Spring Budget 2024: ABHI's Representation to Treasury
Topic : Type : Briefing
ABHI represents the Health Technology industry in the UK. We have over 400 members that cover medical devices, diagnostics, and digital health technologies, and provide products and services from syringes and wound dressings to surgical robots and digitally enhanced technologies.
HealthTech is a significant contributor to the UK’s economic growth. As the largest employer in the broader Life Sciences sector, HealthTech employs 154,000 people across 4,465 companies, with a combined turnover of £34.3bn. The industry has enjoyed growth of around 5% in recent years. It is characterised by a significant number of small companies, start-ups, and spinouts, supporting the creation of high-quality jobs and sizeable manufacturing and research and development (R&D) activity across the UK. As the most highly regarded universal healthcare system in the world, the NHS in turn is dependent on technology produced by the industry to enhance the efficiency of services and drive continuous improvement in their delivery.
However, data demonstrates that whilst there is significant positivity about the opportunity that HealthTech provides, the reality today is that significant barriers are reducing patient access to life saving and life enhancing treatment. In 2023, almost 50% of HealthTech companies removed products from the UK market; two thirds reported they are delaying bringing products to the UK; and 10% reported they will soon relocate their existing R&D activity abroad. Increasingly, UK patients are receiving the benefits of HealthTech innovations later than those in other countries.
Research shows the single greatest action that could be taken to support growth in UK manufacturing would be to create an NHS procurement process that is more easily receptive to HealthTech. The sector reports a lack of suitable manufacturing and later stage R&D infrastructure, low levels of funding from both private and public sources, and a reduction in sector specific export support. The Government should support UK based HealthTech manufacturing and the UK’s health resilience, through specific long-term HealthTech investment incentives that are accessible to companies of all sizes, alongside bespoke physical infrastructure, including shared clean rooms, manufacturing, and sterilisation facilities.
The growing capital funding deficit within the NHS is limiting its ability to sustainably invest in HealthTech, whilst aggressive and ineffective procurement behaviours are creating a hostile environment. The Government should implement alternative solutions to capital funding to overcome existing NHS deficits and review the capital departmental expenditure limit (CDEL) for the Department of Health and Social Care (DHSC) to allow long-term investment in technology and infrastructure.
The development of the UK sovereign HealthTech regulatory system has seen significant challenges while uncertainty persisted, costs increased, and the UK suffered from a shortage of regulatory skills. To build a world leading regulatory system, the Government should build on their current work with relevant Government departments and arm’s length bodies, including the regulator, to deliver a model of regulation that enhances patient safety, protects patient access, and attracts innovation by collaboratively investing in developing the UK’s regulatory science skills base. The regulator must also have the resources it needs to undertake new and enhanced functions. The attractiveness of a pragmatic, innovation friendly regulator to overseas investors cannot be overstated.
There are also numerous examples of where HealthTech fails to be adopted because of the requirement for Trusts to demonstrate that investments deliver in-year savings. The technologies that our sector provides, hold many of the solutions necessary to improve patient outcomes and facilitate the necessary transformation to more sustainable models of health and care delivery. However, potential efficiencies are unlikely to be achieved in-year. To adopt a longer-term sustainable approach to investment in HealthTech, the Government should immediately work with relevant Government departments, arm’s length bodies and the NHS to adjust current NHS in-year cash releasing savings targets to five years.
The Government should facilitate the accelerated uptake of innovation and deliver best value for the NHS by accelerating existing initiatives such as Health Tech Value Based Procurement and extending the National Institute for Health and Care Excellence’s Early Value Assessment process into a commissioning phase.
Whilst UK policymakers have recognised the importance of data as an enabler of new technology, many practical barriers exist, particularly with the approach to information governance. The Government should invest in a national data research infrastructure that enables access to the depth and diversity of UK health data, with a streamlined governance system that preserves privacy and data security, with commercial terms that are globally competitive.
We believe the Government should rebalance the funding available for early-stage research towards development and adoption through mechanisms such as the Health Innovation Networks and the NHS AI Lab.
Document submitted to Treasury on 22 January 2024.