"The FDA sits at one of the most, if not the most, critical junctures in terms of modulating the burgeoning category of digital medicine," said Malay Gandhi, managing director of Rock Health, a health-focused venture capital firm in San Francisco.
A pressing question is whether the FDA and other agencies have the resources and staff to handle oversight of the fast-moving industry, Gandhi said. The FDA's annual budget of about $4.5 billion is a quarter of the $18 billion Apple generated in profit in its most recent quarter.
While the FDA oversees devices and applications, other federal agencies also have taken an interest in how these products interact with people's lives, including whether they do what they're purported to do or pose a risk to privacy.
Some products raised flags with regulators after they've reached the market. In February, the Federal Trade Commission cracked down on some smartphone apps for dubiously claiming to diagnose melanoma based on an uploaded picture. Meanwhile, the U.S. Health and Human Services Office of Civil Rights is responsible for oversight of the security of patient-health data collected by electronic devices, a separate issue that is being closely watched by privacy advocates.
"I worry that there are going to be companies that are skirting the rules," Gandhi said. "We have to see the enforcement, otherwise it creates a very uneven playing field between companies that are acting ethically and those that aren't."
Patel said Apple and Google Inc. and other corporations should play a role in screening applications to be sure health-software developers aren't over-promising the benefits of their products. Both companies have visited FDA headquarters in Maryland to discuss their health initiatives, he said.
Representatives for Cupertino, California-based Apple and Mountain View, California-based Google declined to comment.
A key part of Patel's job is improving his relationship with Silicon Valley, because there's a misunderstanding in the technology industry that the FDA's approach is over-burdensome and that it's out to impede innovation, he said. The most oft-cited example is when the agency went after the genetic-testing company 23andMe Inc. for selling health-analysis reports that give customers a clue of what risks they may face in the future based on their DNA profile.
"The FDA isn't built to handle new categories" such as wearable devices, smartphone applications and other emerging technologies, said Derek Newell, chief executive officer of health-care startup Jiff Inc., who previously ran a medical-devices company. The agency plays a vital role, but it can take time to catch up, he said.
The agency has issued several guidelines explaining when it intends to take a closer look at wearable devices and smartphone applications. The FDA's concerns are focused on gadgets and software that try to mimic the function of a medical device — not features that simply track steps or heart rate, Patel said. A guiding question is what harm might be done to a person if a product fails.
"We are focusing only on the higher end of technology," Patel said. "What are benefits to public health against the risks to public health? We always try to balance that."
Still, Bob Kocher, who was on the National Economic Council as special assistant to the president on health care and economic policy, said startups he meets with invariably list FDA regulation as one of the main risks to business even when such scrutiny is unlikely.
"It's a perception," said Kocher, who is now a a venture capitalist at Venrock.
Patel is aware of the disconnect. In meetings with Silicon Valley companies it can seem like the two sides are "speaking different languages," he said. To help ease the strain, he said the agency is looking to hire a new senior staff member to help improve relations with technology companies.
The FDA's guidelines on regulating mobile applications, released in February, leave fitness-tracking and other wellness-related products largely free from scrutiny, while technology used for diagnosis, treatment and prevention will get a closer look. A lot depends on how the device is marketed, Patel said. If a company is promoting a product to assist doctors in making medical decisions, it will require more oversight, he said. In January, the FDA approved a glucose-monitoring iPhone app for the first time.
The FDA will keep a close eye on emerging technologies that aim to diagnose illnesses or offer recommendations for treatment, Patel said. Apple CEO Tim Cook said on CNBC this month that devices and services such as Apple Watch and the company's HealthKit system may be able to help pinpoint some diseases and cancers in the next several decades.
"We have to be confident in what we are getting," Patel said. "The trajectory is there and all signals are headed that way, but by the same token the research and science should get us that confidence. It boils down to will it work or not."
Patel said that as more health-related products get into to the hands of consumers, the FDA's oversight responsibilities will become increasingly critical.
"The FDA has a role to play for providing patients and consumers a level of confidence that they can use it," he said.
