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The Regulation of Medical AI: Policy Approaches, Data, and Innovation Incentives

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  • Ariel Dora Stern

Abstract

For those who follow health and technology news, it is difficult to go more than a few days without reading about a compelling new application of Artificial Intelligence (AI) to health care. AI has myriad applications in medicine and its adjacent industries, with AI-driven tools already in use in basic science, translational medicine, and numerous corners of health care delivery, including administrative work, diagnosis, and treatment. In diagnosis and treatment, a large and growing number of AI tools meet the statutory definition of a medical device or that of an in-vitro diagnostic. Those that do are subject to regulation by local authorities, resulting in both practical and strategic implications for manufacturers, along with a more complex set of innovation incentives. This chapter presents background on medical device regulation—especially as it relates to software products—and quantitatively describes the emergence of AI among FDA-regulated products. The empirical section of this chapter explores characteristics of AI-supported/driven medical devices (“AI devices”) in the United States. It presents data on their origins (by firm type and country), their safety profiles (as measured by associated adverse events and recalls), and concludes with a discussion of the implications of regulation for innovation incentives in medical AI.

Suggested Citation

  • Ariel Dora Stern, 2022. "The Regulation of Medical AI: Policy Approaches, Data, and Innovation Incentives," NBER Working Papers 30639, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30639
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    References listed on IDEAS

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    1. Stern, Ariel Dora, 2017. "Innovation under regulatory uncertainty: Evidence from medical technology," Journal of Public Economics, Elsevier, vol. 145(C), pages 181-200.
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K2 - Law and Economics - - Regulation and Business Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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