Is the Regulatory Innovation Office What UK HealthTech SMEs need?

Today's announcement by Department for Science, Innovation and Technology (DSIT) on the launch of the new Regulatory Innovation Office to reduce red tape and expedite access to cutting-edge technologies like AI in healthcare is a significant step forward for the UK HealthTech ecosystem. This initiative aligns well with the findings and needs identified through CPI's Health Technology Regulatory and Innovation Programme (HealthTRIP), particularly in addressing regulatory uncertainty and the challenges faced by SMEs in the HealthTech sector.

Regulatory uncertainty and SMEs in HealthTech: Key insights from the HealthTRIP programme

The HealthTRIP programme, funded by Innovate UK in 2022, has been instrumental in supporting the UK's SME HealthTech community. It provided non-dilutive grant funding, regulatory training, and a roadmap for sectors like in vitro diagnostics (IVD).

A recurring theme identified throughout the programme was the difficulty SMEs face in navigating regulatory pathways, which is often compounded by the complexity and uncertainty surrounding medical device regulations. In this programme, CPI and our partners ABHI engaged with over 350 SMEs to understand their challenges and highlight opportunities for interventions that would support their growth and help to accelerate health technologies to market. 

One of the major factors that was found to stifle innovation was regulation, from the regulatory changes (such as MDD/IVDD to MDR/IVDR) and the uncertainty around UKCA, as well as delays experienced when engaging with approved bodies or notified bodies, SMEs were finding regulation to be a real barrier to brining life saving devices to market quickly. Any government interventions which seek to reduce the burden of “red tape” especially in new and novel technology areas that do not fit within existing regulatory processes will be beneficial to the innovative UK HealthTech ecosystem.

The HealthTRIP programme found the following to be the main challenges in the industry:

 1. Lack of regulatory guidance

SMEs consistently highlighted their struggle with understanding which regulatory steps to take and at what point during the product development lifecycle. For many, there was a lack of clear, accessible regulatory roadmaps, which hindered their ability to develop, scale, and bring products to market. The complexity is especially pronounced for those working with emerging technologies such as digital health tools, AI-driven diagnostics, and novel medical devices

 2. Delays and costs of regulatory approval

HealthTRIP research revealed that capacity issues with regulatory bodies and a lack of conformity assessment providers led to significant delays and bottlenecks. For instance, gaining CE or UKCA marking has become a protracted and expensive process, driving many SMEs to seek regulatory approvals abroad, where processes are faster and more cost-effective. Delays in regulatory approvals were identified as one of the primary factors stalling innovation, with many companies reporting extended wait times and escalating costs for clinical testing and validation.

 3. Capacity and skills shortages

The programme also identified shortages of in-house regulatory expertise within SMEs. Many relied on external consultants, which can be prohibitively expensive, further complicating the process. Moreover, regulatory capacity in the UK remains insufficient to meet the growing demand, particularly for fast-evolving sectors like AI and data-driven healthcare.

 4. The growing appeal of overseas regulatory frameworks

Due to these challenges, an increasing number of UK-based SMEs are looking towards the USA and FDA pathways as a faster, more predictable route to market clearance, especially through the 510(k) system, which can deliver relatively fast approvals. This shift has resulted in a risk of UK innovations being commercialised abroad rather than benefiting the UK’s healthcare system and economy.

The Regulatory Innovation Office: A timely intervention

With today’s announcement of the Regulatory Innovation Office, the UK government is directly addressing several of the regulatory challenges that have been highlighted by the HealthTRIP programme. This new office is expected to streamline processes, reduce the burden of compliance, and offer clearer, faster routes to market, thus accelerating innovation in critical areas like AI and HealthTech.

The announcement of the RIO today discusses at a high level how novel technologies such as artificial intelligence and digital technologies in healthcare are cross-cutting novel technolgies that do not fit neatly into existing regualtory frameworks leading to delays getting them into market.  Although there are not many specific details on how the RIO will work, DSIT do mention that the new office will work closley with other relevant Government departments such as the Department of Health and Social Care as well as bring together regulators to attempt to remove obstacles.

However, we make the following suggestions for the RIO as it is developed and implemented:

1. Single front door for support:- One of the major challenges for SMEs is the fragmented nature of regulatory support. The new office could to centralise and simplify access to regulatory advice, offering what could become a "single front door" approach, which was also a key recommendation from HealthTRIP findings. Such a unified advisory service will help companies navigate complex and often overlapping regulatory requirements. This is especially needed in the digital health sector.

2. Clearer regulatory pathways:- Technology development in regulated sectors needs clear defined routes for regulation so that SMEs developing the technology know what they need to do next and how long (and potentially how much money) it’s going to take them.  One of the main findings of HealthTRIP is that SMEs need a defined regulatory roadmap and without it they struggle to know what to do next and also find that this lack of clarity could be a barrier to investment in the UK.  Developing regulatory pathways within the RIO that support novel technologies such as AI in healthcare should signifcantly support the UK digital health ecosystem.

 Conclusion: Driving innovation and reducing regulatory barriers

 The launch of the Regulatory Innovation Office is potentially a game-changer for SMEs in the UK HealthTech ecosystem. If implemented correctly I expect it will also encourage the growth of AI and other digital health technologies by providing clearer, faster, and more efficient pathways to market.

 This initiative marks an essential step towards achieving the vision set out by HealthTRIP: to enable the UK to become a global leader in HealthTech, with SMEs at the forefront of delivering life-saving technologies to both the UK and international markets.

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