Overview

"Digital healthcare" is not specifically defined under Philippine law. Instead, digital healthcare in the Philippines broadly refers to technology or digital innovation in healthcare.

In recent years, the Philippines has seen a rise in digital healthcare technologies. These include the increased use of telemedicine platforms to access health services; use by healthcare providers of electronic medical records and electronic prescriptions; the use of wearable and other devices to monitor or identify health conditions, including for purposes of clinical trials; and the use of customisable apps in hospitals for visualising patient health in augmented reality, laboratories to monitor experiments, and for student doctors for reproducing real life situations in training, and in the administration of treatment of physical and mental disease.

Regulatory Environment for Digital Health

Laws and regulations governing medical devices and other health products

Republic Act No 9711, as amended, and the Food and Drug Administration Act of 2009 ("FDA Act") govern the manufacture, importation, sale, offering for sale, promotion, advertising and sponsorship of any health product in the Philippines. A "health product" includes devices, in addition to food, drugs, cosmetics, biologicals, vaccines, in vitro diagnostic reagents and household/urban hazardous substances or a combination or derivative thereof and other products that can affect health that require regulation, as determined by the Food and Drug Administration (FDA).

Instruments, machines, software and other articles used in connection with digital healthcare may be classified as medical devices, depending on their intended use and product claims.

An entity that intends to engage in the importation, marketing, sale and distribution of medical device products must obtain a licence to operate (LTO) for this purpose from the FDA.

Medical device companies may not import, export, manufacture, market, or distribute their medical devices in the Philippines unless these are notified to or registered with the FDA, depending on the risk classification of the device.

In this regard, any instrument, apparatus, implement, machine, appliance, implant, in vitro reagent or calibrator, software, material, or other similar or related article which satisfies the following is to be a medical device:

• the device must be intended for human beings;
• the manufacturer intends it to be used for any of the following:

a) diagnosis, prevention, monitoring, treatment or alleviation of disease;

b) diagnosis, monitoring, treatment, alleviation of or compensation for        an injury;

c) supporting or sustaining life;

d) preventing infection;

e) control of conception;

f) disinfection of medical devices; and

g) providing information for medical or diagnostic purposes by means of in vitro examination of specimens derived from the human body.

To align the regulations in the Philippines with the ASEAN Medical Device Directive (AMDD), the Philippine Department of Health (DOH) has issued guidelines that govern the notification or registration of medical devices with the FDA prior to importation, exportation, marketing, manufacture and distribution in the Philippines. DOH Administrative Order No 2018-0002 entitled: "Guidelines Governing the Issuance of an Authorisation for a Medical Device based on the ASEAN Harmonized Technical Requirements" ("MD Guidelines") adopts a classification system for medical devices according to their level of risk. Under the MD Guidelines, all medical devices under Class A (low risk) must be notified to the FDA, while all medical devices under Classes B to D (low to moderate, moderate to high, and high) must be registered with the FDA. The FDA will issue (i) a Certificate of Medical Device Notification (CMDN) upon successful notification of a Class A medical device and (ii) a Certificate of Medical Device Registration (CMDR) upon successful registration of a Class B/C/D medical device.

Software as a Medical Device

A software may be considered a "medical device" if it satisfies the definition thereof as provided in the preceding section. In such a case, the software must be notified to or registered with the FDA, depending on its risk classification. It is, therefore, prudent in the first instance to determine whether a particular software can be classified as a medical device based on the definition above, as well as how it will be provided to and operated in the Philippines.

In addition, the FDA may consider a software as a medical device if the same or a similar product is classified as such in other ASEAN jurisdictions. In this regard, it may be worth reviewing the marketing authorisations issued by other jurisdictions and claims made in the products’ marketing materials, to confirm whether a software is likely to be defined as a medical device.

Wearables/Health Apps as Medical Devices

Similarly, wearables such as fitness trackers may be classified as medical devices, depending on their intended use and the manner in which they are marketed to the public.

A wearable or fitness app may be considered a medical device if it is intended for diagnosis, monitoring, treatment, alleviation of a disease or injury. If the app's function is limited to measuring heart rate, blood pressure, or other health information, its intended use may not necessarily fall within the definition of a medical device. As such, wearables or apps used in such a manner may not be considered a medical device and therefore not subject to the regulatory requirements under DOH and FDA regulations.

