FTC Action Risks Stifling Innovation, Health App Inventor Says

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By Michael D. Williamson

Feb. 24 — Federal enforcement action against the makers of a mobile app that claims to improve users' vision will have a chilling effect on scientists hoping to commercialize their research, the app's inventor told Bloomberg BNA Feb. 24.

In particular, the inventor said the type of scientific information the Federal Trade Commission is requiring the app maker to possess to make health claims about the product isn't the best standard for the app.

The FTC final order says “competent and reliable scientific evidence shall consist of human clinical testing of the Covered Product or Service that is sufficient in quality and quantity, based on standards generally accepted by experts in the relevant field, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate” representations about the product.

Separately, a health-care attorney said the FTC's order (Docket No. C-4567) against Carrot Neurotechnology Inc., the developer of the Ultimeyes app for mobile phones, also indicates the FTC, not the Food and Drug Administration, will take the enforcement lead with regard to mobile health apps.

Carrot Neurotechnology made claims its Ultimeyes apps can improve a user's vision, the FTC said in a Feb. 23 statement. The final order required the company and its co-owners to stop making that claim.

The federal government's regulation of mobile health apps is nuanced. A 2013 guidance signaled to many software developers that the FDA wouldn't regulate most mobile medical applications. However, that guidance specified the FDA reserved the authority to regulate those products that meet the definition of a medical device and pose significant risks to patients .

In addition, a January 2015 draft guidance outlined the FDA's plans to exercise enforcement discretion for general wellness devices, such as fitness and sleep trackers, which are sometimes apps on a user's mobile phone .

Ultimeyes remains available for sale, the app's inventor and Carrot Neurotechnology co-owner, Aaron Seitz, told Bloomberg BNA.

Seitz, who is a professor of psychology at the University of California Riverside, developed the app to improve public health and not to turn a profit, he said. Adam Goldberg, Carrot Neurotechnology's other owner, and Seitz must pay the federal government $150,000, according to the order. The company is based in Calabasas, Calif.

Attorney on FTC, FDA Roles

The FTC's action against Ultimeyes seems to be the “new normal,” for government enforcement against app developers, Bradley Merrill Thompson, a Washington-based life sciences attorney with Epstein Becker & Green P.C., told Bloomberg BNA.

Under the tacit agreement between the two agencies, Thompson explained the FTC will use its authority to ensure app makers aren't making false claims about their products.

“In some ways, this makes political sense because it gets FDA out of the hot seat of going after small entrepreneurial app developers,” Thompson told Bloomberg BNA. He said rather than requiring premarket approval from the FDA, the FTC “uses its enforcement tools to go after what at least they consider to be shysters.”

This enforcement dynamic, however, may have implications for the FDA approval process, Thompson said, adding, it doesn't seem as though the FDA is enforcing its premarket requirements in this area, at least not uniformly.

Thompson once viewed the FDA's inconsistent enforcement practices as “an expedient way to deal with low risk apps,” he told Bloomberg BNA. However, at least some of the apps the FTC has gone after are of a type that could either cause injury, or at least distract people from pursuing more legitimate therapies, Thompson said.

“So I am a bit puzzled, other than concluding that FDA wants” to refrain from an enforcement role for a while, Thompson said.

Next Steps for App Company

Seitz, for his part, isn't sure what Carrot Neurotechnology's next step is, he told Bloomberg BNA. “We’re in the process of regrouping.”

Carrot Neurotechnology's owners spent years without any financial gain trying to get Ultimeyes available to the public, according to Seitz.

Essentially all the momentum the company had was crippled by the FTC’s action, Seitz said, who added, his salary as a university professor isn't that large and his goal was to conduct research to benefit public health.

To contact the reporter on this story: Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com