Healthcare and Life Sciences

Update Planned for Digital Health Applications – Federal Government's Digital Act

The Federal Ministry of Health (Bundesgesundheitsministerium) recently published the draft Digital Act (Digitalgesetz, “DigiG”) following a lengthy planning process. The act plays a pivotal role in advancing the digitalisation of the healthcare sector – paving the way for electronic medical records and introducing numerous changes for digital health applications. It is a key component of the Federal Ministry of Health’s comprehensive digitalisation strategy, bolstered by – among other things – the Health Data Use Act (Gesundheitsdatennutzungsgesetz, “GDNG”) and the Register Act (Registergesetz, “RegG”), for which a draft bill and key proposals have also been submitted, respectively.

The introduction of the Digital Healthcare Act (Digitale-Versorgungs-Gesetz, “DVG”) in 2019 laid the groundwork for the integration of digital health apps into standard care in Germany. An innovative industry of digital medical device manufacturers has since emerged, with 54 apps currently listed in the official digital health applications directory of the Federal Institute for Drugs and Medical Devices (Bundesinstitut für Arzneimittel und Medizinprodukte, “BfArM”).

The new DigiG will significantly transform the regulatory requirements for “prescription apps”, and this article discusses the most important planned changes for patients and digital health app developers.

Digital health apps on par with other remedies and aids

Digital health apps will be treated the same way as other remedies and aids under the law, with patients now having a right to use these apps.

Digital health apps in higher risk classes

Under current legislation, only digital medical devices in risk class I (according to the classification rules of Annex VIII to the Medical Device Regulation (MDR)) may be prescribed as digital health apps. The Federal Ministry of Health plans to extend the statutory entitlement to such apps to include higher risk classes – specifically those in risk class IIb.

Approval of digital health apps in such risk classes requires proof of a medical benefit, not just proof of a positive effect on medical care.

“Companion apps” not covered

The draft act does, however, limit the scope of what constitutes a digital health app: Approval will not be granted for apps that are used only to manage therapeutic products or are (permanently) linked to very specific medical aids or medicinal products.

Performance-based pricing to become mandatory

The way digital health apps are priced will change, with performance-based criteria playing a greater role. The draft act stipulates, for example, that performance-based price components must comprise at least 20 percent of the remuneration amount. Transitional periods will apply to apps with an existing price agreement.

Expiry of remuneration claim dependent on patient behaviour

Under the proposed legislation, a digital health app maker’s claim to remuneration will lapse if the patient indicates within 14 days of using the app for the first time that he/she will not use it on a permanent basis. Exactly how this is supposed to work will be laid down in a framework agreement, but this new provision is nevertheless likely to cause considerable uncertainty for these manufacturers.

Expansion of ban on referrals and agreements

The existing ban on referrals and agreements will be expanded. Manufacturers of digital health apps will no longer be permitted to enter into legal transactions or agreements with medicinal product or medical aid manufacturers that are likely to restrict a patient’s freedom to choose specific products or aids. The Federal Government sees this as a way of preventing lock-in effects. It will therefore become unlawful to design digital health apps tailored to accompany treatment involving only one particular medicinal product or medical aid. However, since a digital health app is classified as a medical device it must inherently serve a medical function. As a result, distinguishing between “real” and “fake” digital health apps is likely to be challenging in practice

Technical equipment to become available on loan

In some cases digital health app manufacturers will have to allow patients to borrow the technical equipment required to use their apps. By making it possible to borrow expensive accompanying hardware, the Federal Government hopes to reduce costs and increase sustainability. However, it is not yet clear in which cases this will apply.

Digital health apps during pregnancy

The aim is to treat digital health apps the same as any other remedies and aids offered to pregnant women and new mothers. This means that women will have the right to use relevant digital health apps both during and after pregnancy.

Patient authentication

Patients will be able to decide for themselves what level of authentication they want to use to access a digital health app and may even opt for less stringent requirements.

Monitoring digital health apps

The performance of all digital health apps listed in the directory will have to be assessed and the results reported to the BfArM on an ongoing basis. These results will also be published in the directory and – as already mentioned – will form the basis for part of the remuneration paid to digital health app manufacturers.

Next steps

The first round of consultations with German associations began on 13 July 2023, and the Federal Parliament (Bundestag) will presumably deal with the draft after the summer recess. Further changes are to be expected during the legislative process and we will report on these in due course.