On the other hand, if the wearable or app is intended for medical purposes, including diagnosing an ailment or disease, monitoring certain health conditions, or treating any disease or injury, the wearable or health app may be classified as a medical device. As mentioned above, an entity that intends to engage in the importation, marketing, sale and distribution of medical device products must obtain an LTO from the FDA and the device must be covered by a CMDN or a CMDR, depending on its risk classification. 

If the wearable or health app is not classified as a medical device, it will not be subject to the regulatory jurisdiction of the FDA over health products, and its importation, distribution, marketing and sale in the Philippines will be governed by general consumer protection laws applicable to all consumer products.

Clinical Trial Regulation

As a part of the accelerated digitalisation resulting from the COVID-19 pandemic, the manner of conducting clinical trials has also evolved. Digital technologies have allowed remote monitoring of clinical trial subjects through software and devices that are capable of collecting clinical, physiological and other functional data.

In the Philippines, clinical trials are regulated by the DOH and FDA. The DOH has issued Administrative Order No 2020-0010 (AO 2020-10), which provides for the regulations on the conduct of clinical trials for investigational products.

Under AO 2020-10, all establishments that will conduct clinical trials in the Philippines, for product registration, shall secure an LTO from the FDA, as a clinical trial sponsor and/or a Contract Research Organisation (CRO). A sponsor is defined under AO 2020-10 as an individual, company, institution, or organisation that takes responsibility for the initiation, management, and/or financing of clinical trials. A CRO, on the other hand, refers to a person or an organisation (commercial, academic, or other) contracted by the sponsor to perform one or more of a sponsor's trial-related duties and functions.

AO 2020-10 also provides that all clinical trials of investigational products shall be conducted in accordance with the International Council of Harmonization-Good Clinical Practice (ICH GCP) standards. Investigational products refer to a pharmaceutical form of an active ingredient or placebo being tested or used as a reference in a clinical trial, including a product with a marketing authorisation when used for an unapproved indication, or when used to gain further information about an approved use.

Under AO 2020-10, all clinical trials on investigational products shall undergo mandatory review and approval by the FDA and shall only commence once FDA and the institutional research ethics committees (RECs) have issued their approval. 

Under AO 2020-10, all clinical trials shall be uploaded to the Clinical Trial Registry which is available to the public to ensure transparency. Reporting of all suspected, unexpected serious adverse reactions shall comply with all applicable regulatory requirements and the ICH Guidelines for Clinical Safety Data Management: Definitions and Standards for Expedited Reporting.

Republic Act No 10532 institutionalised the Philippine National Health Research System ("PNHRS Act"). The PNHRS, (which was constituted prior to the passage of the PNHRS Act) acting together with the Philippine Health Research Ethics Board issued the National Ethical Guidelines for Health and Health-Related Research in 2006 ("National Ethical Guidelines"). The National Ethical Guidelines were updated in August 2017.  The National Ethical Guidelines provides for the ethical and technical review and approval of clinical trial protocols from RECs.

The National Ethical Guidelines provide that a clinical trial protocol must contain the following elements, among others:

• a study design that substantially determines the scientific integrity of the trial and the reliability of the data and includes the matters specifically provided for in the National Ethical Guidelines;
• efficacy parameters, methods and timing;
• safety parameters, methods, timing and procedures for recording and reporting, as well as monitoring adverse reactions;
• safety measures for research participants when they withdraw/or are withdrawn from the study;
• plan for data and statistical analysis; and
• data management and record keeping.

The collection of data through digital technologies can be a consideration in the granting of approval for a clinical trial. As mentioned above, the study design and the efficacy parameters, methods and timing and plan for data and statistical analysis will be reviewed and considered in reviewing the clinical trial protocol. The uncertainty regarding the integrity of the data and efficacy or accuracy of the collection methods through digital technologies may be an area of concern for the REC and the FDA.

Telemedicine

Republic Act No 11223, otherwise known as the Universal Healthcare Act, and its rules and regulations recognises the use of digital technologies for remote access and delivery of individual-based health services. 

