Key legal aspects of implementing digital therapeutics (DTx) in Switzerland

The inclusion of a service component in DTx or any other software product may raise potential legal issues as the provision of medical and healthcare services is regulated to ensure patient safety, quality of care, and ethical standards. In addition, anyone providing medical or healthcare services must be licensed by the relevant authorities.   

In Switzerland, there is no clear distinction between medical services that require a professional licence and other services that do not. The respective obligations are subject to cantonal law, and the enforcement and case law of the cantonal authorities is not uniform. In the canton of Zurich, for example, a licence is required among other things for anyone who treats illness, injury, or other health impairment according to recognised scientific findings.  

To navigate the legal requirements, manufacturers and other platform providers should carefully analyse the services they intend to offer alongside their software and assess whether they fall within the scope of regulated healthcare services. This divergence in cantonal case law is the reason why expert opinions are regularly sought on this issue in practice. 

As DTx and other software products do not qualify for a professional licence, it is crucial that the manufacturer or platform provider does not engage in the provision of healthcare services to customers without the involvement of natural persons who have obtained the necessary licenses, such as physicians or other qualified healthcare professionals, to ensure compliance with the regulatory framework. 

Apart from the qualification of the product as such, often companies active in this space also wish to offer services or service components, such as coaching or elements of telemedicine. Here the question arises whether this is legally possible or whether – as is the case for instance in Germany, such healthcare services may not be provided unless the manufacturer uses physicians. This requirement can have a big impact on the design of the software and the level of service offered in a country.

Under German law, German Health Care Practitioners' Act (Heilpraktikergesetz – "HeilprG") defines what is to be considered a medical treatment/healthcare ("Heilkunde"). According to the provision, healthcare shall be "any professionally or commercially performed activity for the determination, healing or alleviation of illnesses, suffering or bodily harm in humans, even if it is performed in the service of others". The provision of healthcare requires a license either as a physician or as another licensed healthcare practitioner.

The distinction between the healthcare/practice of medicine and other activities that do not require a license is not absolute and not clear-cut, which is why expert opinions are regularly obtained on this question in practice.

As a main consequence, the applicability of the HeilprG results in the acting persons or service provider being required to have the necessary license to practice medicine/healthcare according to German law as they would be practicing medicine in Germany (towards German patients).

As an example, this would, inter alia, require them to have obtained medical or psychotherapist education and continuing training as well as successful completion of the necessary examinations in Germany or to have undergone a corresponding recognition procedure.

As digital services are not able to obtain such license, it is crucial that a DTx without involvement of natural persons does not engage in providing healthcare services to customers.

In practice, it is thus important to take into account before entering the German market that a medical software may on the one hand qualify as a medical device – entailing the need to a quality management system and the conformity assessment of the device – and on the other hand be aimed at facilitating the provision of healthcare. In the latter case the persons delivering such services must be sufficiently qualified under German law, i.e. normally be doctors qualifies in Germany or at least Heilpraktiker.

It is also important to note that in principle the healthcare services may not be provided by companies which are not owned by doctors, a hospital or a private clinic. This means that the provision of healthcare services by companies employing doctors is in general not in line with German law.

Digital health solutions rely on the processing of personal data to function. This data is often of a sensitive nature. Appropriate data protection standards and sophisticated data security concepts are therefore essential. 

As Switzerland does not have a specific reimbursement system for digital health solutions, data processing is governed solely by the Data Protection Act. A revised Data Protection Act came into force in September 2023 (DPA).  

The DPA emphasises on the protection of personal data and imposes obligations on data controllers and processors to ensure appropriate technical and organisational measures to safeguard data. All DTx and other medical software must comply with the requirements set out in the DPA in more detail. The DPA applies to all handling of personal data, such as the collection, storage, use, processing, disclosure, archiving and destruction of data, regardless of the means and procedures used.  

The following principles must be observed when processing personal data: 

• Data subjects must be informed in a transparent and comprehensible manner about the data processing, in particular about the purposes of the processing and the recipients of the data whenever personal data are collected. It should be possible to access the information on data processing at any time. 
• The collection of data and the purposes of its processing should be carried out in good faith. Data should only be processed in a way that the data subject would expect. If the collection of data and the purposes of its processing are not obvious to the data subject, he or she must be informed.  
• Processing of personal data should be proportionate. The requirement of proportionality is met when the processing is limited to what is appropriate and necessary for the performance of the task or achievement of the stated purpose. Proportionality also means that personal data should be kept only for as long as it is actually needed to perform the task or for as long as a legal obligation to keep it requires. When personal data is no longer needed and there is no legal obligation to keep it, it must be irrevocably deleted.  
• Processing must be adequate. The requirement of adequacy is met when the processing of personal data is carried out only for the purpose that was defined and specified when the data were collected. 

