[Contribution 2] Explanation of the ‘Digital Medical Products Act’ for pharmaceutical practitioners - Focusing on the revised law system

Attorney Daeryun Lee Il-hyung, “Special legal nature...establishing an independent system distinct from the existing medical device law”
Unique regulations such as business licensing, clinical trials, performance evaluation, advertising regulations, actual use evaluation, and component-based approval

In the previous contribution, the contributor looked at the growth potential of the digital medical device market and explained the need for the enactment of the ‘Digital Medical Products Act’ and the purpose of the legislation. In particular, the characteristics of digital medical technology that are difficult to include in the existing medical device law system were emphasized, and the establishment of an independent regulatory system was inevitable. The Digital Medical Products Act, enacted against this background, has its own legal system that is distinct from existing laws. Below, we will focus on the overall framework and legal system of the Digital Medical Products Act.

1. Relationship between the existing legal system and the Digital Medical Products Act

The Digital Medical Products Act (hereinafter simply referred to as the Act) reclassifies and defines products that were classified as medical devices, in vitro diagnostic medical devices, pharmaceuticals, and industrial products under the existing legal system into digital medical devices, digital convergence medicines, and digital medical/health support devices.

For example, before the enactment of the Act, diagnostic software using AI technology was regulated as a medical device under the Medical Devices Act, and digital convergence medicines were regulated as drugs under the Pharmaceutical Affairs Act and/or medical devices under the Medical Devices Act. However, under the Digital Medical Products Act, they are all defined as ‘digital medical products’, especially as ‘digital medical devices’ and ‘digital convergence medicines’, respectively.

Below, we will examine in detail the differences in concept setting between the two laws by comparing the definition provisions of ‘medical device’ under the Medical Device Act and the definition provisions of the ‘Digital Medical Products Act’.
As you can see from the comparison table above, the key word in this law is the phrase ‘digital technology’ (advanced technology prescribed by the Prime Minister’s Ordinance, such as intelligent information technology, robot technology, and information and communication technology). In other words, the law defines digital medical products as medical devices, convergence medicines, and medical/health support devices using digital technology.

Looking at the relationship with the existing legal systems, the Medical Device Act and the Pharmaceutical Affairs Act, the Digital Medical Products Act functions as a kind of special law, and in cases where the unique requirements of ‘digital technology’ are met, this Act is applied first. On the other hand, if the product does not contain ‘digital technology’, it would be easy to understand that the existing Medical Device Act, Pharmaceutical Affairs Act, In Vitro Diagnostic Medical Device Act, or industrial product-related laws apply.

Meanwhile, regarding whether a digital medical product is a ‘digital medical device’, you can easily determine by using the chart below attached to the guidelines published by the Ministry of Food and Drug Safety.

2. The regulatory system of this law is different from the existing law.

As previously explained, the background to the enactment of this law is that 'digital technology' has characteristics that distinguish it from existing medical devices, and the existing legal system had limitations in effectively regulating these new technologies.

For example, since digital medical device software does not exist in a physical form, there is no need to apply the ‘sealing’ regulations under the existing Medical Device Act. In addition, digital medical products have the characteristic that the performance of the finished product can be predicted relatively accurately when made by combining proven components. Reflecting these characteristics, the law stipulates that in the former case, ‘sealing’-related regulations are not applied, and in the latter case, the licensing process can be simplified when the finished product is designed only with verified elements that have undergone component performance evaluation.

As such, the Act was designed to have an independent regulatory system that is different from the existing law. An overview of the main differences from the existing regulatory system is as follows.

Business license management: Introduction of a separate business license system that reflects the characteristics of digital technology

- New regulations for digital medical device manufacturing and importing businesses that manufacture or import digital medical devices (Articles 8 and 12 of the same Act)

-Special provisions regarding the sale of stand-alone digital medical device software (Article 27 of the same Act)

Simplification of clinical trials: Introduction of simplified clinical trial procedures reflecting the characteristics of digital technology

-The scope of clinical trials that require approval from the IRB and the Minister of Food and Drug Safety is expected to differ (Prime Minister’s Decree).

-Allow new types of clinical trials, such as data-based clinical trials (Article 9, Paragraph 5 of the same Act)

Component performance evaluation: Establish a component performance evaluation system to reflect the characteristics of digital medical products, which often consist of multiple components.

-The Minister of Food and Drug Safety can evaluate the performance of components that may affect the function of digital medical products, such as sensors and artificial intelligence algorithms.

