techUK response to MHRA Consultation on Statutory Fees

Overall, techUK welcomes the opportunity to provide feedback on the Medicines & Healthcare products Regulatory Agency (MHRA) consultation regarding statutory fees for regulatory services. The digital health and medical device sectors are vital for innovation in the UK, and we acknowledge the need for an effective regulatory system that ensures patient safety, product efficacy, and market fairness. However, techUK has several concerns regarding the potential impact of the proposed fee structure on suppliers, particularly small and medium-sized enterprises (SMEs) and startups. 

Proposal 1: The MHRA proposes to increase the statutory fees to ensure continued cost-recovery. 

Question 1: Do you support proposal 1? No 

From an SME perspective, proposal 1 raises significant concerns, as the fee increase may disproportionally affect smaller businesses with limited resources. While the MHRA has established SME easements for pharmaceutical products, similar accommodations for medical device and manufacturers are not clearly defined in the documentation. SMEs note that the proposed fee structure fails to recognise the unique challenges they face compared to larger corporations, particularly in terms of financial resources and regulatory burden. 

Overall, members raised the following concerns:  

• Impact of Increased Fees on Innovation and Market Access: While we understand the necessity of cost recovery for regulatory services, the proposed increases in fees could significantly impact suppliers, especially SMEs and startups. Many companies in the digital health space operate on limited budgets, and higher upfront and ongoing fees could pose a barrier to market entry. For SMEs, who play a crucial role in driving innovation, this could stifle their ability to bring new and cutting-edge solutions to the market.  As such, regulation needs to be adequately affordable to ensure  innovation is not hindered. Therefore, we urge the MHRA to consider a tiered fee structure that reflects the size and financial capability of suppliers, ensuring that smaller companies are not disproportionately affected. 

• Fee Transparency and Predictability It is essential that any adjustments to the fee structure be transparent and predictable. Fee increases must be consistent with the quality of the service provided and the pace of delivery. Some members questioned the steeper fee increases, with some citing increases of £20,000, , as inconsistent with the services received. . Furthermore, suppliers need to factor the higher costs into their long-term strategies and pricing models. Uncertainty around future fees may deter investment and strategic planning in the UK market. We propose that the MHRA establish a clear and consistent schedule for any future fee adjustments, providing suppliers with the certainty they need in order to plan ahead.  

• Impact on Product Pricing: Increased regulatory costs will inevitably be passed on to consumers , affecting the affordability of medical devices and digital health solutions. This could be particularly problematic in healthcare, where affordability and accessibility are critical. We ask that the MHRA carefully assesses how its fee proposals might indirectly influence product pricing and, by extension, patient access to innovative technologies.  

• Support for SMEs and Startups: Given that many SMEs are at the forefront of digital health innovation, we strongly recommend that the MHRA consider additional support mechanisms, such as fee reductions, grants, or phased payments for smaller companies. This would alleviate the immediate financial burden and encourage innovation, ensuring the UK remains a competitive and attractive market for digital health solutions. 

• Global Competitiveness of the UK Market: Following the recent geopolitical and macroeconomic circumstances, the UK has become a less attractive market for Medtech companies. As the UK seeks to remain a global leader in life sciences and health technology, we must consider how the UK’s regulatory environment compares with other international markets. Higher fees and compliance costs could drive companies to seek more favourable regulatory environments elsewhere, diminishing the UK’s attractiveness as a hub for digital health innovation. We encourage the MHRA to consider international benchmarking when setting fees and to ensure that the UK remains competitive on the global stage. 

Members called for a more detailed framework to support SMEs and proposed the following additional recommendations:  

• Incentives for Innovation: The MHRA should introduce incentives for companies developing novel, high-impact solutions, such as reduced fees for early-stage or breakthrough technologies. This would align with the Government’s broader strategy of fostering innovation in healthcare. 

• Stakeholder Engagement: We encourage the MHRA to continue engaging with suppliers throughout this process to ensure that the final fee structure is balanced and considers the full spectrum of feedback from the sector. Continued dialogue will be key to developing a regulatory environment that supports both safety and innovation. 

Proposal 2: The MHRA proposes to amend its existing Medical Device Registration fee to include the costs for medical device post-market work.  

Question 2: Do you support proposal 2? No 

techUK members expressed concerns on the proposed framework for funding post-market activities as it may lead to dramatic cost increases and challenge SMEs’ ability to absorb costs, leading to concerns regarding financial sustainability and market viability.  

