Congressman Sees Jobs in Health Tech Boom

This article published with permission from The Burrill Report.

Congressman Mike Honda is calling for the formation of a new Office of Wireless Health Technology to be created within the U.S. Food and Drug Administration as part of a package of financial incentives, grants and workforce development programs to advance the health information technology (HIT) sector.

The Silicon Valley Democrat's proposals, initially floated in September, are contained in the new Healthcare Innovation and Marketplace Technologies Act, which was moved to the Committee on Energy and Commerce, as well as the Committees on Ways and Means, and Small Business on December 3.

“Investments, development and adoption of technologies remain stagnant," says Honda. He would like to see more innovation in the health care industry driven through the development of marketplace incentives, challenge grants, and increased workforce retraining.

“Currently, our health care system works against small-to-large startup entrepreneurs with a multitude of barriers to entry,” he says. “There is also a lack of an established marketplace for new technologies and a lack of trained workers to handle the implementation and use of these technologies. This bill begins to bridge these gaps.”

The proposed Office of Wireless Health Technology would be directed to coordinate with other government agencies and industry to make recommendations to the FDA's Commissioner on how to develop and maintain a consistent, reasonable, and predictable regulatory framework on wireless health issues.

In a statement announcing the act, Honda's office said that the new office would not “expand the mandate or responsibilities of the FDA, but rather it will seek to better clarify and simplify existing regulations while providing sorely needed expertise in this important field.”

Where the Office of Wireless Health Technology would fit with the agency's current efforts to shape the world of wireless medical devices and medical apps is unclear. The FDA's Center for Devices and Radiological Health already has an Office of Science and Engineering Laboratories focused on the technical safety aspects of using wireless devices in medical care. The agency is also advancing its Mobile Medical Applications Draft Guidance, first released in July 2011.

The FDA's Center for Devices and Radiological Health issued a draft guidance on Radio Frequency Wireless Technology in January 2007. But despite identifying that guidance as one among many considered for further development in 2012, it has not been updated.

In addition to creating the Office of Wireless Health, the bill would also mandate the creation of a number of programs and advisory structures to guide and fund health innovators. It would establish an mHealth developer support program in the U.S. Department of Health and Human Services to help mobile application developers build their devices in line with current privacy regulations; mandate the creation of a prize program and small innovator challenge grants of up to $75,000 to incentivize risk-taking to attract outside investment; and create a commission of experts to recommend three major areas of the HIT space “that have not seen enough innovation.” It would then create a competitive prize program to attract private investment to the three selected areas.

A low-interest small business loan program created by the bill would provide up to $500,000 to clinics and physician offices for the purchasing of new HIT and services, while a tax incentive program would allow medical care providers to deduct costs, other than electronic health records, related to HIT.

The bill would establish a program of two-year grants to assist medical care providers in retraining their employees into new positions that use HIT at a cost of up to $10 million for each of fiscal years 2014 through 2018.

However, given the scope of the bill, the current budgetary pressures on the FDA, and the existence of similar programs to incentivize innovation, it seems unlikely the bill will succeed.

Copyright 2012 Burrill & Company. For more life sciences news and information, visit www.burrillreport.com.