with any accessories, including the software intended by its manufacturer to be used specifically for diagnostic and/or therapeutic purposes and necessary for its proper application, intended by the manufacturer to be used for human beings for the purpose of:
and which does not achieve its principal intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in its function by such means;”.
 An average smartphone user downloads 37 apps, according to the Opinion 02/2013 on apps on smart devices by the Article 29 Data Protection Working Party, page 2.
The Italian Ministry of Health has recently strengthened the requirements to obtain the authorization to manufacture and use advanced therapy medicinal products (“ATMPs” ) which are non-routinely produced. In fact, following the enactment of the Decree of the Ministry of Health of January 16th, 2015, published only last week (the “ATMP Decree”), more control on such drugs’ hospital use is expected. The ATMP Decree does not apply to ATMPs under clinical trial and solely focus on compassionate use of non-routine ATMPs.
THE PREVIOUS REGULATORY SCENARIO. Prior to 2006, the use of gene therapy and cell therapy medicinal products, for which a marketing authorization had not been obtained, was authorized only within clinical trials. In 2006 non-profit manufacturing and compassionate use of gene therapy and somatic cell therapy medicinal products was first allowed.
The 2006 Decree allowed the use of such products on the basis of certain requirements, checked by the Agenzia Italiana del Farmaco, the governmental agency in charge of pharmaceuticals (“AIFA”). Given the lack of therapeutic alternatives in a life threatening condition, the requirements for production and use of gene therapy and cell therapy medicinal products were not especially strict and heavily relied on the patient’s consent and positive feedback by the Ethics Committee, as well as on the self-certification on the existence of the requirements by the doctor responsible for the drugs administering.
THE NEW RULES INTRODUCED. The ATMP Decree was introduced to protect consumers from fraudulent conducts. Even though the Decree does not make specific reference to it, it is widely accepted that the ATMP Decree aims at limiting the proliferation of cases like the famous “Stamina case”, where therapies for treatment of life-threatening diseases have been provided to patients in sheer lack of scientific grounds. AIFA will enforce the new rules by way of on-site inspections that may lead to suspension or revocation of a previously granted authorization to manufacture, as well as to the prohibition to administer the drug. The ATMP Decree can be summarized as follows:
CONCLUSIONS. Manufacturing and use of ATMPs on non-routine basis shall follow objective requirements, to be assessed by governmental entities who are able to appreciate their scientific basis, rather than – as in the past – used under the mere responsibility of physicians and on the basis of self-certified manufacturing facilities. If, on the one hand, it would be advisable that all who need to resort to compassionate use of medicinal products can access medicinal products as quickly as possible, on the other hand it must be ensured that the same people receive adequate protection from deceitful conducts. The Stamina case showed how vulnerable to deception patients who are in a life threatening condition without any available cure can be to false hopes spread by therapies without scientific basis: the recent ATMP Decree attempts to protect them.
 According to Section 2 of Regulation (EC) No. 1394/2007 of the European Parliament and of the Council of 13 November 2007 on advanced therapy medicinal products and amending Directive 2001/83/EC and Regulation (EC) No. 726/2004 ATMPs include gene therapy products, somatic cell therapy products and tissue engineered products.
 The ATMP Decree has been published on the Official Gazette no. 56 of March 9th, 2015 and will become effective fifteen days after publication.
 See Section 1 of Ministerial Decree of March 2, 2004. Such non-routinely manufactured drugs were also excluded by the scope of the Pharma Code (Legislative Decree no. 219 of 2006) which focused on the industrial manufacturing of medicinal products and excluded non-routine drugs from its scope.
 Ministerial Decree n. 25520 of December 5th, 2006.
 According to Ministerial Decree n. 11521 of May 8th, 2013 “compassionate use” or “expanded access” of medicinal products may occur when no suitable alternative is available, in case of life-threatening situations, when serious harm to a patient’s health is potential, or in case of serious diseases with fast progression.
 The “Stamina Method”, created by Prof. Vannoni for the treatment of neurodegenerative diseases, is based on the conversion of mesenchymal stem cells into neurons and apparently lacks any scientific foundation. The method itself was also harshly criticized by Nature, one of the most prestigious scientific journals (http://www.nature.com/news/italian-stem-cell-trial-based-on-flawed-data-1.13329). Prof. Vannoni manufactured ATMPs while completely disregarding GMPs. Prof. Vannoni was criminally charged and prosecuted for organized crime with the purpose of fraud and recently plea bargained.
 Principles and guidelines of GMPs are contained in Commission Directive 2003/94/EC of 8 October 2003 laying down the principles and guidelines of good manufacturing practice in respect of medicinal products for human use and investigational medicinal products for human use.
 The process also includes submittal of request for authorization, along with a report on the ATMP.
On February 16, 2015 the Italian Medicines Agency (“AIFA”) has published the 2015 update to the so called “transparency list” (lista di trasparenza), i.e., a list of generic drugs authorized in Italy, along with their market price.
Following a number of changes in the legislation governing generics in the past few years, the National Health Service currently only reimburses the cost of the less expensive generic on the market. In fact, Section 7 of Law Decree 347/2001 sets forth the medicines having the same active ingredients composition, pharmaceutical form, way of administration, release modalities, number of tablets and dosage, are reimbursed by the National Health Service up to the price of the less expensive product on the market. The transparency list serves as a tool for reimbursement purposes: if the patient chooses to buy a branded product or a more expensive generic, the patient will need to cover the difference in price.
The publication of the transparency list comes shortly after a recent decision of the highest Italian administrative court, which stroke down past practices of AIFA on the reimbursement of new generics. In this case, the generic drug company EG S.p.A. claimed that AIFA issued a marketing authorization for gabapentin (a generic drug approved in a different EU member state) but unduly refused to recognize any reimbursement. The per-tablet dosage of the generic drug was in fact different from the branded product and other generics already included in the transparency list: therefore, according to AIFA, reimbursement was not warranted by Section 7 of Law Decree 347/2001. AIFA also argued that the new dosage, higher than other reimbursed products, entailed risks for the patients’ safety, as they would have to apportion the right dosage themselves (e.g., to split the drug tablets in half). The administrative court stated that such risk was ungrounded and had no impact on the reimbursement of the drug: if at all, it should have prevented AIFA from issuing a marketing authorization in the first place. Furthermore, the court stated that the National Health Service may reimburse a generic even if not included in the transparency list, striking down AIFA’s argument that dosages already reimbursed by the National Health Service sufficiently covered the needs of the patients, as such criterion was not set forth in applicable legislation.
The court decision comes as the latest victory for generics on the Italian market, adding to several regulatory and legislative changes prompted by budged restraints in the past few years, causing generics to continue gaining strength. In the meantime, proposed new legislation on the sale of generics outside of authorized pharmacies is stirring public debate.