December 15, 2017 Practice Points

Three Emerging Risks and Regulations Affecting Fitness Trackers and Wearable Devices

By Jean Patterson and Elizabeth Monahan

If you have scrolled through Amazon.com recently, you know that more and more companies are developing wearable devices marketed in part to improve users’ health. If one of those companies is your client, you would be wise to stay abreast of the regulations governing the use, marketing, and sale of such devices (and their associated mobile applications) in the United States. To that end, the following is an overview of some key considerations when advising a client who wants to sell a wearable device in the United States:

Is the device a “medical device” regulated by the FDA? In 2016, the United States’ Food and Drug Administration (FDA) issued guidelines relating to general wellness devices, intended, in part, to help companies in the industry determine whether their products must comply with the pre-market review and post-market regulatory requirements for devices under the Federal, Food, Drug and Cosmetic Act. That guidance makes clear that the FDA does not intend to actively regulate low-risk, non-invasive technologies that are intended for general wellness use only (i.e., “general wellness products”). A general wellness product is a product that is intended to either (1) relate to maintaining or encouraging a general state of health or a healthy activity or (2) relate the role of healthy lifestyle with helping to reduce the risk or impact of certain chronic diseases or conditions. Many wearable devices, however, have the capacity to offer health-related features that go beyond promoting “general wellness.” Indeed, wearable devices and the associated applications have drawn increased attention from the medical community, with more and more physicians interested in having patients utilize wearable devices so that the physicians can track the patients’ progress/status for the purpose of treating a disease or condition. Those representing manufacturers of wearable devices that straddle the line between “promoting general wellness” and “treating a disease or condition,” should carefully review the FDA’s guidance, as their clients may be required to comply with the regulations governing medical devices. Counsel should also continue to monitor changes in the FDA’s position with respect to wearable devices, which is constantly evolving.

What are the privacy implications associated with the device? Most fitness trackers gather and store personal health information, giving rise to privacy concerns. The most significant protections for personal health information in the United States derive from the Health Insurance Portability and Accountability Act (HIPAA), which prohibits the use and disclosure of individually identifiable health information created or received by health plans, health care clearinghouses, and healthcare providers (“covered entities”). While HIPAA is not presently understood to apply to manufacturers of wearable devices who interface directly with consumers, HIPAA has been deemed to apply to device manufacturers who interact with covered entities. If a wearable device manufacturer plans to market its device to covered entities, it should conduct a thorough evaluation of how the device handles protected health information to ensure compliance with HIPAA and related privacy regulations.

Does the marketing of the device make it a target for consumer fraud claims? Recently, wearable device manufacturers have become a target of consumer fraud lawsuits. Such suits are often brought as class actions, as opposed to individual lawsuits, making them more of a financial threat to manufacturers. Moreover, many consumer protection statutes provide for a wide range of damages, including attorney fees, treble damages, and statutory penalties. A common type of consumer fraud claims against wearable device manufacturers is the claim that a feature of the device has been misrepresented or overstated. Another type is the claim that the “science” behind a device’s promised benefit is faulty or fraudulent. With the rise in consumer protection lawsuits, companies that manufacture wearable devices should carefully review their marketing and ensure that the substantiation for their products’ claimed benefits can withstand scrutiny.

As wearable devices equipped with sophisticated health-related features become increasingly able to record and store private information and are more readily employed by the medical community, regulations governing such devices are sure to evolve as well. In light of the changing landscape, those involved the industry will be best served by counsel that is ahead of the curve. The issues discussed above are particularly worth flagging for clients before the next Cyber Monday rolls around.

Jean Patterson and Elizabeth Monahan are associates at McCarter & English, LLP, in Newark, New Jersey.


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