Health Technologies

Innovation at the heart of UK medtech strategy

The UK Department of Health and Social Care has recently published the government’s first ever medical technology strategy in an effort to accelerate access to innovative technologies.

The strategy document identifies steps that need to be taken so that patients can access technology through the National Health Service (NHS) to accelerate diagnosis, treatment and delivery of care, freeing up clinician time.

The strategy seeks to build on the learnings from the COVID-19 pandemic and the rapid development of new medical technologies over that period with the aims of ensuring that the right product is available at the right price and in the right place.

Medtech is a vital UK industry

Statistics presented in the report highlight that total healthcare expenditure in the UK accounted for 12.0 per cent of gross domestic product (GDP) in 2020, compared with 9.9 per cent in 2019.

Medtech comprised a significant amount of the total expenditure with the NHS alone spending an estimated £10 billion a year on medtech products such as implants and prosthesis, wound dressings, syringes, surgical equipment, cardiac pacemakers and medical imaging devices.

Other key facts and figures:

  • The UK medtech industry has an annual turnover of £27.6 billion and provides 138,100 UK jobs;
  • Exports over £5 billion of products annually;
  • Comprised of 4,190 UK businesses, over 85 per cent of which are SMEs;
  • Medtech represents 31 per cent of all turnover in the UK life sciences sector.

Medtech Innovation and IP

One important aim of the strategy is to encourage innovative research and attract investment for the UK economy.

In 2021, there were around 60 different research programmes supporting innovative technologies representing over £1 billion of funding.

Innovators can reap the rewards of R&D investment by acquiring and exploiting intellectual property (IP) to safeguard their ideas and developments.

A useful proxy for innovation is therefore the volume of patent applications and other IP filings derived from R&D activity.

Recent statistics from the European Patent Office highlight that patent applications focussed on the medical technology sector account for a considerable proportion of patent activity in the UK.

Why securing IP protection is important for medtech innovators

The development of a broad and robust IP portfolio can enable innovative medtech companies to establish a monopoly over certain areas of technology and also exclude competitors from entering sectors of the healthcare market.

Furthermore, IP rights may be monetized through licensing or other arrangements and can therefore generate a valuable income stream to provide returns on the R&D investment.

Because many medical devices take years to develop and obtain regulatory approval, the IP portfolio of a start-up or new market entrant will often be one its most valuable assets.

In addition, the use of IP has been linked with an increase in firm performance, with ownership of IP rights being strongly associated with improved economic performance at firm level.

What types of IP Rights can be acquired?

IP rights include patents, design rights, trade marks, copyright and trade secrets. All of these elements may be useful in protecting a medical device.

Obtaining a granted patent in one or more commercially relevant jurisdictions is frequently considered to be the most valuable form of IP protection and may offer the broadest monopoly.

With respect to medical devices, patents may be directed to unique features of the device per se and/or processes of manufacturing the medical device.

Additionally, patents may also be obtained for the method in which the medical device is used.

This can be important for so-called connected devices where data is communicated from the medical device to another part of a system, perhaps for further processing or analysis.

In this regard, the manner in which data from a user is obtained, processed and transmitted by the medical device (or a connected part of the system) may also be protectable.

The emergence of Artificial Intelligence (AI) is one particular advancement that has prompted the filing of numerous patent applications in this domain.

UK initiatives supporting IP development and innovation 

Various programmes are available to support R&D endeavours and IP development for businesses across the UK.

For example, SMEs can apply for funding towards an audit of their intellectual property via the UK Intellectual Property Office’s (UKIPO) IP Audits Plus service.

This is intended to provide SMEs with guidance and advice to help identify existing and potential IP assets with a view to understanding their relevance to the wider business strategy and maximise commercial value.

SMEs receiving the funding can choose any qualified UK-based IP professional to carry out the audit.

Other UK government initiatives intended to stimulate and reward IP generation include Patent Box.

This scheme supports the retention of IP in the UK, by allowing businesses to pay a reduced rate of tax on profits arising from qualifying IP income. Its aim is to encourage the commercialisation of inventions by companies in the UK.

Looking to the future

Innovation throughout the medtech sector in the UK remains buoyant and is likely to be an important factor in driving economic growth and recovery in the wake of the COVID-19 pandemic.

As 85 per cent of the UK’s medtech innovators are SMEs, it is essential that these businesses are provided with the necessary funding and support to thrive.

Cultivating a culture and environment which promotes rather than stifles innovation will be key to this success.

Government policy can assist in achieving these goals by creating an appropriate legislative framework across the medtech industry and by providing access to funding that assists with generating and safeguarding IP for medtech innovators.

In this respect, the development of an agile regulatory system governing medical devices in the UK following the Brexit transition period may have a significant impact on new innovations brought to market.

Retaining and expanding schemes such as the UKIPO IP audit service and Patent Box will also help to ensure that UK medtech businesses have access to the skills and funding they need to innovate, develop and grow.

By providing the necessary support to innovators within the UK medtech industry, productivity will be enhanced across the economy, and in turn bring jobs, growth and prosperity to all parts of the UK.

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