Expert commentary/HealthTech

10 min read

Same AI model, different product:where wellness ends and MedTech begins.

“Tracks how sleep affects your recovery” and “diagnoses sleep apnea” may sound like two features built around the same technology. But to regulators, they can mean two completely different products — with different consequences if something goes wrong, and different requirements for data, development and validation. Using real-world cases from WHOOP, Owlet, Natural Cycles and other HealthTech/MedTech companies, we look at how just a few words in your claims can change a startup’s entire trajectory, and what founders should think about before they even start building.

Two halves of the same sphere: a lime wellness side and a silver MedTech side

Expert commentary

The expert is the head of a technology company with extensive experience developing digital healthcare products for a leading market, including projects for major hospitals and healthcare organizations. The company has delivered several hundred projects in HealthTech. The expert requested to remain anonymous.

Contents

01WHEN VALIDATION MATTERS

When wellness needs clinical evidence

Clinical validation is rarely a natural growth stage. It's usually the result of a strategic shift. We see this pattern with our clients again and again: the product grows, users are happy, and at some point the team realizes the next stage of growth has to go through the healthcare system.

Usually one of three things happens, often all of them at once.

  • The startup changes what it promises. While the product “helps you keep track of your wellbeing,” user metrics are enough. Once the startup wants to say “detects,” “reduces risk,” or “helps treat,” that's a medical claim, and it has to be proven.
  • The startup changes who pays. Users pay for what they enjoy. Clinics and insurers pay for outcomes: fewer hospitalizations, lower cost of care, less load on physicians. Engagement isn't an argument for them. They need clinical and economic evidence.
  • The startup hits the ceiling of the consumer market. Wellness is crowded and loyalty is low. The only way to become part of care itself — a physician's recommendation, a clinical protocol, an insurer's program — is through evidence. Once you have it, it becomes a serious competitive moat.

One more thing I always emphasize: clinical validation and a regulatory pathway are not the same thing. Many products need evidence of effectiveness but don't need to be cleared as medical devices. And the reverse is also true: regulatory clearance on its own doesn't guarantee sales.

02SAME MODEL, NEW RULES

Same model. Different consequences.

Regulators don't evaluate the technology. They evaluate what you promise and what happens if you're wrong.

If a product misreads a sleep phase, that's an inconvenience. If it misses a risk of sleep apnea or arrhythmia, someone might not see a doctor. So in the second case the model is judged very differently. “Average accuracy” stops mattering much.

What matters is how many cases the model misses, how many false alarms it raises, and how it performs across different patient groups. You need data with clinically confirmed labels, clear provenance and proper patient consent, plus an independent test set the model has never seen.

Data collected in a wellness app is usually not fit for this. We run into this regularly, when clients come to us with a large dataset expecting to build on it.

The development process changes too. Risk management, a formal software lifecycle and a quality management system come in, and every requirement has to be traceable to code and to tests.

For AI teams the most painful discovery is usually that you can no longer retrain the model whenever you like. Every significant change has to be validated, and in the US there's a dedicated mechanism for this: a predetermined change control plan agreed with the FDA in advance. Even the interface becomes part of safety. It matters how the result is shown and what the person does next.

03CLAIMS IN PRACTICE

A few words change the product’s path

A claim isn't only what's written in the regulatory submission. It's your website, your App Store description, your ads, even the results screen. Regulators look at all of it together.

A few telling examples:

CASE / 01

WHOOP

The FDA's January 2026 update of its general wellness guidance, prompted in part by last year's warning letter to WHOOP over its blood pressure feature. The FDA relaxed its approach. Non-invasive wearables that estimate blood pressure, glucose or oxygen saturation can now qualify as wellness products, but only as long as they don't reference a disease.

The guidance draws the line through paired examples: “see how your sleep patterns affect your recovery” is wellness, “diagnose and monitor your sleep apnea” is a medical device. That's the whole question in a single sentence: same sensor, same model, different claim, completely different product.

CASE / 02

Owlet

Owlet, a smart sock for monitoring infants. In 2021 the FDA issued a warning letter saying that the heart rate and oxygen notifications made the product a medical device. The company had to pull it from the US market and go through a full regulatory pathway. The medical version, Dream Sock, was only authorized at the end of 2023. Almost the same technology, but the difference in the claim cost two years.

CASE / 03

Natural Cycles

Natural Cycles, a contraception app. Even with EU certification and FDA De Novo authorization, the UK advertising regulator banned an ad that called it “highly accurate.”

Even after regulatory approval, a claim has to stay in line with what the data actually shows.

04BEFORE YOU BUILD

What to plan before you start building

And in what order:

  1. Start with research, not with the product.

    This is not the place to cut corners. Look at the regulatory landscape in every region you might eventually enter, because the rules differ a lot. The US has the FDA and its own wellness boundary. Europe has the MDR, which classifies software more strictly. Germany has its own DiGA system with reimbursement from statutory insurers.

