FDA AI Deregulation: What Medical Device Founders Need to Know

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On January 6, 2026, FDA published revised final guidance on general wellness products and on clinical decision support (CDS) software, replacing versions from 2019 and 2022. Commissioner Marty Makary announced the changes at the Consumer Electronics Show, presenting them as cutting unnecessary regulation for AI and digital health. They are guidance documents, not executive orders or device reclassifications, and for founders and investors the details of what they changed, and what they left alone, matter more than the headlines.

As a physician who reviews AI-enabled devices for investors, I see real opportunity in these changes, and real risk in misreading them.

What Changed

1. General Wellness Products

The revised general wellness guidance says non-invasive wearables that estimate physiologic parameters, such as heart rate, heart rate variability, blood pressure or blood glucose, can be general wellness products when they are intended solely for wellness uses and make no medical claims, such as screening for, diagnosing or monitoring a disease. Notifications must not name a specific disease or describe an output as abnormal, pathological or diagnostic. Invasive products fall outside the policy; one of FDA's examples is a glucose product using microneedles that penetrate the skin.

The shift is visible in enforcement. FDA sent WHOOP a warning letter on July 14, 2025 over a blood pressure feature; after WHOOP modified the feature and its labeling, and consistent with the January 2026 guidance, FDA closed the matter in June 2026. See our article on software misclassification.

2. Clinical Decision Support Software

The revised CDS guidance addresses when software that supports health care professionals falls outside the device definition. Its most significant change is that FDA will exercise enforcement discretion for software that gives a single recommendation where only one clinically appropriate option exists, provided the health care professional can independently review the basis for it; FDA had previously treated software delivering a single recommendation as a regulated device function. The guidance also removed earlier language that treated risk scores and risk probabilities as device functions, allowing them under certain conditions, and expects developers to give health care professionals clear information about how the software works.

What Did Not Change

• Disease claims: products intended to diagnose, treat or mitigate disease still need FDA review
• Invasive and implanted products: they remain outside the general wellness policy
• Unreviewable recommendations: software whose recommendations a health care professional cannot independently review remains a device function
• Quality systems: since February 2, 2026, device manufacturers have been subject to FDA's Quality Management System Regulation (21 CFR Part 820), which incorporates ISO 13485:2016 by reference
• Post-market obligations: adverse event reporting and recall requirements continue for devices
• Predetermined change control plans: FDA's final guidance on PCCPs for AI-enabled device software, first issued in December 2024, remains the route for having planned model updates reviewed with the original submission; a PCCP is optional, not required

Strategic Implications for Medical Device Companies

For Early-Stage Startups

The revised guidances sharpen a strategic choice:

Strategy	Pros	Cons
Go Wellness First Launch with wellness claims, expand later	Faster time to market Lower regulatory costs Generate real-world data	Limited reimbursement Harder to move to clinical claims Competitive moat questions
Pursue Full Clearance 510(k) or De Novo from the start	Defensible market position Reimbursement pathways Clinical credibility	Longer timeline to market Higher upfront costs May be more than the market needs
Hybrid Approach Wellness launch with a parallel regulatory submission	Revenue while pursuing clearance Real-world evidence generation Flexibility	Complex regulatory strategy Labeling constraints Higher total cost

For Growth-Stage Companies

Companies with existing FDA clearances can consider:

• Planned updates: whether a PCCP could cover planned model changes
• Adjacent wellness products: whether a wellness product line can be kept clearly separate from cleared products in its claims and labeling
• International strategy: the EU applies its own rules under the MDR, and US guidance changes do not carry over; see our EU MDR update

For Investors

Due diligence can now include:

• Whether the company's regulatory position depends on guidance that FDA could revise
• Whether claims, labeling and app notifications stay within the wellness or CDS policy the company relies on
• Whether "wellness" positioning limits reimbursement or exit options
• How the guidance changes affect competitive moats
• International regulatory pathway viability

The Clinical Perspective

From a physician's standpoint, the changes cut both ways. Lighter oversight can bring useful tools to patients and clinicians sooner; unvalidated software can also mislead clinical decisions. The CDS policy keeps a health care professional's ability to review the basis for a recommendation at its center, which makes that transparency a practical diligence question rather than a formality.

What to Watch

• How FDA applies the revised guidances in warning letters and closeouts
• Further FDA guidance on AI-enabled device software
• Adverse event reports or safety communications involving wellness wearables or CDS software
• Any revision of the guidances themselves