FTC UNDER THE MICROSCOPE — In May, the Federal Trade Commission proposed a sweeping expansion of health data privacy rules, and now, the period for the public to weigh in has ended. While many comments were supportive, others were concerned that the FTC was overstepping its authority, opening itself up to litigation, and urged more clarity. What’s new in the rule: The proposal would clarify that health app developers would be subject to regulations requiring them to notify customers if their identifiable data is accessed by hackers or business partners or shared for marketing without patient approval. The rule would include those offering health services and supplies — broadly defined to include fitness, sleep, diet and mental health products and services, among a laundry list of categories. The proposal aims to clarify how the FTC plans to expand its use of a 14-year-old rule. Earlier this year, it used the rule in relation to sharing data with business partners for the first time against GoodRx, settling for $1.5 million and accusing the site of sharing data with Google, Facebook and other firms. Angela Matney, counsel at Reed Smith, noted that the rule was initially intended to be temporary until federal privacy legislation was enacted. “Some companies do see this as a broad, maybe very broad expansion,” Matney told Pulse. “Others might see it as a codification of existing interpretations.” The supporters: The proposal received significant backing, including from leading Democrats on the Hill, the American Psychiatric Association, the American Academy of Family Physicians and CHIME. CHIME, which represents health IT leaders, said the proposal would better secure health data from the increasing number of health apps, including wellness products, that don’t fall under HIPAA, which applies to insurers and providers. “We have been disheartened to see various mental health apps fall short of their privacy promises, giving away their data to third parties using deceptive practices,” Reps. Adam Schiff (D-Calif.), Sara Jacobs (D-Calif.) and four other members commented. “We are glad to see the FTC take an important step in strengthening protections.” The skeptics: The Health Innovation Alliance, data-sharing firm DirectTrust, genetics firm Invitae and others raised concerns about the rule’s scope. “Your current proposed rule relies on authority the Commission has granted itself. We fear that well-intended proposals to protect consumer and patient privacy in your rule will be challenged and overturned by litigation,” the Health Innovation Alliance wrote, echoing concerns from legal experts and adding that “simple vendors like corner markets” could fall under the rule. Others like HIMSS’ Electronic Health Record Association called for more clarity on what health data falls under the rule. WELCOME TO WEDNESDAY PULSE. Are you a part of a company that didn’t comment on the FTC’s rule but wants to be heard? Reach me at bleonard@politico.com. I can keep you anonymous. And send feedback, scoops and tips to me and Chelsea at ccirruzzo@politico.com. Follow along @_BenLeonard_ and @ChelseaCirruzzo. TODAY ON OUR PULSE CHECK PODCAST, host Megan Messerly talks with David Lim about the drop in the reporting of medical device shortages to the FDA after mandatory reporting requirements — tied to the Covid-19 public health emergency — expired in May.
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