The concerns include:  

• Ongoing Compliance Costs: The proposal to shift towards a model where the MHRA fully recovers the costs of ongoing compliance is concerning for suppliers. Continuous compliance is essential for patient safety, but the added financial burden could hinder companies from maintaining their products in the market. We recommend that the MHRA explore alternative models of cost recovery that balance sustainability with affordability, particularly for companies managing multiple products or updates within rapidly evolving sectors like digital health. 

• Financial sustainability and cashflow: Some SMEs expressed that the proposed fee structures are unsustainable for companies of their size. Furthermore, the proposal for an annual fee due on April 1st each year could create cash flow problems for SMEs, especially for UK Responsible Persons (RPs) who may have to pay for multiple manufacturers at once. This lump-sum payment model could put considerable strain on the financial resources of smaller companies and RPs, potentially forcing them to make difficult decisions about which products to maintain in the UK market. 

• Market withdrawal and indirect impact: Increased fees might lead some manufacturers, especially international SMEs, to withdraw their devices from the UK market. This could result in a reduced variety of medical devices available in the UK, potentially impacting patient care and innovation in the healthcare sector. Additionally, members noted how the potential fee uplift could also impact SMEs and UK companies indirectly as they may become less favourable prospects for partnerships and cross-industry collaboration.  

• Inequitable distribution: There are concerns about the equity of the GMDN-based fee structure. Members argued that the system doesn't accurately reflect product portfolio size or complexity. Some GMDN codes cover many products, while others might only cover one or two. This disparity could lead to situations where a company with a diverse range of simple products pays significantly more than a company with a small number of complex, high-risk devices. Such structure could penalise certain types of SMEs and discourage product diversification. Some members questioned whether the license fees could be dependent on the volume of sales, to more equitably reflect the variety of company sizes across the industry.  

While there is an understanding of the rationale and necessity behind the proposed fee changes, members argued that, beyond the SME support activities recommended for proposal 1, the MHRA should consider more gradual fee increases practices. Gradual fee increases or phased implementation could help reduce the immediate financial strain on suppliers, giving companies time to adjust to the new regulatory environment without compromising their financial stability. 

Proposal 3: The MHRA proposes to create a new service providing regulatory advice meetings for medical devices.  

Question 3: Do you support proposal 3? No 

While the intention behind Proposal 3 to provide regulatory advice meetings is appreciated, there are significant concerns about its implementation and potential impact on the industry, especially for SMEs. They include:  
 

• Cost Barrier: The proposed fee of £987 for a one-hour meeting may be prohibitively expensive for many SMEs. This high cost could create a two-tier system where only larger, well-funded companies can afford to receive direct regulatory advice, potentially putting SMEs at a competitive disadvantage. 

• Information Equity: There's a risk that crucial regulatory information and insights will only be accessible to those who can afford these meetings. This could lead to an uneven playing field, where smaller companies struggle to navigate regulatory requirements effectively, potentially impacting their ability to bring innovative products to market. 

• Industry-wide benefits: Regulatory clarity benefits the entire industry. By making this information expensive and exclusive, the MHRA may inadvertently slow down innovation and compliance among SMEs who drive much of the innovation in medical devices. 

• Clarity on specialist advice: It is essential for the MHRA to clearly state what is regarded as specialist advice. For this service to be delivered successfully and fairly, there should be a detailed ‘menu’ outlining what specialist advice entails and what is the level of competence available to provide the advice for the most novel and cutting-edge innovations.  

Overall, members agreed that widely shared information is a key ingredient for a flourishing and innovating market. Therefore, the new service should be implemented alongside additional commitments for the benefit of the wider industry. We propose the MHRA to consider alternative models that could achieve the goal of “recovering full costs” without disproportionately impacting SMEs: 

1. Tiered Pricing: Implement a sliding scale fee structure based on company size or revenue. 

2. Group Sessions: Offer lower-cost group advisory sessions for common topics. 

3. Free Basic Advice: Provide a certain level of basic regulatory advice for free, with charges only for more complex consultations. 

4. Online Resources: Develop comprehensive online resources and FAQs to address common regulatory questions. 

5. Industry Workshops: Host regular, affordable industry-wide workshops on key regulatory topics. 

6. SME Support: Establish a dedicated support program for SMEs, potentially including a certain number of free or heavily discounted advisory sessions per year. 

Overall, to supplement more expensive ad hoc meetings, it would be beneficial to implement a system where key insights and common questions from meetings are anonymised and shared with the wider industry, ensuring that critical information is not siloed. 

Proposal 4: Changing fee structure for services  

Question 4: Do you support proposal 4? No opinion  

Members showed no wider objections to proposal 4 but noted that more details should be required on the process of assessing the accurate costings. For instance, members wondered what the new fee bands would entail and how the new pricing would look like.