In response to the increased use of telemedicine during the COVID-19 pandemic, the Philippine government has issued various regulations on telemedicine. Currently in effect is the Joint Administrative Order No 2021-001, issued by the DOH, Department of Interior and Local Government (DILG), and the Philippine Health Insurance Corporation (PhilHealth), which provides for the guidelines on the implementation of telemedicine in the delivery of individual-based health services ("Telemedicine Guidelines").

Under the Telemedicine Guidelines, "telemedicine" is defined as the delivery of health care services where distance is a factor, by all health care professionals using information and communication technologies for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries and evaluation and for the continuing education of healthcare providers, all in the interest of advancing the health of individuals and their communities.

Under the Telemedicine Guidelines, only licensed physicians are allowed to practise telemedicine. Moreover, the practice of telemedicine shall follow the standards of the practice of medicine as defined under the Medical Act and its rules and regulations, the Philippine Medical Association (PMA) Code of Ethics and other applicable policies. Further, physicians shall observe the same standards of care as in face-to-face consultations but with the intrinsic limitations of telemedicine.

Under the Telemedicine Guidelines, the minimum health services to be provided shall include medical diagnosis, health advice and counselling, issuance of electronic prescription and/or referral. The nature of the individual-based health services and information shall be based on the service capability, mode of consultation, purpose of consultation, timing of consultation, persons involved, specific conditions of the patient and the localised standard telemedicine protocol.

The Telemedicine Guidelines also provide that all telemedicine consultations by licensed physicians shall have proper documentation and all electronic consultation documents shall contain a digital signature, name, licence number, professional tax receipt (PTR), if applicable, of the issuing licensed physician. Further, all electronic prescriptions must contain the name of the patient to whom the medicines or drugs are prescribed, the name of the medicines and/or drugs prescribed, the dosage and all other pertinent details similarly contained in a written prescription.

The Telemedicine Guidelines also provide for governing principles in the practice of telemedicine. These include the requirement for telemedicine consultations to allow both the patient and licensed physician to know, verify and confirm each other’s identity at the start of the consultation. Proper informed consent must also be obtained from the patient prior to the collection of personal data and the offering of any telemedicine service. Further, it mandates that the principle of privileged communication between the licensed physician and the patient shall be observed at all times.

Potential Legal Issues

Cross-border regulations (particularly licensing and regulatory issues)

The increased use of digital technologies, including wearables and telemedicine platforms may give rise to regulatory and licensing issues.

In the Philippine setting, only licensed professionals may engage in telemedicine. With the rise of telemedicine platforms, access to offshore healthcare services is made possible. In this regard, a foreign healthcare provider (who is not licensed to practise medicine in the Philippines) may be deemed to be engaged in the practice of medicine in the Philippines in violation of Philippine laws and regulations. 

Similarly, the foregoing issues may be present when telemedicine platforms in the Philippines allow access to healthcare services in other jurisdictions which have similar restrictions on the practice of medicine.

Further, digital technologies that are considered as medical devices are subject to regulation by the FDA. For software and other technologies that provide access to patient conditions and health remotely, enforcement of such regulatory requirements may pose challenges for the FDA.

Moreover, companies that make technologies available in the Philippines through the internet may be considered as doing business in the Philippines and required to establish a business presence and obtain a licence from the Philippine Securities and Exchange Commission (SEC).

Practice of Profession

Under the Philippine Constitution and unless otherwise provided by law, the practice of all professions, including the medical profession, is limited to Filipino citizens.

Corporate practice of a profession is also prohibited and against public policy. In a decided case, the Philippine Supreme Court held that "a hospital, as a juridical entity, cannot practice medicine," a profession. In an opinion, the SEC opined that personal qualifications for the practice of a profession cannot be possessed by a corporation, and in view of the distinct and separate personality of the corporation from the individual members or stockholders, a corporation could not have the power to perform an act requiring a licence which only individuals could obtain. Thus, while a corporation can hire a professional for their services, the corporation itself cannot hire professionals for the purpose of carrying on the business of practising a profession.

