China’s Generative AI Measures Could Affect Life Sciences Companies That Make Apps

Those medtech companies which embed AI into an app allowing healthcare professionals or patients to ask questions and to receive a response will probably need to comply with China’s new Interim Measures for the Management of Generative Artificial Intelligence Services (the “Measures”). Lianying Wang explains.

The Measures, which came into effect on August 15, 2023, aim to unite different policy objectives. On the one hand, the Chinese government wishes to avoid the risk of any harmful content being generated by AI and distributed. But on the other hand, it wishes to advance AI technology in China and to keep ahead of global competitors in this space.

The new Measures are only intended to regulate companies that provide generative AI (GAI) services to the Chinese public. As such, they are more likely to impact tech driven companies than life sciences companies. Although no definition of what constitutes a public service has so far been provided, it seems reasonable to assume that a life sciences company which only makes a licensed GAI available internally for use by its employees will not be subject to the new Measures.

However, if employees of a life sciences company produce a GAI where members of the public can converse, then this is likely to fall within the scope of the new Measures. For example, if a medtech company embeds GAI into an app which allows healthcare professionals or patients to ask questions or input content and to receive a response, this will probably need to comply with the new Measures. However, a pharma company which uses a basic chatbot to respond to questions from patients or healthcare professionals – providing answers by using keywords to select a pre-drafted response from a database – is unlikely to fall within the remit of the new Measures because it is not offering a sophisticated GAI service.

A situation in which a company uses GAI to create something that will be distributed to customers or patients, but edits and reviews this content before it is seen by members of the public, is currently a grey area. Arguably, such a company is simply using the technology internally to assist the work of its staff. However, it might also be possible to argue that it is providing a service to the public using GAI in certain circumstances, especially if there is no adequate and meaningful human review of the GAI-created content.

Even if a pharma or medtech company is using GAI internally in a way that does not cause it to be subject to the new Measures, any development, use, or licensing of GAI will still make it subject to many existing and emerging Chinese regulations, such as the Personal Information Protection Law (2021) and the Measures for Science and Technology Ethics Reviews (for Trial Implementation) (2023). Any company using GAI internally in China will therefore need to undertake a comprehensive review of any data processing activities and potential ethical risks, including issues around consent by data subjects using the GAI.

Life sciences companies whose activities do fall under the ambit of China’s GAI Measures will need to comply with a set of strict compliance obligations. These may include registering their algorithm with and undergoing a security assessment by the Chinese authorities. After completing the registration and the security assessment, they will be permitted to offer services to the public in China, but will need to comply with a set of ongoing obligations, including protecting privacy and intellectual property rights, monitoring and filtering illegal contents, accepting and handling complaints, and so on.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.