Scanadu production backed up, but FDA loophole ready to go

By Brian Dolan

Black ScanaduOver the weekend Mountain View, California-based Scanadu, a well-financed startup building a suite of smartphone-connected medical diagnostic tools for home use, told its Indiegogo supporters that it would delay shipments of its premier Scout device by as long as two or three months. The company began shipping its first set of devices to its earliest backers last week but in the meantime discovered a handful of issues with the Scout and its manufacturing process.

Scanadu explained the problems to their supporters in an email that read: "There are three fundamental issues that led to this decision: 1. The algorithm that connects the investigational devices with the app is inconsistent in reading scans made with the newly manufactured investigational devices. We have identified the issues in the algorithm and are working feverishly to address them. 2. The temperature readings are faulty, but we are in process of identifying the fixes needed to solve this. 3. Finally, the manufacturing tool used to make the investigational devices broke this week after the first few hundred casings had rolled off the line."

Delays for shipments of devices from digital health hardware companies that leverage crowdfunding platforms has become routine. Almost no company has managed to deliver on the time frame it promised during its crowdfunding campaign, which makes the Scanadu delay somewhat expected. That said, Scanadu's co-founder seemed confident last summer that the team would hit its mark. 

“We are in a different situation because we started building the tricorder from the bottom up two years ago, we did not start after our campaign,” Scanadu's CEO and Co-founder Walter De Brouwer told MobiHealthNews last summer. “The device has seen 18 iterations, the industrial design is ready, the algorithms are in place, the manufacturer is secured, the FDA audit trails are operational. For Scanadu this is just the end of the beginning. We did Indiegogo when we were over-ready.”

While Scanadu hasn't managed to distinguish itself via an on-time delivery, the company is trailblazing when it comes to the FDA.

“It’s sold as a research device for investigational use. Everyone who buys it is essentially a researcher in that project,” De Brouwer told MobiHealthNews last May. “I think that crowdsourcing and crowdfunding will give rise to a lot of new ways to look at business, manufacturing, and even legal aspects.”

Last week Scanadu sent its backers online forms and surveys to fill out to be a part of a usability study run by Scripps Translational Science Institute, and for the first time it became clear that not participating in the study meant not getting a Scanadu Scout pre-FDA. (Correction: The original version of this article linked to a previous article about Scanadu's participation in Scripps' Wired for Health study, which is not the same as the Scanadu usability study that Scripps is also running.)

When it first launched its crowdfunding campaign last year, on its Indiegogo campaign page, the company explained to potential backers that:

"With the Scanadu Scout eligible participants will help us by Scouting yourself as part of a research study and giving us feedback to refine the Scanadu Scout. This will happen in the framework of official clinical studies in which you will be invited to partake, ONLY IF YOU OPT-IN."

The company didn't spell out what made a participant "eligible" and it didn't mention that not opting-in meant no Scout.

Here's how Scanadu explained it to its Indiegogo supporters last week -- a few days before it announced the delay. Note that it was much more clear on how participation in the study is required to receive a Scanadu Scout device pre-FDA:

"As you know, the Indiegogo campaign includes participation in our study that is a vital part of our road to FDA clearance. Before we can ship your device, we have to receive a signed informed consent document from you in order to comply with the regulations."

But other messages to backers made clear there is a way out:

"It is entirely your choice, if you decide to take part you can change [your] mind later or [withdraw] from the research study at anytime. If you decide not to sign the informed consent, which opts you into the study, we will ship your unit to you once we have FDA clearance or we will return your investment funds."

Cleverly, Scanadu hints throughout its messages to backers that they can opt-in to the study -- wait to receive their device in the mail -- and then opt-out of the study. That way they get their Scanadu Scout pre-FDA clearance and don't have to participate in the study.

UPDATE: A company spokesperson sent MobiHealthNews a statement via email: "Scanadu is 100 percent committed to complying with all FDA regulations and human subjects protection requirements, and therefore the study participants have the liberty to opt-in or out of the study and may discontinue participation at any time. Scanadu is absolutely not encouraging a loophole – notifying study subjects of their ability to opt out is a regulatory requirement and in no way should be interpreted as a loophole. FDA clearance has been a main priority for us from the very beginning, we're thrilled to begin this next step in the regulatory process."

Following our first report on Scanadu's plans to distribute pre-FDA cleared devices to its crowdfunders, MobiHealthNews heard from other startup founders who wondered how the company would pull it off. While the Scanadu Scout might still be two to three months away from shipping to its early backers, from a regulatory perspective, it appears poised to do so.