However, under the Medical Act, a person shall be considered as engaged in the practice of medicine as a profession who (i) shall for compensation, fee, salary or reward in any form paid to them directly or through another, or even without the same, physically examine any person and diagnose, treat, operate or prescribe any remedy for human disease, injury, deformity, physical, mental, psychical condition or any ailment, real or imaginary, regardless of the nature of the remedy or treatment administered, prescribed or recommended; or (ii) shall by means of signs, cards, advertisements, written or printed matter, or through the radio, television or any other means of communication, either offer or undertake by any means or method to diagnose, treat, operate or prescribe any remedy for any human disease, injury, deformity, physical, mental or psychical condition; or (iii) who shall use the initials “MD” after their name.

The Medical Act also provides that any person found guilty of "illegal practice of medicine" shall be punished by a fine of not less than PHP1,000 nor more than PHP10,000, with subsidiary imprisonment in case of insolvency; or by imprisonment of not less than one year nor more than five years; or by both a fine and imprisonment, at the discretion of the court.

Depending on the operational arrangements of the telemedicine platform and the entities offering digital technologies in the Philippines, they could be deemed to be engaged in the practice of medicine as a profession, in violation of the Medical Act and the Philippine Constitution.

Advertising and Promotion of Health Products and Medical Services

Philippine laws and regulations also regulate the advertising and promotion of medical devices and medical services.

Under the rules and regulations of the FDA Act ("FDA Act IRR"), a manufacturer, owner, distributor, advertiser and or its agents are mandated to strictly adhere to the standards, guidelines and rules and regulations prescribed by the FDA, including the following:

• no health product that has not been registered or authorised shall be advertised, promoted or subjected to any marketing activities;
• no claim in the advertisement, promotion and sponsorship or other marketing activities shall be made other than those contained in the approved label or packaging of the health product, or as duly approved by the FDA; and
• no claims, therapeutic, scientific or otherwise, shall be made that has not been duly approved by the FDA.

On the other hand, DOH Administrative Order 2015-0053 or the Implementing Guidelines on the Promotion and Marketing of Prescription Pharmaceutical Products and Medical Devices (“PPPMD Guidelines“) provide detailed rules and guidelines on the advertising and promotion of medicines and medical devices to the public and healthcare professionals.

Under the PPMD Guidelines, all advertising, promotional or other marketing materials, whether written, audio or visual, for products within the scope of such guidelines, may be subjected to a post-audit by the FDA and if any should be found to violate any FDA provisions, a cease-and-desist order and/or penalties and/or fines shall be issued by the FDA. Responsibility to ensure compliance with the PPMD Guidelines belongs to the Prescription Pharmaceutical Company.

Republic Act. No 7392, as amended, otherwise known as the Consumer Act of the Philippines ("Consumer Act"), also regulates advertising in the Philippines. Under the Consumer Act, advertising is defined as "the business of conceptualising, presenting or making available to the public, through any form of mass media, fact, data or information about the attributes, features, quality or availability of consumer products, services or credit."

The Consumer Act also provides that advertisements must comply with the Code of Ethics of the Ad Standards Council ("ASC Code of Ethics"). The ASC Code of Ethics and Guidebook have specific provisions dealing with the advertisement of pharmaceutical products and devices. The ASC Code of Ethics mirrors the provisions in the FDA Act IRR.

Under the ASC Code of Ethics, print advertisements, merchandising materials, internet/digital/mobile advertisements involving medical devices are subject to post-screening by the ASC, except when they include leadership, exclusivity, absolute, comparative, and superiority claims, testimonials or direct comparisons. ASC clearance or pre-screening is required when the advertisement is published in the form of broadcast materials, cinema advertisements or out-of-home material.

Under the ASC Code of Ethics, out-of-home advertisements are essentially those that intend to reach consumers while they are outside the home. They include:

• billboards;
• indoor or outdoor digital displays (eg, malls, shopping centres);
• transit ads;
• street furniture/fixtures (eg, sheds, walkways, garbage bins, street signs, lamp posts, lighted signage); and
• blimps.

The ASC Code of Ethics also includes rules on advertising of or by healthcare professionals. Under the Code of Ethics:

• endorsements by a medical practitioner shall be subject to the Code of Ethics and applicable laws and regulations to their profession;
• advertisements or endorsements may state only the professional’s name, address, office hours and licensed area of practice or specialisation;
• endorsements, direct or implied, are prohibited by the Code of Ethics of the profession and applicable laws, endorsements by actors portraying the medical practitioner shall not be allowed.