In order to protect data security, the manufacturer or platform provider shall take the necessary technical and organisational measures to protect personal data against unauthorised access, alteration and loss. The technical and organisational measures to be taken will depend on the level of risk. Examples of technical and organisational measures include restricting access, backing-up data and training staff. 

Special requirements apply to the cross-border transfer of personal data, in particular if the manufacturer or platform provider uses servers located outside of Switzerland or in a country without adequate data protection law and data security. Companies operating in this areas are well advised to carefully check whether these conditions are met at an early stage and before launching the product. 

Apart from the legal requirements mentioned above, which must be considered when developing and placing it on the market, there are currently no specific key legal requirements under Swiss law for DTx and other software products. 

If the DTx or any other medical software product qualifies as a medical device (see 1a above), the advertising rules of the Medical Devices Ordinance apply. As a result, these products may only be advertised to consumers, if they are not intended exclusively for use by healthcare professionals on or for the patient. If the product is intended for use by healthcare professionals, advertising to the general public is not permitted.  

If advertising to the general public is permitted, the advertising must be designed in such a way that the promotional nature is clearly expressed and the product is clearly presented as a medical device. In addition, advertising must be consistent with the product information. Misleading information, in particular about the intended use, safety and performance of a product, is prohibited. Statements about functions and features that the product does not have, or the absence of information about possible risks, are also considered misleading and therefore unlawful. On the other hand, the use of testimonials and patient reports is generally allowed, as long as the advertising is not misleading. The nature of the advertisement must not be disguised.  

The laws governing the practice of medicine and healthcare require that, when collaborating with other medical or healthcare professionals, they act solely in the best interests of the patient and independently of financial gain.  

In Switzerland, there is no provision that would generally prohibit the granting of a financial or material benefit to a person, who prescribes or dispenses a software product or any other medical device. The relevant provision of the Swiss Act on Therapeutic Products is limited to prescription medicines (Rx). However, if a medical device is subject to reimbursement by the mandatory health insurance in Switzerland, in particular because it is included in the list of means and objects (Mittel- und Gegenständeliste, MiGeL), and the recipient of the benefit is authorised to invoice his services as a service provider in accordance with the Swiss Health Insurance Act, certain benefits such as rebates and discounts, must be passed on to the health insurer.  

 Various forms of collaborations and partnering are legally possible in Switzerland. Some examples are cooperation with physicians, hospitals, or insurance companies. Development partnerships are also common as are partnerships with strategic or financial investors for the development of new features or indications for DTx. 

It is crucial to have appropriate contracts in place to meet legal requirements and protect the interests of all parties involved. Contracts should cover aspects such as intellectual property rights, licensing, liability, warranties, termination conditions, and dispute resolution mechanisms, as well as the necessary measures to safeguard patient data and ensure compliance with data protection laws. 

There are several possible distribution routes for digital health solutions in Switzerland. Swiss law allows medical devices to be dispensed directly to patients. Therefore, one option is to offer downloads for patients through app stores, where patients can pay for and download the digital health solutions.  

Another approach is to sell or license DTx or other digital health solutions to cooperation partners, such as insurance companies or healthcare providers, such as hospitals or outpatient clinics that provide the digital health solutions as part of their supplementary health insurance program available to insured individuals. 

In addition, under the Medical Devices Ordinance each distributor must register with the Swiss Medical Devices Registry, stating its (company) name, address, and type of its business activity.  

Switzerland is renowned for its world-class healthcare system. However, it has been slower in its digitalization. As a result, it has not yet embraced the opportunities of healthcare digitalisation to the same extent as other countries and has not yet enacted specific framework legislation for digital health solutions and their reimbursement by the statutory health insurance system. As a result, digital health solutions have only been introduced on a small scale. According to the Bertelsmann Foundation's Digital Health Index Ranking of 2018, Switzerland ranks 14th out of 17 countries in terms of the degree of digitalisation. This is despite the fact that Switzerland meets many of the requirements for successful digitisation of the healthcare system, - from high broadband internet coverage to a high level of digital literacy among the population.  

