Why there is no need for SMEs to turn to the US to launch their innovations

A new study has found that UK healthtech SMEs are increasingly turning to the US as they are struggling to navigate the post-Brexit regulatory process here – but that does not have to be the case, a leading specialist insists.

According to a new report from CPI, up to 24% of UK-based healthtech SMEs are now looking to launch their innovations Stateside and feel there is a lack of support and communication when they attempt to do so in the UK.

A total of 70% of SMEs responded that they had found recent changes in medical device regulations a challenge, particularly in the post-Brexit period and with the UKCA transition still not finalised. 

The study – which questioned over 350 SMEs – concludes that the UK may be losing out on early-stage investment in medical device and healthtech innovation as a result.

However, head of regulatory affairs at InnoScot Health, Elaine Gemmell believes that, while the UK system is not without its flaws, SMEs should not have to look to other parts of the globe unless specifically dictated by their regulatory strategy.

Gemmell said: “These are disappointing findings – and they have some foundation, it must be said – but the UK’s regulatory framework CAN be successfully navigated with the correct guidance. There’s no need to go elsewhere if you have the right expertise to hand.

“Admittedly, going through the US regulatory system has benefits in some cases – for instance, if you have a class I device given that most of those are exempt.

“Having said that, the US system regulated by the Food and Drug Administration (FDA) is based on having a predicate device with substantial equivalence, which is fine if you have a predicate, but the very nature of a UK SME’s device being new and novel may mean a predicate does not exist which would instead require Premarket Approval (PMA). That option is likely to incur significant costs in the order of  hundreds of thousands of dollars.”

While the CPI report notes the UK’s sustained excellence in research, it suggests that the infrastructure for commercialisation needs to be improved upon – a situation that is resulting in UK inventions being commercialised by companies from other countries.

Gemmell added: “Pre-Brexit, when there was a more straightforward European regulatory route, a compelling argument existed for similar market penetration in countries, including non-EU ones, that would accept CE marking. With the UK now ‘going it alone’ outside of the EU, it is quite difficult to make that argument and the extra complexity that resulted has not helped matters.

“At the same time, I am hopeful that the UK situation will improve soon, but in the short-term, SMEs should be able to achieve a lot, or all, of what they want by tapping into trusted, localised regulatory expertise that helps them overcome ever-changing regulation frameworks, and without investing precious resources elsewhere.”