The use of digital technologies, including telemedicine platforms to advertise services rendered by medical professionals and/or health products must comply with the foregoing regulations and guidelines.

Product Liability

Current regulations of the FDA provide that the Marketing Authorisation Holders (MAH) have the overall responsibility for continuously ensuring the safety and quality of health products, including medical devices. The MAH would be the entity to which the CMDN or CMDR of the product is issued.

If digital health technologies are classified as medical devices, the MAH would generally be responsible for any product liability arising from the device.

Mass Media

Under the Philippine Constitution, the ownership and management of mass media shall be limited to Philippine citizens, or to corporations, cooperatives or associations wholly owned and managed by Philippine citizens.

Under the rules and regulations of the Consumer Act, "mass media" refers to any means or method used to convey advertising messages to the public such as television, radio, magazines, cinema, billboards, posters, streamers, handbills, leaflets and mail.

Based also on a formal written opinion of the SEC, an entity is deemed to be engaged in mass media if (i) it disseminates information to the general public and (ii) such information is designed to affect or influence the people's way of thinking.

Further, the SEC has opined that an online or mobile app platform operator (which renders service to third-party clients) is not deemed to be engaging in mass media activities when:

• there is no pervasive or indiscriminate display to the general public of any promotional materials or advertisements on the products or services being offered by third-party clients or even the platform or mobile application itself;
• only the following information is made available in the application, website or platform;

a) enumeration of the services offered by the platform itself;

b) instructions on how to use the said platform;

c) enumeration of third-party partner, limited to the listing of the name or logo of the third-party client;

d) any other information on the platform required to be disclosed by any law or regulatory measures;

• the disclosure of the products and services offered by its third-party clients is only for the purpose of completing the transaction enabled by the app, website or platform.

Data Use and Data Sharing

The Data Privacy Act (DPA) protects data subjects from any form of unauthorised processing of personal information and sensitive personal information. The DPA defines “personal information” as any information, whether recorded in a material form or not, from which the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the information, or when put together with other information, would directly and certainly identify an individual. “Sensitive personal information” refers to personal information, such as information about an individual’s health.

The provisions of the DPA, and the requirements set therein, will apply to telemedicine platforms and HCPs who typically require data subjects (ie, end users) to provide their personal information and who collect sensitive personal information, such as information about a patient's health or condition.

The DPA and issuances of the National Privacy Commission (NPC) (“DP Regulations”) govern the collection, transfer and other forms of processing of personal data. The provisions of the DP Regulations have extra-territorial application and may, therefore, apply even to processing of personal data outside the Philippines.

Hot Topics and Trends

The acceleration of digitalisation in the Philippines has led to strategic partnerships between healthcare companies and technology companies. Pharma companies looking to enhance their digital capabilities and add new technology to their portfolio have invested in or acquired start-up tech companies. Healthcare companies are also shifting their focus to digital products and product innovations and are veering away from traditional consumer businesses.

Meanwhile, big tech companies are looking at breaking into the healthcare sector through the introduction of digital health products for consumers (including wearables and other digital medical devices), as well as hospitals and other healthcare facilities.

The synergy between healthcare companies and tech companies is expected to result in the adoption of digital health technologies in a wider range of activities, including patient care delivery, practice management, clinical trial recruitment, patient monitoring, treatment optimisation and advanced therapeutics.

As the healthcare industry is a highly regulated in the Philippines, investors in the sector should consider the existing regulatory regime, potential reforms and possible changes in regulations when evaluating the value and risks associated with an acquisition or other strategic partnership.

Key issues potential investors should consider include:

• whether the target/acquisition will be subject to foreign equity restrictions (such as those applicable to mass media);
• whether the investment/acquisition will trigger a change of ownership or change in control clauses in the target's permit, licences, or registrations; and
• if approval of the regulatory agencies (such as the FDA) will be required on account of the proposed transaction.

As the pharmaceutical sector has also been identified as a priority sector of enforcement, merger control review is of particular importance in healthcare and life science deals as these may be subject to greater scrutiny for potential anti-competitive outcomes.