-If a license applicant constructs a finished product using only components for which performance evaluation has been completed, he or she may receive the benefit of ‘simplification of the licensing process’ (Article 40, Paragraphs 1 to 3, Paragraph 5, etc. of the same Act).

Benefits of Excellent Management System Certification

-According to the ‘Regulations on Digital Medical Product Permission, Certification, Reporting, Review and Evaluation, etc.’ currently being discussed, manufacturers who have received excellent management system certification in accordance with Article 17, Paragraph 3 of the same Act can receive special rights. (Specifically, it is expected that the data corresponding to Article 24, Paragraph 1, Item 4 of the Act can be submitted in place of ‘information about the product (model design, input/output data, development information, etc.)’, ‘actual use evaluation plan’, and ‘actual use evaluation result report’.)

Establishment of new regulations related to professional software

- In the case of software for professional use, regulations such as “for professional use” labeling, sales channels, advertising methods, etc. (Articles 21 to 23 of the same Act)

In the case of stand-alone digital medical device software, exceptions to some provisions of the Medical Device Act are recognized: It is clarified that unnecessary regulations are not applied to stand-alone software.

-For stand-alone digital medical device software, Article 13 Paragraph 2 of the Medical Device Act (obligation to report production performance of medical devices, etc.), Article 18-5 (prohibition on open sales), Article 19 (standard standards for scope of application, shape or structure, test specifications, descriptions, etc. for medical devices), Article 25-5 (sealing), Article 29. Articles up to Article 31 (medical devices subject to tracking management, preparation and preservation of records, management of side effects), Article 31-2 (reporting of medical device supply details, etc.), Article 31-5 (reporting of discovery of foreign substances in medical devices, etc.), and Article 49 (renewal of manufacturing license, etc.) do not apply.

-The same also applies to cases where the Minister of Food and Drug Safety recognizes that it is appropriate not to apply the 「Medical Device Act」 considering the characteristics of stand-alone digital medical device software (Article 28 of the same Act).

Real-world evaluation

-Regarding actual use evaluation, a significant exception clause has been established that allows digital medical devices to be provided despite the rebate-related provisions of the Medical Device Act. Furthermore, digital medical device manufacturers, etc. are also given the benefit of being able to use actual use evaluation data in various approval procedures.

-Digital medical device manufacturers, etc. may evaluate the safety and effectiveness of digital medical devices (hereinafter referred to as “actual use evaluation”) based on information collected and generated during the actual use of digital medical devices (Article 15, Paragraph 1 of the same Act).

-Digital medical device manufacturers, etc. who wish to conduct an actual use evaluation may provide digital medical devices subject to evaluation to medical personnel, medical institution founders (including the representative or director of a corporation, or other persons engaged in this) and medical institution workers within the scope prescribed by the Ordinance of the Prime Minister, notwithstanding Article 13 (3) of the Medical Device Act, in order to collect data necessary for the actual use evaluation.

In this case, digital medical device manufacturers, etc. may request medical personnel, medical institution founders, and medical institution employees who use the digital medical device subject to evaluation to view or provide copies of records using the digital medical device (Article 15 of the same Act).

-The Minister of Food and Drug Safety may use the actual use evaluation data submitted by digital medical device manufacturers, etc. for manufacturing permission, manufacturing certification, and manufacturing notification under Article 8 Paragraph 3, change permission, change certification, and change report under Article 11, and import permission, import certification, and import declaration under Article 12 Paragraph 2 (Article 15 Paragraph 3 of the same Act, etc.).

3. Summary

Since the Digital Medical Products Act has a special legal nature, this Act applies when ‘digital technology’ is applied. This Digital Medical Products Act reflects the characteristics of digital technology and is building an independent system that is distinct from the existing medical device law. Specifically, it has unique regulations such as business licensing, clinical trials, performance evaluation, advertising regulations, actual use evaluation, and component-oriented approval.

Meanwhile, as mentioned at the beginning, the contents of the Digital Medical Products Act are so extensive that it was not possible to summarize all the contents in this contribution. In the next series, we plan to cover detailed provisions and practical explanations in depth, so we ask pharmaceutical industry practitioners to continue to pay attention. I would like to end this contribution here.

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[Contribution] Explanation of the 'Digital Medical Products Act' for pharmaceutical practitioners - Focusing on the revised law system (Shortcut)