Balancing innovation and safety: The impact of Medtech regulations

The Medtech sector is currently at a crossroads, facing a potential choice between rapid technological advancement and strict regulatory oversight. To realise the full impact of AI and the value it can bring, Medtechs must navigate through stringent regulation, alongside other concerns around data privacy and talent attraction.

According to our recent report in partnership with Microsoft, the majority (78%) of decision-makers in the Medtech sector believe they are working in a strict regulatory environment. However, there remains a large divide in opinions on whether these regulations support innovation, or impede it.

Is regulation a help or a hindrance?

Just over half (52%) of Medtech leaders believe that existing regulations boost innovation, highlighting the view that well-thought-out safety guidelines have the potential to make both the public safer and encourage innovation simultaneously. There’s also a school of thought, particularly when it comes to safety regulations, that AI could actually help with the application of protocols and guidelines. AI has the potential to detect early issues, identify patterns that humans might miss and consistently follow regulatory protocol, reducing the variability that can come alongside human decision-making. All of this could be a benefit from a regulatory perspective.

But a meaningful minority (31%) maintain that current regulations hinder innovation in the Medtech sector. This is particularly true when it comes to implantable devices, where Medtech firms/organisations are facing issues around different rules and regulations in different markets (45%), slow approval processes by regulatory agencies (31%), and adapting AI systems to new risk classes (21%).

What are regulators looking for?

Regardless of industry or use case, AI creates the same types of concerns, including ethics, bias prevention, and trust. According to the Pew Research Center, a key focus for regulators moving forward will be to ensure that healthcare data that has been used to train AI is of the highest quality to avoid biases and ensure patient data privacy. This means that AI models must be trained on diverse datasets representing an accurate breakdown of real populations – indeed, algorithms trained without these considerations simply won’t be as effective. For Medtechs, this may mean investment required in quality datasets, as well as navigating complex conversations around the ownership of personal health data.

EU AI Act: A global precedent

The EU AI Act represents a major step towards creating a standardised approach to AI regulation. It sets the model for the rest of the world, highlighting the importance of regulation that safeguards public welfare without hindering technological advancement. The Act's introduction marks a crucial moment in the Medtech sector, as it seeks to balance the potential of AI with the necessary precautions to reduce risks.

However, the implementation of the EU AI Act has also raised concerns about its impact on innovation across the industry. According to our research, nearly a fifth (17%) of Medtech leaders in Europe feel that regulation greatly disrupts their innovative efforts, compared to just 5% of their US counterparts. Regional disparities have already been highlighted as an area for concern among Medtech leaders, even prior to the AI Act’s implementation.

With the new UK government already setting out plans for increased AI regulation and other global markets also following suit – or considering doing so – Medtech firms must learn to adapt to these variations as much as possible. This will require ongoing dialogue between the regulators and the industry to help refine regulations like the AI Act and address any unintended consequences that may come from it, but also for manufacturers to ensure they have the right teams in place to support.

Finding the right talent

To overcome these regulatory hurdles, Medtech manufacturers will need access to cutting-edge skills and top-quality talent to meet the standards required for regulation, compliance, and data quality. Like many industries, Medtech continues to face stiff competition for digital talent with a severe gap between supply and demand. Skills in AI and automation are among the most in-demand skill clusters.

Alongside digital talent, manufacturers will also need to consider building their regulatory intelligence and compliance functions to both navigate the complex regulatory landscape and also foster a culture of compliance when it comes to using and training AI and other technologies. Partnerships throughout the product life cycle are a great way for Medtech firms to access the talent lacking within their teams.

Striking a balance

The Medtech sector is at a critical moment, where innovation and regulation must coexist. A stricter regulatory environment is essential for ensuring patient safety – both for the patients themselves and also safety around their personal data. But this should not deflect from the creativity and ingenuity that drive technological progress.

Having sound strategies for both data quality and privacy and finding talent is crucial to harness the full promise that AI brings – and will also help manufacturers to demonstrate that they are using technology in a responsible, compliant way. As we move forward, a balanced regulatory approach that encourages innovation while safeguarding public health is crucial. The collaborative efforts of manufacturers, regulators, healthcare providers, and tech/AI partners will be key to achieving this.