When software delivers a therapeutic benefit: regulation of digital therapeutics

31 March 2021
Kelly Griffiths, Partner, Melbourne Dudley Kneller, Partner, Melbourne

Digital therapeutics are defined as evidence-based therapeutic interventions that are driven by software programs to prevent, manage or treat a medical disorder or disease. As medical technological innovation continues at pace, more software applications and devices are under development to inform, drive or replace clinical decisions or directly provide therapy to a patient.

The Therapeutic Goods Administration (TGA) regulates software-based medical devices, which includes digital therapeutics, or software that functions as a medical device in its own right. The TGA plays an important role to ensure that therapeutic products supplied to Australians are safe and effective. This is an independent evaluation that considers all scientific and clinical evidence available, giving consumers the confidence to know that a product approved by the regulator has undergone a thorough assessment of both its benefits and risks.

Throughout 2019 and 2020, the TGA undertook a series of consultations with stakeholders, including other global medical device regulators, leading to amendments to the Therapeutic Goods (Medical Devices) Regulations 2002 (Cth) to clarify the regulation of software-based medical devices.

These changes apply from 25 February 2021 and include:

  • clarifying what are regulated software products;
  • introducing new classification rules; and
  • providing updates to the essential principles to more clearly express the requirements for software-based medical devices.

What are regulated software products?

The clarification of what products fall within the scope of software-based products that are regulated as medical devices is a welcome move to ensure industry is not subject to unnecessary regulatory oversight.

Software products are regulated as medical devices if they meet the definition contained in section 41BD of the Therapeutic Goods Act 1989 (Cth). Examples of software that meet this definition may include:

  • smart phone apps that calculate insulin doses based on a patient’s blood glucose levels;
  • software that analyses skin to screen for melanoma; and
  • software that uses information about a patient to make a diagnosis.

From 25 February 2021, certain software-based medical devices will be carved out (either via an exemption or exclusion) from the scope of TGA regulation. These carve outs operate as follows:

  • Excluded software is not considered to be a medical device and is not regulated by the TGA.
  • Exempted software is considered to be a medical device, but is not subject to all regulatory obligations and is not required to be registered. The TGA retains some oversight for advertising, adverse events and notifications.

The exclusions and exemptions are aligned with international regulatory frameworks where appropriate, where there is no significant risk to patient safety or where regulation would duplicate existing appropriate system oversight.

Software is excluded if it meets the criteria in the Therapeutic Goods (Excluded Goods) Amendment (Software-based Products) Determination 2021. The types of excluded products include:

  • Consumer health products – software intended for self-management of an existing disease or condition that is not serious (without providing specific treatment or treatment suggestions), health and wellness products or behavioural change or coaching software intended to be used to improve general health and wellness.
  • Enabling technology – such as apps to enable Telehealth appointments, E-prescribing, etc.
  • Digitisation – of paper based or other published clinical rules or data including simple dose.
  • Population based analytics – data analytics that are for the collection and analysis of class, group or population data that are not intended to be used for clinical use cases for individuals.
  • Laboratory Information Management Systems – these systems include pathology and radiology use cases and typically allow laboratories to automate workflows, integrate instruments, manage orders and samples and associated information.

A software-based medical device is exempt if it meets the criteria in Part 2 of Schedule 4 of the Regulations. An exemption has been introduced for some clinical decision support software. If an exemption applies, the sponsor must still notify the TGA of the exempt software, but it does not need to be registered. Sponsors of exempt devices must ensure the devices meet the relevant essential principles for safety and performance of medical devices. The essential principles describe the fundamental design and manufacturing legislative requirements. The TGA can still take regulatory action such as a recall or issuing a hazard alert if there is a problem with an exempt product.

New Classification Rules

All new applications will need to meet the new classification rules from 25 February 2021, with a transition period ending 1 November 2024. If the regulatory changes result in the up-classification of a software based medical device, transition arrangements apply to allow sponsors to continue to supply the device whilst the application to amend the classification is made.

Guidance is available for the new classification rules for software-based medical devices that:

  • provide a diagnosis or screens for a disease or condition;
  • monitor the state or progression of a disease or condition, or the parameters of a person with a disease or condition;
  • specify or recommend a treatment or intervention; or
  • provide therapy through the provision of information.

Changes to the Essential Principles

The changes to the essential principles are intended to clarify the application of the principles to software to enable sponsors to identify their compliance obligations with greater certainty. These amendments include requirements around cybersecurity, the management of data and information and requirements relating to development, production and maintenance.

Is my software a medical device?

As medical technology continues to evolve, some organisations may discover that products under development may fall within the oversight of the TGA. Any developer of software in the healthcare sector should be mindful of these changes and undertake an assessment as to whether their products may fall within the oversight of the TGA.

The Apple Watch Series 4, 5 and 6 allow users in certain jurisdictions to take an electrocardiogram or ECG with a specific App. An ECG is a test that records the timing and strength of the electrical signals that make the heart beat. This functionality is a great example of the move from traditional fitness products allowing users to track fitness activity to medical diagnosis products. Unfortunately the functionality has not been made available in Australia yet, although Apple is no doubt weighing up whether to seek approval under the new classification rules.

What do I need to do today?

If you currently have a software-based medical device listed on the Australian Register of Therapeutic Goods, you should review your registration to determine whether you need to utilise the transition arrangements regarding the re-classification of products under the new classification rules.

For software developers and suppliers operating in the healthcare space, now is the time to review products under development to determine whether those innovations may fall within the regulatory oversight of the TGA to ensure compliance.


Authored by:

Kelly Griffiths, Partner
Dudley Kneller, Partner

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

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