TGA announces major changes to regulation of software-based medical devices

The Therapeutic Goods Administration (TGA) has announced major changes to how software-based medical devices will be regulated under the Therapeutic Goods Act 1989 (Cth) (Therapeutic Goods Act). 

There are three types of software-based medical devices affected by the changes: 

1. Devices referred to as ‘programmed or programmable medical devices’.
   
   
2. Software that is a medical device.
   
   
3. Clinical decision support software (CDSS).

The changes will commence on 25 February 2021 and include:

• the exclusion and exemption of certain software-based medical devices from regulation under the medical device regime under the Therapeutic Goods Act;
  
  
• the introduction of new classification rules for software-based medical devices (these will impact both existing entries on the Australian Register of Therapeutic Goods (ARTG) and new entries for software-based medical devices); and
  
  
• the amendment of existing essential principles, and the introduction of new essential principles, for software-based medical devices.

In addition to changing how software-based medical devices will be regulated going forward, the changes will have an immediate impact on software-based medical devices already entered on the ARTG and may require sponsors and manufacturers to take immediate steps. The TGA has also issued guidance about the impending changes. 

In this article, we provide a brief overview of how software-based medical devices are regulated in Australia, a summary of the key changes, and the suggested next steps for sponsors and manufacturers.

Background

The Therapeutic Goods Act aims to ensure that all medicines, biologicals and medical devices supplied in Australia are safe and achieve their intended therapeutic purpose. Regulated goods must comply with strict requirements, including being registered on the ARTG, complying with advertising conditions, and being subject to appropriate oversight with respect to safety and performance.

A software-based product can become regulated under the Therapeutic Goods Act as a ‘medical device’. A medical device is ‘any instrument, apparatus, appliance, software, implant, reagent, material or other article’ which is intended to be used for a therapeutic purpose (including to diagnose, prevent, monitor or treat a disease, injury or disability), but which does not achieve its principal intended action by pharmacological, immunological or metabolic means.[1]

This definition can lead to a broad range of devices becoming subject to the Therapeutic Goods Act, including low risk ‘lifestyle’ or ‘consumer’ products, mobile apps and software. Given this, stakeholders in the medtech and digital health sectors have for some time been calling for an overhaul of the Australian medical device regulations to software-based medical devices.

Exclusions and exemptions from the Therapeutic Goods Act

The major change to be introduced is the ‘exclusion’ or ‘exemption’ of certain software-based medical devices from the scope of the Therapeutic Goods Act. ‘Exclusion’ means that the device is completely unregulated by the TGA, whereas ‘exemption’ means that, while registration of the device on the ARTG is not required, the TGA will retain some oversight for advertising, adverse events, and notification. 

This change is intended to align Australia’s regulatory framework for software-based medical devices with other international regulatory regimes which reduce the regulatory burden for suppliers of technology which pose no significant risk to safety

The key exclusions and exemptions are:

1. Excluded medical devices

The Therapeutic Goods (Excluded Goods) Amendment (Software-based Products) Determination 2021 (Cth) sets out the types of software-based medical devices (including some non-invasive hardware) which are now excluded from regulation (if they meet additional criteria set out in the determination). These include:

• Consumer health products, including certain:
  
  
  • self-management products – software used by a consumer to self-manage a non-serious disease or condition (e.g. eczema);
    
    
  • general health and wellness products – software (including if used in combination with non-invasive hardware) used by a consumer to promote or facilitate general health or wellness by monitoring the consumer’s movement, sleep, heart rate / rhythm, temperature, blood pressure or oxygen saturation (amongst other physical properties);
    
    
  • behavioural change or coaching software – software used by a consumer to improve general health or wellness such as weight, exercise, sun exposure or dietary intake; and
    
    
  • digital mental health tools – i.e. software that is based on established clinical practice guidelines (which are referenced and displayed in the software).
    
    
• Enabling technology intended to support telehealth, remote diagnosis, healthcare or dispensing.
  
  
• Digitisation technology for the digitisation of paper based or other published clinical rules or data (including simple dose calculators and Electronic Patient Records).
  
  
• Population based analytics not intended to be used for clinical cases for individuals.
  
  
• Laboratory information management systems that seek to automate workflows, integrate instruments, manage orders and samples and other associated information.

Although a software-based medical device may not be regulated by the TGA, it must still comply with other applicable regulatory requirements (e.g. product safety requirements and consumer guarantees under the Australian Consumer Law).

For devices already entered on the ARTG, sponsors and manufacturers should consider whether their device remains subject to the Therapeutic Goods Act. Developers of new software-based medical devices should consider whether the device falls within one of the exclusions (or, if not, whether there is sufficient value in modifying the device to avoid being regulated by the TGA).

2. Exempt CDSS medical devices

The TGA has also introduced an exemption for CDSS.[2] Under this exemption, CDSS will be ‘exempt’ (subject to certain conditions) if:

• it is intended by its manufacturer for the sole purpose of providing or supporting a recommendation to a health professional about prevention, diagnosis, curing or alleviating a disease, ailment, defect or injury; and
  
  
• it is not intended by its manufacturer to directly process or analyse a medical image or a signal from another medical device; and
  
  
• it is not intended by its manufacturer to replace the clinical judgement of a health care professional to make a clinical diagnosis or treatment decision regarding an individual patient.

