Should medical mobile apps be treated as medical devices and taxed?

Health Subcommittee members of the House Committee of Energy and Commerce (CEC) listened Wednesday as a group of healthcare professionals weighed-in on potential regulations and taxes of medical mobile applications (apps) during the “Health Information Technologies” hearing.

The five professionals, ranging from doctors to health organization leaders, testified about the benefits of medical apps and whether they should be considered medical devices and regulated by the FDA as such.

"There must be a role for the FDA to determine what's safe and effective,"

Congressman Frank Pallone (D-New Jersey) said during the hearing. "The reality is, the future of mobile health is very bright."

The witnesses urged that there is a difference between medical devices and medical apps, and, if there are to be FDA regulations on medical apps, it must be done carefully to avoid overregulation.

"We need a new regulatory framework that is risk-based and specific to health information technologies," said Jacqueline Mitus, MD, McKesson Health Solutions Senior Vice President of Clinical Development and Strategy. "Health IT doesn't replace physician judgment, but rather provides guidance and support."

If medical apps are regulated as medical devices, they could be subject to a 2.3% medical device excise tax, as outlined in the Affordable Care Act.

The FDA stated its intent to regulate apps as medical devices under the Federal Food, Drug and Cosmetic Act when it issued a draft guidance in July 2011.

If the FDA regulates medical apps as medical devices, smartphones and tablets could fall under that umbrella, which could limit innovation and may have tax implications, according to a CEC memo.

"We're worried that there's a large grey area of health IT that could be subject to regulation," Dr. Mitus said during the hearing.

The Oversight and Investigations subcommittee is scheduled to meet with the FDA and the Department of Health and Human Services during a hearing about their perspectives on innovation and regulation March 21.

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