AI in Healthcare: What You Need to Know About the FDA’s Regulatory RoleJanuary 4, 2023

Artificial intelligence (AI) technology is increasingly being used in the healthcare field, and the US Food and Drug Administration (FDA) plays a crucial role in regulating these applications. Below, we examine the different ways that the FDA regulates AI technology in healthcare and look at some of the challenges and opportunities presented by this rapidly evolving field.

To understand how the FDA regulates AI technology, it’s important to first understand the agency’s definition of a “device”, which is a product-by-product determination, based on the intended use.

According to the Federal Food, Drug, and Cosmetic Act (FDCA), a device is “an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is:

(1) recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them,

(2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or

(3) intended to affect the structure or any function of the body of man or other animals, and,

which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.”

However, this definition of a device does not include certain “software functions” that are excluded under section 520(o) of the FDCA, guidance for which was updated late in 2022. These excluded functions include software intended for

  • administrative support;
  • maintaining or encouraging a healthy lifestyle,
  • serving as electronic patient records,
  • transferring, storing, converting formats, or displaying clinical laboratory test or other device data and results, and
  • providing recommendations to healthcare professionals for clinical decisions (where the user can independently review the basis of the recommendation).

So, how does the FDA define a “software function”? According to the FDA, it is “a distinct purpose of the product, which could be the intended use or a subset of the intended use of the product.” For example, a product with an intended use to analyze data has one function: analysis. A product with an intended use to store, transfer, and analyze data has three functions: storage, transfer, and analysis.

With this understanding of the FDA’s definition of a device and a software function, let’s look at some specific ways that the agency regulates AI technology in healthcare.

One area where AI is being implemented is in clinical decision support (CDS) software. CDS software provides recommendations to healthcare professionals for clinical decisions, such as diagnosis and treatment plans. In late 2022 the FDA issued guidance on the regulatory pathways for CDS software, stating that it will generally regulate CDS software as a device if it meets the definition of a device and is intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease.

Under section 520(o)(1)(E) of the FDCA, to qualify as a non-device CDS, the software must:

  1. Not be intended to acquire, process, or analyze a medical image or a signal from an in vitro diagnostic device, or a pattern or signal from a signal acquisition system, for the purpose of:
    1. displaying, analyzing, or printing medical information about a patient or other medical information (such as peer reviewed clinical studies and clinical practice guidelines);
    2. supporting or providing recommendations to a health care professional about prevention, diagnosis, or treatment of a disease or condition; or
    3. enabling such health care professional to independently review the basis for such recommendations that such software presents so that it is not the intent that such health care professional rely primarily on any of such recommendations. (Section 520(o)(1)(E) of the FFDCA).

Another area where AI is being used is in the development of medical devices that use artificial intelligence and machine learning (AI/ML) algorithms. As of January 3, 2023, 91 AI/ML devices were approved by the FDA during the 2022 calendar year. In these cases, the FDA evaluates the device as a whole, including the AI/ML algorithms, to determine its safety and effectiveness. Examples include the atrial fibrillation detection feature on Apple watches, and OsteoDetect, used to assist healthcare professionals in diagnosing wrist fractures. The agency has issued guidance on the premarket review of medical devices that use AI/ML algorithms, stating that it will consider the validation and testing of the algorithms, as well as the intended use and potential risks of the device.

Looking ahead, it’s clear that AI technology will continue to play a significant role in healthcare. To help navigate the complex landscape of digital health, the FDA has established a Digital Health Center of Excellence. This center serves as a resource for the agency, industry, and other stakeholders to address the unique challenges and opportunities presented by digital health technologies, including AI.

In addition, the FDA has outlined its strategic priorities for digital health, which include cybersecurity, promoting the development and adoption of safe and effective digital health technologies, facilitating the modernization of the regulatory framework for these technologies, and enhancing the agency’s own capabilities in this area.

As AI technology continues to evolve and be integrated into healthcare, it will be critical for the FDA to keep up with the latest developments and ensure that these technologies are being used safely and effectively. The FDA’s efforts to regulate and oversee AI technology in healthcare will play an essential role in ensuring the quality and reliability of these products for patients and healthcare professionals.

Because there is no discussion or publication of an effective compliance date for these updated regulations such as new regulations stemming from the Cures Act, companies should review the regulatory freedom to operate for current products on the market as well as products in development to ensure appropriate regulatory compliance.

Cassie J. Edgar, Patent Attorney and Chair of the Regulatory Law practice group, advises clients in intellectual property, regulatory law, crisis management, compliance, stewardship, lobbying, and matters with USDA, FDA, EPA, and FTC. Cassie is also Co-Chair of the Data Privacy and Cybersecurity practice group. For additional information, please visit MVS or contact Cassie directly via email at

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