    Look at which comparable products have already been cleared and with what intended-use wording — in the US, FDA databases make this public. Talk to potential buyers, clinics and insurers, about what they would pay for and what evidence they'd need. And get advice from a regulatory specialist. A couple of consultations early on cost a fraction of fixing a mistake later.

  2. Then choose a direction.

    You don't need a detailed multi-year plan — nobody plans that way today, and that's fine. But you do need to answer honestly: do we want to keep the option of becoming a medical product? That should be a conscious decision, not an accident.

  3. Be careful with wording from day one.

    Marketing shouldn't promise medicine before the company is ready to prove it. Otherwise, as the examples above show, someone else will decide what your claim is.

  4. Collect data with the future in mind.

    That means consent that allows research use, clear data provenance, and versioning of datasets and models. It costs almost nothing if you build it in early and is almost impossible to reconstruct later.

  5. Separate the future medical part in the architecture.

    If medical logic is spread across the whole app, the whole product ends up regulated. If it lives in a dedicated module, only that module is. At our company we always design for this when we see even a hypothetical medical trajectory for a client.

  6. Build lightweight documentation habits.

    Not a full quality system from day one, just basic engineering hygiene: requirements, decisions, risks and tests are recorded and linked to each other. Teams that already work this way find the transition much easier, and not only technically.

05WHAT GETS REBUILT

What usually has to be rebuilt

In more detail, here's what usually has to be rebuilt if you didn't plan for the medical pathway from the start:

  • Data without the right consent or without clinical labeling.
  • Architecture you can't carve the regulated part out of.
  • Security and compliance: HIPAA, GDPR, audits, data processing agreements — a clinic or insurer will ask about these before they ask about your AI. Trust around data is under growing scrutiny: in July 2026 the FTC sued telehealth company Hims & Hers, alleging it shared users' health information with advertising platforms despite promising privacy.
  • Integrations: physicians won't work in a separate app, so the product has to fit into their systems and their workflow.
  • Evidence: engagement metrics have to be replaced with studies of outcomes and economic impact.

06APPROVAL ≠ REVENUE

Regulatory clearance doesn’t guarantee sales

I want to single out the business model, because in our experience it's one of the most problematic parts. HealthTech products are often built by people with a scientific or medical background. They know their field brilliantly, but have less experience with long B2B sales cycles, negotiating with payers and building a reimbursement model.

The market has plenty of examples of companies that got through the regulatory process and still didn't survive.

CASE / 01

Pear Therapeutics

Pear Therapeutics received the world's first FDA clearance for a prescription digital therapeutic in 2017 and went bankrupt in 2023 because insurers never broadly started paying for its products.

CASE / 02

Better Therapeutics

Better Therapeutics received FDA authorization for a type 2 diabetes app and shut down less than a year later, running out of money before payers made coverage decisions.

CASE / 03

Akili

Akili moved from prescription to over-the-counter after weak sales and sold its assets in 2024.

CASE / 04

DiGA

In Germany, roughly 20% of apps that entered the DiGA system have since been removed, some because they couldn't demonstrate a positive care effect within the trial period.

That's why I always advise having advisors or partners who have done this before. This is the area where learning from your own mistakes is simply too expensive.

07COSTLY MISTAKES

The Most Expensive Mistakes When Moving from Wellness to MedTech

Data, studies, product architecture and processes are difficult to rank because in practice they can't be separated. The data shapes the study design, the study depends on the architecture, and the documentation describes the processes. If one link is weak, you end up rebuilding the whole chain.

If I had to prioritize, this is how I'd rank them:

  • The most expensive in money and time is clinical studies. Recruiting patients, working with clinical sites, ethics committees. It takes months, sometimes years, and you can't speed it up with more engineers.
  • The most underestimated is retrofitting. When a product was built without formal processes, you have to reconstruct traceability, re-validate modules and rebuild documentation. More than once we've seen with clients that rewriting the regulated part from scratch was cheaper than “documenting what's already there.”
  • The most strategically dangerous is choosing the wrong intended use. A claim that's too broad means a higher risk class, expensive studies and a long pathway. One that's too narrow doesn't sell. This mistake costs more than any other, because everything else gets built around it: the study design, the architecture, the documentation.

And it's important to remember that regulatory clearance isn't the finish line. After it comes post-market monitoring, incident handling and re-validation with every significant model update. That's an ongoing operational load, and it has to be part of the company's model just like the market launch itself.

The way I'd put it: in HealthTech, regulation isn't a barrier at the end of the road, it's a way of designing the product.Companies that treat it as an architectural constraint from the very beginning get through this journey several times faster and cheaper than those who leave it for later.