EU AI Act and its Impact on Israeli Companies in the Pharma and Medical Device Sector

The European Union recently introduced comprehensive regulations for AI systems, captured in the EU AI Act (click here for the AI Act explorer).

The objective of the AI Act is to ensure that AI systems in the EU are safe, trustworthy, transparent, traceable, and non-discriminatory. Last month, Israel joined the US, UK, and several other EU countries in signing an international convention providing guidance on how to harness AI for the common good while ensuring that democracy, human rights, and the rule of law are not undermined (click here for the full text of the convention).

The AI Act in particular, and the treaty too, have a number of implications on the health-tech sector and on medical device manufacturers, and given the AI Act’s extraterritorial reach, will likely impact many Israeli companies that market, deploy, or utilize AI systems or products incorporating AI, and their partners.
In broad terms the AI Act adopts a risk-based approach to AI regulation, categorizing systems by risk level into unacceptable, high, medium, and low-risk. Systems posing an unacceptable risk are banned, while those in the high, medium, and low-risk categories are subject to differing regulations, proportional to the risk they present.

In the life sciences and digital health fields, use of AI in medical devices or in clinical management of patients, such as diagnosing patients and informing therapeutic decisions, may be considered high risk; whereas  the use of AI in drug discovery (e.g. identifying potential targets and therapeutic pathways), non-clinical research and development and use of AI to analyze data of earlier stage clinical trials and model future studies, would likely be considered low-risk.

Although the provisions of the AI Act will not come into effect for some time, Israeli pharmaceutical companies and medical device manufacturers using AI technologies should already start to consider the following:

• Determine AI Act Applicability: assess whether the AI Act will apply to the company’s products/medical devices, seek to determine the AI risk profile of the product (i.e. will it likely fall under the definition of a high-risk AI system, prohibited AI system etc.) and consider whether the company serves as a provider, deployer, or distributor/importer of the AI system.
• Perform Evaluation: consider which relevant obligations under the AI Act are already being met, and which will need to be. Medical device companies generally already have in place quality management systems, risk management systems, and meet technical documentation requirements, however requirements regarding data governance, human oversight and accessibility may need to be addressed.
• Use reliable and compliant datasets: ensure that the data sets being used for training, validation and testing are high quality and meet the data governance requirements of the AI Act.

These developments present both opportunities and challenges for Israeli pharmaceutical companies and medical device manufacturers using AI technologies.

We will be happy to assist you in navigating these new regulatory landscapes.

The information provided on this client update is for general informational purposes only and should not be construed as legal advice or a substitute for professional legal counsel.