With high healthcare spending (CHF 83.3 billion, equivalent to 11.8% of GDP in 2020) and steadily rising compulsory health insurance premiums (3.8% per year between 1998 and 2019) digitisation and the expected efficiency gains will become increasingly important. The widespread use of digital solutions in healthcare is expected to bring significant financial benefits, in addition to qualitative improvements. This is particularly relevant for Switzerland, as several attempts to control high healthcare costs have met with limited success and the shortage of qualified healthcare professionals is becoming increasingly acute. As a result, there is a growing call for the healthcare system to promote digital health solutions, to catch up in electronic data exchange and to finally introduce electronic patient records. 

In the absence of any specific reimbursement mechanism for DTx in Switzerland, manufacturers and platform providers may consider the following alternative payors:  

• Healthcare organisations, such as hospitals or outpatient clinics, that can integrate and offer digital health solutions to their patients as part of their services.  
• Supplementary health insurance providers who would like to offer DTx or other digital health solutions as part of their insurance programme. There are currently a number of digital health solutions that are fully or partially funded by supplementary health insurance schemes and are typically available free of charge to the insured. These applications tend to be indication-specific, for example for cardiovascular disease, cancer or sleep disorders.  

For the manufacturer or the platform provider, a contract with a health insurer offers the opportunity to use its product over a period of time and with a defined population, to optimise processes and to obtain data on the effectiveness, appropriateness and economic efficiency of the digital product. A number of manufacturers have been using this option for several years to test the market acceptance of their products and gain experience with them. There is no official list of these offers and no formalised process for obtaining such funding. 

In order to implement a partnership with a supplementary health insurance provider or a healthcare organisation, it is important to establish a clear and comprehensive contractual framework that covers all relevant aspects, such as pricing, payment terms, service level agreements, data protection, liability, and intellectual property rights.

One possible route to monetisation is direct payment by patients: Offering DTx or other digital health solutions directly to patients who are willing to pay for such products or services. However, patients' reluctance to pay for healthcare services may make this a challenging strategy in Switzerland. 

Alternatively, manufacturers or platform providers can offer “payment by data”: Instead of paying with money, users transmit data to the manufacturer and agree to its processing. The platforms then monetise the data, for example, by reselling it, creating user profiles, or displaying personalised advertising. 

In both cases, it is important to ensure that the data privacy requirements are respected and consumers have given valid consent to the processing of their personal data (see 1c). 

Although the existing tariff systems do not adequately cover the reimbursement of DTx and other digital health solutions, the Swiss health insurance system leaves room for reimbursement in the following constellations: 

• DTx used in conjunction with a medical service. Reimbursement is based on the principle of trust, according to which it is generally assumed that medical services provided by doctors meet the legal requirements of effectiveness, appropriateness, and economic efficiency and should therefore be reimbursed. The amount of reimbursement is determined by the contracting parties. 
• DTx included in the list of means and objects (Mittel- und Gegenständeliste, MiGeL). The list of means and objects determines the reimbursement of products that qualify as medical devices. In order to be reimbursed, the product must have the necessary certifications, be prescribed by a doctor and be used by the patients themselves, or by a healthcare professional as part of a prescribed care service. The list includes products that – as part of a plan, help to detect complications at an early stage, avoid emergency admissions or increase adherence to therapy, thereby improving the success of treatment, such as remote monitoring and applications that transmit recorded data to a monitoring centre or specialist.  

In principle, the list of means and objects is exhaustive. Therefore, only the listed devices are reimbursed by the compulsory health insurance. However, digital health solutions are constantly being improved and enriched with new features. Due to this specificity, reimbursement can be considered even if the product is not included in the list of means and objects. The same applies to the actual treatment costs incurred by the doctor (examinations, diagnoses, adjustments, checks, etc.). These services are reimbursed in accordance with the applicable tariffs for medical services. 

Another way of reimbursing DTx and other digital health solutions is through chronic care models: For example, health insurers can enter into quality improvement contracts with outpatient service providers that include digital health solutions, or they can offer managed care models in which digital health solutions play a key role. 

The compulsory healthcare system in Switzerland does not provide for a specific reimbursement scheme for DTx and other digital health solutions across all tariffs. On 26 September 2022 and in response to a parliamentary question, the Federal Council again rejected the introduction of a new, special reimbursement scheme for DTx, cf. answer to parliamentary question no. 22.7788 by Ruth Humbel, Digital health applications to improve patient safety and cost-effectiveness of 21 September 2022.