physicians or expert intermediaries have signed off on their effectiveness,
and so they cannot be sure what the true risks and benefits of the products
Patent law, FDA regulation, and insurance coverage simply do not operate
on most mobile health technologies in the way that they relate to
pharmaceuticals and traditional medical device products. Scholarly literature
has explored ways in which the combination of these areas of regulation
affects incentives to innovate in pharmaceuticals and traditional medical
51 However, relatively little attention has been paid to the ways in
which the lack of each of these innovation policy levers may affect innovation
patterns in the mobile health sphere,
52 a subject to which I now turn.
II. MOBILE HEALTH RESPONSES TO THE INNOVATION POLICY VACUUM
In the mobile health space, traditional innovation policy levers, such as
patent law, FDA regulation, and insurance coverage, have all been turned
“off.” What effect does this pattern have on companies seeking to innovate
in the mobile health space? In a large number of cases, the relative absence
of traditional innovation policy levers in the mobile health space has led
companies to make a choice.
53 Either a company can engage in what scholars
have called “regulatory arbitrage”
54 and construct its business model in a way
that will enable it to evade regulatory scrutiny, or the company can choose to
emulate traditional medical device companies and undergo FDA and insurer
the quality control function of health insurance providers).
51. See, e.g., Rebecca S. Eisenberg, The Shifting Functional Balance of Patents and Drug
Regulation, 19 HEALTH AFF. 119, 120– 21 (2001); Arti K. Rai, The Information Revolution
Reaches Pharmaceuticals: Balancing Innovation Incentives, Cost, and Access in the Post-Genomics Era, 2001 U. ILL. L. REV. 173, 178; Rachel E. Sachs, Innovation Law and Policy:
Preserving the Future of Personalized Medicine, 49 U. C. DAVIS. L. REV. 1881, 1929 (2016).
52. Importantly, the lack of these innovation policy levers is the “normal” case. Most
consumer products (including most apps) are not heavily regulated in the way that medical
technologies are. Viewed from that perspective, drugs and devices are the outliers. But it is
important not to view mobile health apps the same as other software products. Not only are
the potential implications for consumer well-being more like those in the traditional health
technology space, but here companies have the ability to choose between the regulatory
systems, as I will now explore.
53. These two stories are not universal. In fact, it is likely that many small start-up
companies may proceed without detailed consideration of regulatory barriers that may be years
in the future. However, these are two prominent storylines with support from existing
literature and adjacent technologies.
54. Victor Fleischer, Regulatory Arbitrage, 89 TEX. L. REV. 227 (2010); Jody Freeman
& Jim Rossi, Agency Coordination in Shared Regulatory Space, 125 HARV. L. REV. 1131,
1185 (2012); Nicolas P. Terry, Regulatory Disruption and Arbitrage in Healthcare Data
Protection, 17 YALE J. HEALTH POL’Y L. & ETHICS
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2774471 (forthcoming 2017).