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For the third year in a row the challenges facing the UK’s HealthTech industry have continued to grow, the latest sector-wide study has revealed. Following a year marked by regulatory uncertainties and persistent, increasing barriers, the industry, which employs over 150,000 people, finds itself at a critical juncture.

The data, captured by the Association of British HealthTech Industries (ABHI) and CPI, highlight that regulatory concerns continue to cause half of the sector to delay bringing innovations to the UK. Additionally, 30% of companies are not bidding on NHS tenders due to unworkable requirements that are singularly focused on unit price - often below the cost of production - rather than the total value achieved across clinical pathways.

These challenges are compounded by the rollout of the NHS' carbon reduction requirements, which despite being well-intended and having the fundamental backing of the industry, still lack clear guidance and support measures. Costs in regulation, sustainability, freight services, and labour have all risen at pace, almost matching those increases seen in 2023 despite the subsequent fall in inflation. The Medicines and Healthcare products Regulatory Agency’s (MHRA) recently proposed fee increases are set to exacerbate the situation further.

Amidst these issues, there is optimism regarding the Government's commitment to the HealthTech sector as a driver of economic growth. Over 30% of companies surveyed intend to expand their R&D and manufacturing investments in the UK, indicating confidence in future opportunities. Furthermore, the UK is recognised globally for its proficiency in evaluating technologies and fostering a research-friendly environment.

Industry stakeholders are particularly enthusiastic about programmes aimed at addressing these challenges, such as the MHRA’s proposed international recognition framework. This is anticipated to significantly enhance the UK's attractiveness, with four times as many companies favouring it over any other initiative. Survey data support that realising the full potential of HealthTech is possible. Urgent action, however, is required to address the challenges that reduce patient access to lifesaving and life-enhancing technologies and which stifle innovation.

Peter Ellingworth, Chief Executive of ABHI, said, "UK HealthTech is at a crossroads. Regulatory uncertainties and NHS challenges are repeated hurdles that are driving companies, and consequently their technologies, to more receptive markets abroad. There is immense potential if we navigate these challenges wisely, and it is in the interest of the NHS and the patients that our industry serves to correct these trends. Immediate and prompt action is needed. The Government's renewed focus is promising, and with strategic investments and clear policies, we can cement the UK's position as a global hub for HealthTech."

Rahul Kapoor, Director of HealthTech, CPI said: “The 2024 Business Survey highlights the challenging environment faced by the UK HealthTech sector, particularly due to regulatory uncertainty and rising costs. However, it also underscores the strength of our ecosystem, which includes a vibrant community of companies driving innovation and growth. To ensure the sector remains dynamic and exciting, we must provide further support and focus on key areas such as regulatory improvements, NHS procurement processes, and sustainability initiatives.  Furthermore, better communication across the industry facilitated through leadership groups to drill down into specific challenges that can be solved through public-private partnerships would be highly beneficial. This is especially linked to the critical need for more funding to accelerate innovation, which will help grow the UK HealthTech ecosystem as a global hub. This report offers valuable insights into how we can enhance the industry's potential and continue to lead in HealthTech innovation.”

The survey captures data from HealthTech businesses operating in the UK. The full survey report can be accessed here.

Notes

ABHI is the UK’s leading industry association for health technology (HealthTech).

ABHI supports the HealthTech community to save and enhance lives. Members, including both multinationals and small and medium sized enterprises (SMEs), supply products from syringes and wound dressings to surgical robots, diagnostics and digitally enhanced technologies. We represent the industry to stakeholders, such as the government, NHS and regulators. HealthTech plays a key role in supporting delivery of healthcare and is a significant contributor to the UK’s economic growth. HealthTech is the largest employer in the broader Life Sciences sector, employing 154,000 people in 4,465 companies, with a combined turnover of £34.3bn. The industry has enjoyed growth of around 5% in recent years. ABHI’s 400 members account for approximately 80% of the sector by value. www.abhi.org.uk

CPI connects the dots within the innovation ecosystem to make great ideas and inventions a reality to benefit people, places, and our planet. Through our incredible innovation experts and infrastructure, we look beyond the obvious to transform healthcare and drive towards a sustainable future. Within the HealthTech industry, we’re revolutionising health and wellness by transforming ideas into market-disrupting medical devices, wearables, and diagnostics to meet global healthcare needs.

Creating lasting global impact from the North of England and Scotland, we invest in people and disruptive technologies to invigorate economies, create circular supply chains, and make our world a better place. As part of the High-Value Manufacturing Catapult, we facilitate access to world-class organisations to deliver transformation across industries. 

Let’s innovate together: www.uk-cpi.com