The UK’s soaring cost to do business risks restricting patient access to lifesaving HealthTech.
The warning comes after a survey from the Association of British HealthTech Industries (ABHI) reveals that the financial burden on businesses, compounded by the National Insurance Contributions (NIC) rise, is becoming unsustainable, threatening the sector’s ability to innovate and invest in the UK market.
The survey findings paint a stark picture of the financial strain facing HealthTech companies. Seventy percent of respondents reported significant cost increases, with half of businesses anticipating annual rises above £100,000 and larger organisations seeing impacts as high as £3.3 million. These rising costs are forcing three-quarters of companies to reduce or delay hiring, while nearly half are adjusting employee benefits. Additionally, close to 50% of businesses are being pushed to consider price increases, despite the NHS’s steadfast resistance to higher costs.
The added burden of additional NIC comes on top of rising regulatory fees, such as the proposed £16.5 million annual MHRA fee increase, and growing compliance costs that could exceed £30 million industry-wide. Small and medium-sized enterprises (SMEs), which make up 90% of the HealthTech sector, are bearing the brunt of these pressures, creating what ABHI warns is an unsustainable situation.
Peter Ellingworth, Chief Executive of ABHI, said: “The HealthTech industry is at a tipping point. These compounding financial pressures and significant regulatory cost increases, both now and predicted for the future, coupled with the complexity of NHS procurement processes, are driving companies to question the viability of sustaining operations in the UK. Additionally, the failure to yet fully grasp the opportunity for pragmatic regulatory reliance and recognition routes with other key markets is adding to these challenges. If urgent action is not taken, we risk losing innovative technologies to more receptive international markets and would fail to capitalise on the opportunity for foreign direct investment.”
The NHS, as the primary customer for most HealthTech companies, adds further strain through complex procurement models that prioritise unit cost over value, a dynamic that has already driven products out of the UK market. Despite these challenges, HealthTech has the proven ability to transform care pathways, enhance efficiencies, and deliver more sustainable healthcare solutions over the long term. These benefits underscore the economic rationale for prioritising HealthTech as a driver of both patient outcomes and system-wide sustainability.
Yet the growing mismatch between government ambitions and industry realities is undermining confidence in the UK as an attractive market for HealthTech investment and innovation.
Source: ABHI
Date: 6 January