Shifting gears toward healthcare makes sense in the long-term, analysts said. But it will take a lot of time and money to get there, Leerink analyst Steven Wardell told Bloomberg, especially as the company encounters a tougher regulatory environment for its products. “The health-care market is still early-stage and is going to be more expensive to develop than the consumer market,” Wardell said. “If they choose to make clinical claims and seek FDA approval, then they’ll probably find that it will cost more and take longer.”
Fitbit is already coming under fire for one of its new medical-facing technologies. Consumers in several states filed a class-action lawsuit claiming that the company’s heart-monitoring tech is “wildly inaccurate” and could harm individuals because it under-counts heart rates by as much as 75 beats per minute, Bloomberg reports. And slogans on the product like “every beat counts” make consumers believe that they could rely on the device for accurate readings, the plaintiffs said in their suit.
But Fitbit CEO James Park doesn’t seem too worried about the suit. The company’s product is “not a medical-grade device; it’s a consumer device. In that setting it works incredibly well,” Park told Bloomberg. “You should probably follow your doctor’s advice and use whatever device they prescribe to you. Just use your judgment.” Park is also unfazed by analysts’ opinions that the company could be in for an uphill regulatory battle once it moves into med tech. “I think we’ve had a pretty open policy with regulators,” Park said. “I’ve been out to D.C. multiple times already. We want to work together with the government to find the right balance.”
Fitbit is working hard to achieve its med tech aspirations. The company in the last three years has more than quintupled its annual R&D budget to $150 million and has hired new software developers and engineers, Bloomberg points out, laying the foundation for future work. Eventually, the company’s devices could monitor vital signs including blood pressure and blood sugar, or even diagnose diseases.
Still, it could be a long road for Fitbit until it finds its stride in med tech. “We’re not there yet,” Park said. “But we think 5 to 10 years down the line, the power of these devices to help consumers, health-care providers, the whole health-care ecosystem track and give diagnoses to people–I think it’s incredibly tantalizing.”
Meanwhile, the FDA is refining its view on health-tracking devices. The agency has said that it would take a hands-off approach in regulating “general wellness devices.” However, Bakul Patel, the FDA’s associate director for digital health, told Bloomberg that the agency would start regulating the technology if/when Fitbit’s products claim to diagnose or treat certain conditions.
REFERENCE: Fierce Medical Devices; 18 APR 2016; Emily Wasserman