The FDA's Next Move Is Coming — Here's What EU MedTech Companies Should Stress-Test Right Now
Explainability is now the gating condition for staying outside FDA device regulation. EU MDR/IVDR companies have a structural advantage — if they use it correctly.
By Paal Selnaes, Norseman Projects Ltd
Two months after Commissioner Makary's CES announcements on AI wearables and clinical decision support, the picture is settling — though not simplifying. The January guidance was not a deregulatory endpoint. It was the opening move in a larger repositioning of how the FDA intends to govern AI-enabled health products. European companies that read it correctly have a window to act.
The Three-Pronged Framework — and the Part Everyone Missed
Makary telegraphed the FDA's direction explicitly: a full AI regulatory framework built proactively, not reactively. Media coverage landed almost entirely on the first component, which is the least strategically important for sophisticated players.
Deregulate Low-Risk Products
General wellness exemptions for wearables and non-clinical AI. Covered extensively. Already priced in by the market.
Shift to Post-Market Monitoring
Real-world performance data replaces premarket review as the primary accountability mechanism for AI products.
Anticipate Future AI Products
Guidance designed to govern products that don’t exist yet — transparency and explainability are the durable requirements, not specific technical standards. This deserves far more attention than it is getting.
When regulators commit to forward-looking frameworks, the companies that shape early positioning — through demonstrated transparency, clinical evidence rigour, and post-market infrastructure — define what “compliant” looks like when the formal rules arrive.
The Sleeper Issue: Explainability Is Now the Gating Condition
Most coverage focused on what companies no longer have to do. Underreported is what they now need to get right as a direct consequence of that exemption.
⚡ The Transparency Requirement
The 2026 guidance places explicit emphasis on transparency regarding data inputs, underlying logic, and how recommendations are generated — particularly for algorithmic and AI-driven tools. This reflects sustained FDA attention to automation bias and how clinicians and end users actually interpret AI outputs. Explainability is no longer a differentiating feature. It is the condition for remaining outside device regulation.
For European companies operating under MDR/IVDR — where rigorous technical documentation, clinical evaluation reports, and algorithmic transparency are embedded in the conformity process — this is familiar ground. For US-native startups that moved fast under the wellness exemption, it is a new muscle to build under commercial pressure. That asymmetry matters.
Post-Market Surveillance: The Burden Has Migrated, Not Disappeared
The FDA's guidance is explicit: companies should gather and analyse real-world performance data on an ongoing basis, document corrections, and maintain this discipline particularly where a Predetermined Change Control Plan (PCCP) is in place. The regulatory burden has not been reduced — it has shifted downstream, from premarket review to continuous post-market performance monitoring.
EU MDR/IVDR companies already have mature PMS plans, PSUR requirements for Class IIa and above, clinical evaluation reports, and ISO 13485 change control embedded in their QMS. US-native wellness-category entrants now need to build this infrastructure from scratch, under market pressure, while simultaneously shipping product. That is a meaningful structural disadvantage for the US cohort — and a meaningful structural advantage for European companies that treat their existing documentation as a commercial asset rather than a compliance overhead.
| Capability | EU MDR/IVDR Companies | US Wellness Entrants |
|---|---|---|
| Algorithmic transparency | Existing infrastructure, built for conformity | Needs to be built from scratch under pressure |
| Post-market surveillance | Mature PMS plans; PSUR for Class IIa+ | No formal requirement previously — building now |
| Clinical evidence base | Clinical evaluation reports, auditable trail | Typically informal or absent for wellness products |
| Change control | Embedded in QMS under ISO 13485 | PCCP framework is new; implementation varies widely |
| Readiness for CDRH guidance | Positioned to move fast when it drops | Catching up while also shipping product |
📡 Next Regulatory Signal to Watch
CDRH has signalled it will reissue its Device Software Functions guidance in 2026. This has the potential to expand the non-device perimeter significantly — meaning more product categories could exit the formal regulatory pathway entirely. Companies with their evidence and transparency documentation already in order will be positioned to move immediately. Those building that infrastructure after the fact will be catching up while competitors act.
What EU MedTech Companies Should Stress-Test Now
Claims architecture audit
Does every product feature have a documented, defensible classification as wellness or clinical? Where is the boundary, and who owns it internally?
Explainability documentation review
Can you produce a clear, non-technical account of what data inputs drive each AI recommendation? Is this documented in a format that US buyers and channel partners can rely on?
PMS programme US applicability
Is your existing EU post-market surveillance programme structured in a way that satisfies FDA’s emerging real-world data expectations? Where are the gaps between your current PSUR cycle and what the FDA’s framework will require?
PCCP readiness
If your AI product evolves post-launch — and it will — do you have a Predetermined Change Control Plan that documents how updates are evaluated and controlled?
Competitive positioning refresh
Are you actively using your MDR/IVDR credentials as a commercial differentiator in US sales conversations, or treating them as a compliance artefact that lives in a Quality folder?
The companies that will benefit most from the FDA's direction of travel are not those that moved fastest under the wellness exemption. They are the ones that treat regulatory intelligence as a strategic input — and have the documentation infrastructure to match their positioning claims when buyers, insurers, or the next guidance update require them to.
Need a tailored market-entry or regulatory strategy?
We help European technology companies translate complex U.S. and Canadian regulatory pathways into executable plans — from FCC and PTCRB through FDA and ITAR/EAR.