In striking contrast to the gloomy forecasts around inflation and a daunting macroeconomic outlook, interest in the global healthtech landscape is as vigorous as it has ever been. Healthtech investments in the US, EU and UK hit a record $23bn in the first three quarters of 2022 despite persistent global volatility.
Leading the pack in investment over the past seven years has been the UK, which has seen healthtech investment levels rise from just $420m (£345.48m) in 2016 to $3.8bn in 2021. Falling close behind China’s $4.1bn (28.24bn yuan), the UK is on track to become Europe’s healthtech Silicon Valley. A key part of this growth has been the digital health sector, which received $29.1bn in investment in 2022.
With UK start-ups such as Charac producing some of Europe’s most advanced and transformative solutions to the challenges faced by modern healthcare providers across the globe, there is an opportunity here being recognised by investors to not only capitalise on the growth of these companies but also to support healthcare systems as they undergo what can only be called a revolution in the way that they interact with patients.
UK becomes healthtech hotspot
To truly realise the investment opportunities in the health technology sector, it is important to understand the demands fuelling the sector’s growth.
The Covid-19 pandemic has shown patients across the UK the benefits of a highly digitalised and advanced healthcare system. Since the pandemic, digital healthcare platforms have aimed to increase access to primary care and provide patients with effective oversight of their prescriptions, with only 10% of patient care requests indicating a preference for face-to-face GP consultation in 2022.
Small and medium-sized enterprises dominate this sector and have been driving innovation and growth. The so-called ‘Golden Triangle’ of London, Oxford and Cambridge is home to 508 healthtech start-ups that received backing from venture capital investors from across the world between 2016 and 2021.
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Indeed, seven of the UK’s 47 unicorn companies, privately held start-up companies with a value of more than $1bn, operate within the healthtech sector. This represents a significant opportunity for investors around the world looking to capitalise on the unparalleled global growth of the real healthtech hotspot.
Pressures breed innovation
In the UK, workforce issues, the growing Covid-19 backlog and the rising costs associated with catering to the healthcare needs of an ageing population are already putting a large strain on both public and private healthcare providers. These pressures have had an acute and devastating impact on the wider sector.
Once staples of any bustling high street, community pharmacies, for example, are now under threat. Since 2016, more than 600 pharmacies have closed in England – and 30% of these closures have occurred in the most deprived areas of the country.
However, pressures breed innovation. Healthtech start-ups are uniquely placed to play a pivotal role in driving innovation and change. not only in the pharmacy sector but across all areas of patient care. AI and computer learning software, for example, offer the potential to unlock quick and reliable remote diagnostics for patients, even in the most remote parts of the UK.
‘Pharmacy first’ thinking
As the UK’s new Health Secretary, Steve Barclay, continues to push for a ‘pharmacy first’ policy to relieve some of these pressures, there is a chance for both healthtech companies and investors to place themselves at the forefront of this historical change in how the NHS operates – with pharmacies at the lead.
Digital pharmacy technologies are coming up with new and creative ways to reverse the decline of community pharmacies in the UK. Using technology to free up pharmacists’ time and building a digital bridge between patients and their local pharmacies, digital platforms are being successfully deployed up and down the UK.
Not only do these technologies create a more efficient way for patients to manage their healthcare needs, but they also allow pharmacists to focus on the revenue-generating tasks vital to ensuring that they can continue to provide communities with frontline care.
Laying the groundwork for future innovation
Every healthtech giant in the UK, from Huma to Cera, can attribute its success to an ability to create simple yet innovative digital solutions that brought the NHS into the 21st century. While investment in AI and other advanced technologies is important, in order for the UK to create an efficient and modern healthcare system it is important to lay the early groundwork.
Unlike other areas of the UK’s healthcare system, the pharmacy sector is lagging behind considerably when it comes to digitalisation. Many patients needing repeat prescriptions or regular checkups at their pharmacy are relying on pharmacies to keep a good record in-house. However, pharmacists often use outdated computer systems and paper records, or sometimes keep no record whatsoever.
Creating and implementing basic patient relationship systems is key to setting the groundwork for the integration of advanced technologies within the pharmacy sector at a later stage. These start-ups offer investors an opportunity to capitalise on early-stage innovation and become part of a wider move towards a more tech-driven approach to healthcare.
Looking at healthtech in the UK beyond 2023
Investment into the continued digitalisation of patient-relationship management in both the public and private sector continues to grow, with spending on cloud, digital and cyber technologies within the NHS up by nearly 50% year on year and accounting for more than one-third of the UK’s healthtech market.
The continued demand from both consumers and the government for urgent technological reform of the UK’s healthcare system will serve as a stimulus for further innovation and development within the country’s healthtech sector, which will only further enhance its reputation as a hub for investment and innovation in 2023 and beyond.