The Future of Regulated Health Tech and AI-Enabled Healthcare: Key Takeaways for Developers, Investors and Clinicians

Brett Lambe and Dan Morris, Partners in our Digital Health team, recently attended the Hardian Health Tech Summit, an event that brought together an impressive cross-section of the health tech sector, including regulators, founders, clinicians and investors, to examine the future of regulated health tech and AI-enabled healthcare. 

The discussions were wide-ranging, candid and, at times, challenging. What follows is our summary of the key themes and, where relevant, our observations on what they mean in practice for organisations operating in this space.

AI Regulation is Now Operational

Perhaps the most striking takeaway from the event was the extent to which AI regulation has moved from the theoretical to the operational. The conversation is no longer about whether health tech AI will be regulated, but about how developers are expected to meet regulatory expectations today.

The consensus among regulators and experienced developers was unambiguous: compliance, transparency, clinical governance and post-market surveillance must be designed into products from the outset. Attempting to retrofit these elements after development (or worse, after deployment) is no longer a viable strategy. Regulators expect to see evidence of considered, documented decision-making at every stage of the product lifecycle, from initial design through to ongoing monitoring in clinical use.

For developers and their investors, the practical implication is clear. Regulatory strategy is not a lower-order concern to be addressed at the point of market entry. It is a foundational element of product development, and organisations that fail to treat it as such are likely to encounter significant delays, increased costs and, in some cases, enforcement action.

Regulatory Pathways are Converging and Increasingly Complex

A related theme was the growing complexity and interconnectedness of the principal regulatory and adoption pathways. CE marking, FDA approval and NHS adoption are no longer discrete processes that can be managed in isolation. Each pathway increasingly references or depends upon the others, and navigating them successfully requires a coordinated, multi-jurisdictional strategy.

This is particularly relevant for UK-based health tech companies with ambitions to scale internationally, or for overseas developers seeking access to the UK market. Understanding how these pathways interact (and where they diverge) is essential to avoiding duplication of effort and unnecessary delay.

The Value of Early Legal and Regulatory Input

A recurring theme throughout the event, and one raised by founders and regulators alike, was the importance of engaging legal and regulatory advisers early in the development process. Several speakers spoke candidly about the value of onboarding regulatory, intellectual property, privacy and commercial expertise at the earliest possible stage. Others reflected, with equal candour, on the consequences of not having done so.

The rationale is straightforward. Health tech products operate at the intersection of multiple legal and regulatory regimes, primarily medical device regulation, data protection, intellectual property, clinical safety and procurement law. Decisions made early in development, whether about data architecture, algorithmic transparency, IP ownership or clinical validation methodology, can have profound implications for regulatory approval, commercial viability and contractual risk allocation further down the line. The earlier these issues are identified and addressed, the lower the cost and disruption of doing so.

AI Governance and Liability in Supplier Contracts

As AI-enabled health tech solutions mature and enter procurement, AI governance and liability allocation are emerging as significant and often contentious negotiation points in supplier contracts. Questions around responsibility when an algorithm underperforms or produces an adverse outcome, the allocation of liability across increasingly complex supply chains, and the governance frameworks that should sit around AI-assisted clinical decision-making are all attracting heightened scrutiny from both buyers and suppliers.

Organisations entering into contracts for the supply or procurement of AI-enabled health tech should expect these issues to feature prominently in negotiations and should ensure that their contractual frameworks are robust enough to address them.

Procurement as a Barrier to Scaling

Procurement was identified repeatedly as one of the most significant barriers to scaling health tech innovation within the NHS and other healthcare systems. Despite the quality and clinical promise of many products, the pathway from innovation to adoption remains frustratingly slow and opaque. This is a systemic challenge that requires attention from policymakers, procurers and industry alike.

Regulatory Arbitrage and the MHRA's Watchful Eye

Finally, there was pointed discussion about developers (particularly in the wearables, remote monitoring and agentic AI or chatbot space), with many attendees considering key players in the market have managed to circumvent stricter regulatory requirements around medical device classification, notwithstanding that their technology clearly has, or is being used by end users as having, a medical purpose. The message from those close to the regulatory landscape was clear: the Medicines and Healthcare products Regulatory Agency (MHRA) is aware of this trend and is examining it closely. 

However, since this discussion, the MHRA published draft pre-market regulatory requirements for medical devices and in vitro diagnostic devices entering the market, and for certain types of chatbot, it appears that this issue has not been fully addressed. However, the consultation and feedback process is ongoing, so the position may change.

Nevertheless, developers in this space would be well advised to assess their regulatory position carefully. The principle is well established: if a product has a medical purpose, or is being used by consumers as though it does, it is likely to be treated as a medical device regardless of how it is marketed. Seeking to avoid that classification carries significant legal and reputational risk.

Looking Ahead

The health tech sector is maturing rapidly, and with that maturity comes a more demanding regulatory, commercial and ethical landscape. The organisations that succeed will be those that embrace complexity, invest in compliance and governance from the outset, and engage the right advisers at the right time. We look forward to continuing to support our clients as this exciting and important sector evolves.

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