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Cortex - Life Sciences Insights

| 5 minutes read

ESG Issues: Clinical Trials and Diversity (Racial Bias in Medical Technology)

ESG is increasingly a primary focus for companies and consumers alike.  Across all industries, companies are under immense scrutiny from consumers and investors seeking to spend or invest their money in corporations that align with their values.  The life sciences sector is no exception to this rule: for example, lack of diversity in clinical trials has long been recognised as an issue hindering true innovation and equal access to new medicines, therapies and technologies.  However, the rise of the ESG movement has now made this issue a policy priority for regulators, such as the Food and Drug Administration (FDA) and the Therapeutic Goods Administration (TGA), which has caused life sciences companies around the world to re-evaluate their clinical trial protocols and incorporate measures into all aspects of the design and development of new therapeutic goods to meet their ESG obligations.

There is no clearer example of the need for diversity in clinical trial patient populations than the pulse oximeter.  The COVID-19 pandemic saw the pulse oximeter become a household and emergency department staple.  This is because pulse oximeters help determine whether COVID-19 patients have developed hypoxemia (abnormally low blood oxygen levels) and silent hypoxia (the puzzling phenomenon where one could be found to have life-threateningly low oxygen levels in their bodily tissues and blood, without displaying any signs of respiratory distress).  Based on the results of these pulse oximeter readings, hospitals could more effectively triage patients and provide supplemental oxygen during a time of limited resources.  However, recent studies have shown that these devices are more likely to overestimate oxygen levels in people with darker skin, failing to correctly detect fatal hypoxemia and hypoxia in many marginalised groups.[1]

Pulse oximeters measure the absorbance of red and infrared light, which is transmitted through tissue to ascertain oxygen concentration.  Yet, as research studies have pointed out, the melanin in skin – which is present at higher levels in people with darker skin – absorbs some of the light transmitted by the device, thereby impacting the accuracy of the readings.[2]  In fact, it was found that hypoxemia is three times more likely to go undetected in Black patients, with further studies showing that patients with darker skin and less accurate pulse oximeter readings received less supplemental oxygen and delayed access to treatment.[3]

So how did the racial discrepancies in the accuracy of pulse oximeters go largely unnoticed for so long?  The problems stem from the lack of diversity in the original clinical trials.  In its early years of use, the clinical testing of pulse oximetry mainly involved white patients and it was only once the findings of a 2005 study revealed the positive bias evident in darker skin pigmentation that the inaccuracy became known.[4]  Yet despite the issues having been known since 2005, there was little public discussion and little regulatory action requiring corrective measures to address the racial bias inherent in this potentially life-saving medical technology until the COVID-19 pandemic and the surge of public awareness (and criticism) of ESG issues in the life sciences industry. 

In December 2022, an omnibus spending bill (Public Law 117-328) was enacted by US Congress, requiring diversity action plans for the clinical trials used by the FDA in their assessments. This codified into law aspects of draft guidance issued by the FDA in 2020 and 2022 on enhancing the diversity of clinical trial populations through broadening eligibility criteria and adopting more inclusive enrolment practices, including a recommendation that sponsors submit a Race and Ethnicity Diversity Plan to the agency early in clinical development.  Further information on FDA regulatory incentives to promote diversity in clinical trials can be found in our previous publications here and here.  

Further, in the European Union (EU) in 2022, the European Medicines Agency (EMA) launched its “Accelerating Clinical Trials in the EU (ACT EU)” initiative,[5] with one of the objectives being to engage stakeholders to proactively adopt a more inclusive and patient-centric approach in their clinical trial designs.  The EU also implemented the Clinical Trials Regulation, which explicitly requires the justification of non-representative clinical trials (for further information, see our previous articles here and here).

Similarly in Australia, the TGA published guidelines in June 2022 on the clinical evidence requirements for medical devices,[6] and listed medicines,[7] stating that they should be representative or capable of being reasonably extrapolated to the general Australian population.  Regardless, in a global context where applications for inclusion or registration of therapeutic goods on the Australian Register of Therapeutic Goods (ARTG) will almost certainly rely on the same clinical trial data relied upon in applications to the FDA and EMA, Australian sponsors will have to consider those ESG issues, such as the diversity of study participants, mandated in Europe and the US in their clinical trial design.  

For the life sciences sector, the growing regulatory focus on ESG concerns in the design and development of new medical products means that companies must be able to justify, for example, the diversity (or lack thereof) of their clinical trials, and demonstrate that their therapeutic goods are non-discriminatory.  Importantly, even where regulators do not expressly mandate particular ESG requirements, or where the risk of enforcement is low, the broader public is undeniably becoming more conscious and vocal about ESG issues, and companies that fail to adequately address those issues risk reputational damage and, potentially, product liability class actions.

For more information on the legal and regulatory requirements of clinical trials around the world, see our Cross-border Guide to Clinical Trials and Privacy.



[1] ‘Pulse Oximetry May Be Inaccurate in Patients with Darker Skin’, American Journal of Nursing (article) <,of%20patients%20with%20dark%20skin>.

[2] John R. Feiner, John W. Severinghaus and Philip E. Bickler, ‘Dark Skin Decreases the Accuracy of Pulse Oximeters at Low Oxygen Saturation: The Effects of Oximeter Probe Type and Gender’, Anesthesia & Analgesia (article) <>.

[3] Usha Lee McFarling, ‘Pulse oximeters and their inaccuracies will get FDA scrutiny. What took so long?’, STAT News (online) <>.

[4] Philip E. Bickler and John R. Feiner, ‘Effects of Skin Pigmentation on Pulse Oximeter Accuracy at Low Saturation’, Anesthesiology (article) <>.

[5] ‘Accelerating Clinical Trials in the EU (ACT EU): for better clinical trials that address patients’ needs’, European Medicines Agency (online) <>.

[6] ‘Clinical evidence guidelines for medical devices’, Therapeutic Goods Administration (online) <>.

[7] ‘Listed medicines evidence guidelines’, Therapeutic Goods Administration (online) <>.


esg, diversity, inclusion, sesg, clinical trials, pharmaceuticals, healthtech, litigation, covid-19, vaccine, asiapac