Why start-ups need backing to break into the medtech sector
Kurt Höller is Director of Business Creation at EIT Health, where he manages the EIT Health Accelerator, helping to create an ecosystem where innovation can thrive.
Dr. Kurt Höller, Director of Business Creation at EIT Health, explains why bringing healthcare innovations to market is especially challenging for start-ups.
We all want the same thing when it comes to health innovation: we want the greatest ideas that have the potential to improve lives to reach the people who can benefit, as quickly as possible. Culturally, we are a population who expect things to happen fast, especially in an age where technology affords us the opportunity to have instant, real-time access to everything from analysis of our sleep quality to diagnosis of our conditions using smartphones.
While the technology available for health applications is an ever-growing and dynamic sector, the road to the end user is often long and complex. And rightly so in most cases. We must ensure that technology delivered to patients and citizens for health conditions is effective, safe, user friendly, cost-effective and well-integrated into current health systems.
However this is no small task – particularly for start-ups or individual entrepreneurs who have ideas with great potential but who do not have the capital, experience or resources to bring their solution to the regulators and reimbursement bodies. Those developing medical technologies must ensure they have compelling clinical and health economic data, patient and clinician backing, a clear regulatory strategy, and a reimbursement model that will mean patients actually can access the technology once the relevant stages of the process have been navigated.
Challenges facing start-ups
Given all the hurdles that new med-tech solutions must clear, we should ask ourselves: do start-ups have an inbuilt competitive disadvantage?
Start-ups are, arguably, one of the most disruptive forces in technology today. We are seeing more and more bright entrepreneurs develop lean, agile and innovative solutions – and they are no longer afraid to turn their talents to the health sector. But unlike the pharma and medtech giants, start-ups have not trodden this path before, and this provides a distinct disadvantage. Talented teams with promising ideas that could potentially have a great impact on some of our most challenging health issues, such as treating chronic disease, prevention of disease, and healthy ageing, exist, but they don’t know what is ahead of them.
The road to market is tough for such talent – comprehensive research and development, user testing and validation, resources to collate and submit for regulatory approvals, and reimbursement strategies are all required to launch a medical technology device or service in Europe. And the exact route often differs, depending on where you are planning to launch. It’s no surprise that such groundwork also comes at great cost, which is another disadvantage for start-ups.
Small start-ups and entrepreneurs rarely have the capital to bring their solution to market and must seek funding through private or public investors. One of the challenges, particularly in the earlier stages, is who will invest in a technology that hasn’t yet proven its worth with the regulators, or with clinical trials. There are of course investors who can see potential when it’s right in front of them, but many others are hesitant.
Unfortunately for start-ups, it is often very difficult to predict the obstacles that will appear on their path to the market. Two of the start-ups we support at EIT Health explain their own experiences with confronting the unknown:
EIT Health and its mission to improve lives in Europe with innovation
Here at EIT Health, we work to support promising start-ups throughout their journey, so that the best ideas have a better chance of reaching the market as quickly as possible.
Additionally, we started doing work in 2019, as part of our EIT Health Think Tank, that aims to offer analysis of the "innovation pathway" – the pathway from idea to market. This project will bring together expertise from all stages of the pathway, across multiple European countries, to look at the challenges and opportunities for how the pathway could be improved to make it easier for innovators to bring their ideas to market.
Technology has the potential to improve health exponentially – promoting healthy living, preventing and detecting diseases, optimising treatment, and managing chronic conditions. This has never been more important as we face substantial challenges such as an ageing population, a continuous rise in chronic disease and strained health systems. We have a responsibility to help promising innovation that arms us in the fight against such challenges to reach patients, citizens and healthcare providers.