Key Implications of the 21st Century Cures Act for Medical Devices

• The 21st Century Cures Act (“Cures” or the “Act”) significantly impacts FDA’s review and approval of medical devices, and how medical devices are covered and paid for.
• These new authorities give FDA greater flexibility in regulating medical devices, but their ultimate impact will depend on how they are implemented by the agency under a new administration.
• Because the Cures device provisions are more heavily focused on premarket review, expect additional consideration of postmarket device surveillance in next year’s FDA reauthorization process.

This week, the U.S. Senate passed the comprehensive legislative package referred to as the 21st Century Cures Act. The Senate’s passage follows an overwhelming passage by the House of Representatives last week, and the President is expected to sign the legislation into law on December 13th.

The legislation, which follows more than two years of discussion, contains a vast array of changes for the health care system and authorizes, over 10 years, $4.8 billion in funding for research and $1 billion to fight the opioid crisis; it provides an additional $500 million to FDA, although Congress has appropriated only the first year of funding so far. In addition to making significant changes to FDA regulation of medical products, the legislation addresses National Institutes of Health (NIH) research, opioids, mental health, hospitals and medical countermeasures. This client alert focuses on the key Cures provisions affecting medical devices and diagnostics.

Cures creates a priority review program for “breakthrough” devices that is modeled on the breakthrough pathway for drugs.¹ The provision as enacted is available to qualifying devices that will go through the premarket approval (PMA), de novo, or 510(k) pathways. The breakthrough pathway criteria are somewhat broader than the criteria for FDA’s existing Expedited Access Pathway. To qualify, a device must demonstrate that it provides for more effective treatment or diagnosis of a life-threatening or irreversibly debilitating human disease or condition, and meets one of the following criteria: (1) it represents a breakthrough technology; (2) it has no approved or cleared alternative; (3) it offers significant advantages over existing approved or cleared alternatives, including “the potential, compared to existing approved alternatives, to reduce or eliminate the need for hospitalization, improve patient quality of life, facilitate patients’ ability to manage their own care . . . , or establish long-term clinical efficiencies”; or (4) its availability is in the best interest of patients.

FDA will have 60 days to accept or deny a sponsor’s request for designation as a breakthrough device. FDA’s denial of an application constitutes a “significant decision,” which a sponsor may appeal. To facilitate expedient review, FDA must assign a team of staff, adopt an efficient dispute resolution process, provide for interactive and timely communication with the sponsor, collaborate with the sponsor on clinical trial design, and expedite review of manufacturing and quality systems compliance. FDA must publish guidance on implementation of this section within one year of enactment of the Act.

Cures clarifies which types of digital health applications constitute medical devices.² Although the Cures medical software provisions mirror FDA’s current approach in many respects, they appear to depart from FDA policy in several ways. Akin Gump plans to issue a separate alert specifically addressing the Medical Device Software provision.

Under Cures, the following five functions or uses, subject to certain conditions, will not be considered medical devices:

• administrative support of a health care facility, including the processing and maintenance of financial records, claims, billing information, information about patient populations, business analytics, practice and inventory management, analysis of historical claims data to predict future utilization or cost-effectiveness, and population health management
• maintaining or encouraging a healthy lifestyle, provided the function is unrelated to the diagnosis, cure, mitigation, prevention or treatment of a disease or condition
• use as electronic patient records, including patient-provided information, to the extent that the records are intended to transfer, store, convert formats, or display the equivalent of a paper medical chart so long as the records were created, stored, transferred or reviewed by health care professionals or individuals working under their supervision; are part of health information technology certified by the Office of the National Coordinator; and are not intended to interpret or analyze patient records, including medical image data, for the purpose of the diagnosis, cure, mitigation, prevention, or treatment of a disease or condition
• transferring, storing, converting formats, or displaying clinical laboratory test or other device data and results, findings by a health care professional with respect to such data and results, general information about the findings, and general background information about the test or other device, unless the function is intended to interpret or analyze clinical laboratory tests or other device data, results, and findings (note that this provision is not perfectly aligned with FDA’s definition of Medical Device Data Systems)
• (1) displaying, analyzing or printing medical information; (2) supporting or providing recommendations to a health care professional about prevention, diagnosis, or treatment of a disease or condition; and (3) enabling such health care professional to independently review the basis for such recommendations, so long as the function is not intended to acquire, process, or analyze a medical image or signal from an in vitro diagnostic device or a pattern or signal from a signal acquisition system.

For certain of the exempted functions, however, FDA may apply device requirements if the agency determines through notice and comment rulemaking that it is reasonably likely to have serious...