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Growing Regulatory Concerns For A Niche Health Care Actor

Recent New York-based news relevant to the health care industry bears special significance for one emerging class of participants in that realm, on at least two material fronts.

First, a recent money settlement clearly indicates a newly heightened regulatory focus on so-called “digital health companies,” which most consumers might more familiarly know as online health app developers.

And, second, that settlement reveals a proactive investigatory and negotiating role for a state office that typically stands back in health care regulatory matters.

What has drawn more than a modicum of media attention is the central role played in the settlement by the New York Attorney General’s office, in lieu of an agency like the U.S. Food and Drug Administration or the Federal Trade Commission.

The close involvement of Attorney General Eric Schneiderman clearly signals an expansion — already clearly at work and in an increasingly detailed and widespread way — of regulatory entities that are carving out an oversight, investigatory and enforcement role in the health care sphere.

And it also signals the certainty that digital health care app companies are going to be under relentless scrutiny going forward as they test, market and sell their products.

The AG’s recent settlement targeted three companies in particular, with Schneiderman’s office stating that regulators were legitimately concerned with alleged deficiencies in several areas.

One stated concern stressed companies’ claims regarding the accuracy of products like fetal heart monitors and apps that gauge the cardiovascular performance of individuals strenuously engaged in exercise. The AG’s office claims that testing regimens prior to market rollouts are often insufficient and that important disclaimers are not routinely made to the consuming public.

The settlement was also focused upon privacy concerns, with it being contended that digital health app companies need to be more transparent regarding the extent to which they collect, share and sell user data.

Although the New York settlement involved only three companies, it is certainly a safe bet to assume that industry principles across the niche area of digital health care apps are closely scrutinizing it.

And they know that regulatory oversight of their business realm has just increased, with the potential for much tighter controls if attorneys general from other states across the country begin to follow Schneiderman’s lead.

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