The conditions the CDSS must comply with in order to be exempt include:

• from 25 February 2021, the sponsor must notify the TGA about any supply or importation of the device within 20 working days of the importation or supply;[3]
  
  
• the device must comply with the essential principles;
  
  
• the manufacturer must apply the appropriate conformity assessment procedures to the device (and provide evidence of this to the TGA on request); and
  
  
• the manufacturer or sponsor must notify the TGA of any adverse events.

The TGA is expected to provide further details on this exemption in guidance that will be issued in the coming weeks.

New classifications for software-based medical devices

The second major amendment to the Therapeutic Goods Act is the introduction of new classification rules for software-based medical devices. These changes are significant because they will affect sponsors and manufacturers of goods already entered on the ARTG as well as future ARTG entry applications.

At a high-level, medical devices are classified into one of several ‘classes’ depending on their risk to health and safety. The classification impacts the level of regulatory scrutiny applied to the device, including the minimum ‘conformity assessment procedures’ that must be applied by its manufacturer.

The changes to the Therapeutic Goods Act will modernise how software-based medical devices (i.e. ‘programmed or programmable medical devices’ or ‘software’) are classified. The classification will vary depending on a number of factors, including:

1. Whether the software-based medical device is intended to be used to:
   
   
   • diagnose or screen for a disease or medical condition;
     
     
   • monitor the state or progression of a disease or condition;
     
     
   • specify or recommend a treatment or intervention; or
     
     
   • provide therapy via the provision of information.
     
     
2. The severity of the disease or condition the software-based medical device is intended to be used to diagnose, monitor or treat.
   
   
3. Whether the software-based medical device itself provides information to an individual or whether the information from the device will be provided to a health professional who will diagnose, monitor or treat the disease.

A detailed overview of how these classification rules apply is set out in draft guidance issued by the TGA available here. For sponsors and manufacturers of software-based medical devices already entered on the ARTG, these classification rules may result in an already registered device being moved into a higher or lower risk class.

Devices that move to a lower risk class will not be impacted, however devices that move to a higher risk category can only continue being supplied in Australia after 25 August 2021 if the sponsor:

• notifies the TGA that the device will be impacted by the change in classification rules before 25 August 2021 (or two months after the start date of the ARTG entry);
  
  
• obtains additional conformity assessment evidence as required for the relevant risk class; and
  
  
• before 1 November 2024, applies for the device to be entered on the ARTG under the new classification.

Sponsors who do not notify the TGA before 25 August 2021 must cease supplying the device in Australia from 25 August 2021 until they obtain re-entry on the ARTG.

This new classification criteria should cause sponsors and manufacturers to give thought to the way in which their devices are marketed and distributed, and ask themselves, for example:

• What is the intended purpose of the device and how is it described in marketing materials and instructions for use?
  
  
• What are the distribution channels for the device and are there any contractual restrictions on other channels (e.g. is the device only for sale to relevant health professionals or can it be purchased and used by anyone)?

Amendments to the Essential Principles

The final amendment to the Therapeutic Goods Act relates to the ‘Essential Principles’, which outline general standards which a medical device must adhere to (including those relating to safety, construction and design). In order to supply a medical device in Australia, a sponsor must be able to show that the device meets the applicable Essential Principles.

The following Essential Principles are being amended / introduced:

1. Essential Principle 12.1 – being amended to provide greater clarity on the requirements for cyber security, the management of data and information, and development, production and maintenance.
   
   
2. Essential Principle 13.2(3) – to allow for information about the device to be provided electronically rather than on a leaflet (in certain circumstances).
   
   
3. Essential Principle 13B – a new principle being introduced to require the current version and build number for the software to be made accessible and identifiable to users of software-based medical devices.

There are no transitional arrangements for compliance with the updated Essential Principles 12.1 and 13.2(3) because, in the TGA’s view, the changes clarify existing requirements. For devices already entered on the ARTG, there will be a transition period until 1 November 2024 to meet Essential Principle 13B. New entries must meet this Essential Principle from 25 February 2021.

Next steps

Given the significance of these changes, sponsors and manufacturers should promptly consider the following in relation to their software-based medical devices:

1. Is it subject to an ‘exclusion’ set out in the Therapeutic Goods (Excluded Goods) Amendment (Software-based Products) Determination 2021 (Cth)? If yes, then it may not need to be entered on the ARTG and may be excluded from regulation by the TGA.
   
   
2. Is it ‘exempt’ from entry on the ARTG? The parameters for this exemption will be clearer once the TGA releases its guidance on CDSS.
   
   
3. Will it move to a higher classification under the new classification rules? If yes, sponsors and manufacturers (as applicable) must:
   
   
   • notify the TGA about the change in classification by 25 August 2021;
     
     
   • begin to obtain appropriate evidence of conformity assessment (this may require sponsors and manufacturers to revisit their contract to ensure there are appropriate mechanisms to request and obtain conformity assessment evidence); and
     
     
   • submit a new application for entry on the ARTG for the device before 1 November 2024.
     
     
4. Does it comply with the amended Essential Principles 12.1 and 13.2(b)? In most cases the device will likely meet these requirements but this should be confirmed.
   
   
5. Does it comply with the new Essential Principle 13B? For devices already entered on the ARTG, there will be a transition period until 1 November 2024 to meet this Essential Principle. New entries must meet this Essential Principle from 25 February 2021.

Please contact a member of our team if you would like to discuss the proposed changes.