Insight
March 11, 2024
Whether it's hospitals, health systems, healthcare technology companies, or consumers benefiting from the proliferation of products and services offered, these are exciting times for advancements in healthcare. In particular, the rapid growth we are seeing in the development of increasingly sophisticated and connected digital devices, platforms and applications makes them available to stakeholders, including innovative new license and contract opportunities. , and the chances of being hired are increasing.
However, when seeking to explore and leverage these technologies through contracts and licensing, organizations face significant intellectual property (IP) issues, from procurement, integration, and new regulatory challenges to technologies such as artificial intelligence. Leading up to evolving impacts, several important considerations should be kept in mind. Intelligence (AI).
contract environment
When evaluating contract and licensing opportunities, understanding and evaluating the players, including their market position and the myriad deal structures available, should be the first consideration. The digital health market is an innovative one, constantly attracting new players as industries, products, and services converge.
These companies are culturally different, with high-tech companies and startups more tolerant of quick action, while traditional healthcare companies are accustomed to operating at a more measured pace in a regulatory environment where outcomes must be predicted. I am. Furthermore, research-driven organizations differ in that some are profit-oriented while others are research- and results-oriented.
The types of agreements available range from joint ventures and licensing agreements to data sharing and grant agreements.
Regulatory considerations
When contracting in the digital health space, it is important to keep in mind certain U.S. Food and Drug Administration (FDA) regulatory considerations. These include determining whether the digital health solution being contracted for is regulated by the FDA. The FDA has long regulated digital health technologies and solutions, which fall within the scope of its medical device authority. Digital health products may be subject to FDA regulation if they meet FDA's definition of a medical device or medical device component or accessory.
Other notable considerations include how the contracting parties will allocate responsibility and control for the determined regulatory strategy and how the costs of regulatory obligations will be allocated among the contracting or licensing entities. It is included.
Questions about intellectual property
When contracting to develop or operate a digital health solution, as with any development project, parties need to have a thorough understanding of intellectual property ownership and licensing rates, but this is especially important for these types of platforms.
Key issues include what will happen to intellectual property rights and owner responsibilities going forward, who will discuss what, and who will have the right to use the platform going forward. Additional questions include whether the platform leverages off-the-shelf or existing software, or is built specifically for a particular customer. Another issue to consider is whether there will be one party more involved and responsible for the development effort, or whether it will be a joint effort.
AI and privacy issues
The development of AI requires access to vast amounts of health information that contributes to medical vocabulary and grammar, technology that understands the structure and meaning of electronic medical records and claims data.
There are two ways to de-identify your protected health information: safe harbor and expert determination. The safe harbor method removes 18 specific identifiers. The expert judgment method is a method in which experts are asked to give their opinion that the risk of identifying an individual is extremely low. If the data is anonymized, it is not subject to his HIPAA restrictions, such as minimum standards and prohibitions on the sale of protected health information (PHI).
However, anonymization does not necessarily solve all regulatory and practical issues, as even if the data is properly anonymized, it may be completely useless for AI training. For unstructured health data, it can be difficult to ensure that all 18 identifiers are redacted. While some targeted companies may develop their own AI tools, most may rely on vendors to upgrade existing products and services for AI or introduce new AI tools. Highly likely, that vendor will include services related to financial reporting, compliance checks, and fraud prevention.
In a covered entity-business partner relationship, the covered entity has final control over how the business partner uses and discloses PHI, at least to the extent that the business partner has actual knowledge of what the business partner is doing. responsibility. Fundamentally, AI raises many new privacy issues and requires new layers of due diligence by covered entities with which they do business using AI.
If you are a vendor, it is important to know whether you or your subcontractors are using AI tools in connection with services provided to your company. When using AI tools, how to oversee, monitor, and evaluate the performance of the tools, whether the tools make algorithmic decisions, and how to prevent unlawful discrimination, among other important questions. You need to be able to determine factors such as:
Data and digital health contracts
When it comes to data subject to contracts and license agreements, careful analysis must be applied to ensure not only its protection, but also its proper management and optimal use for its respective purposes. At a minimum, the analysis should ask (1) what data each party is sharing, (2) how the data is collected or generated, and (3) how the data is transferred. there is. (4) How the data will or will not be used. It is also important to consider how the data will affect the model and who will have access to the data.
When it comes to warranties, they align with the risks, priorities, and concerns associated with the planned use of the data in question. You need to know that the other party has the right to provide the data, that you have the right to use it, that the data is accurate, and that they will comply with the law when using the data. It is important to remember that even if data is provided for free, it is not without risks.
Suspension and termination of contract
Suspension rights are important to vendors or providers in a variety of cases, including non-payment, security issues, destructive or unauthorized use of the Service, or use of the Service in violation of the law or the rights of third parties.
When considering a suspension, the vendor or provider must be able to identify the trigger. At whose discretion is suspension carried out? Whether and how much notice is required about the suspension. its range. When access or service will be restored. If applicable, the Customer has the right to request the Vendor to suspend the Service.
Vendors/providers are encouraged to determine in advance what type of termination assistance services will be required upon termination or expiration of the contract. Relevant considerations should include everything from data retrieval to right-to-life to ongoing patient care.
