17 July 2019

The Innovation Agency is successfully supporting small businesses to make inroads into the NHS market, according to a report.

However, innovative small businesses continue to face obstacles in bringing their products and technologies to the NHS, despite the best efforts of programmes designed to help them.

The Innovation Agency’s Healthcare Business Connect (HBC) Programme – funded by the European Regional Development Fund – aims to support local health and life sciences SMEs with innovative products and services in gaining access to the NHS market.

Research conducted by Dr Kostas Selviaridis and Professor Martin Spring, of Lancaster University Management School’s Centre for Productivity & Efficiency, looked at the perceived quality and impact of the support small firms receive from the programme across Lancashire, Liverpool City Region and Cheshire and Warrington.

The majority of those businesses interviewed – 16 of 20 – were either very satisfied or satisfied with the support they received from the Innovation Agency. Firms reported gaining through better connectivity with clinicians and decision-makers in the NHS, benefitting from funding-related support, and being better able to both build a profile within the NHS and to understand the structures of the health service.

Benefits for those companies that had already developed a product or technology included help in securing NHS contracts, attracting additional funding, and creating jobs.

Most businesses – both those with products already developed and those still in the development process – reported changes in the way they operate, such as a greater knowledge of the NHS procurement process and an improved ability to promote their products to that market.

Report author Dr Selviaridis said: “Some of the businesses reported they had secured contracts in the NHS or private healthcare sector, gained sales, and have been able to create new jobs and access additional funding from public sources or venture capital.

“Our analysis suggests they also gained value for their business through building their reputation and credibility as a result of the Innovation Agency’s vetting of their products and companies. They were able to refine their products and gain access to relevant clinicians and NHS staff for valuable feedback that inputted into their product development, using processes such as clinical trials or pilot projects.

 “While these benefits were evident for many companies involved, there were wider issues regarding the pace at which SME innovations penetrate the supply chain of the NHS,” Dr Selviaridis added. He said many of these challenges were associated with the procurement process.

 “NHS procurement professionals frequently take a conservative route in procurement decisions, trying to drive down the cost of each transaction, rather than looking at the overall value of the procurement of a system or service.

 “It is imperative policy-makers pay attention to these issues to reinforce the role of AHSNs as key actors in the UK health innovation system.”

Mike Kenny, Associate Commercial Director at the Innovation Agency, said: “The NHS is not a single organisation but many hundreds of organisations and any business requires formidable resources to navigate the system. The AHSNs support businesses in this respect.

“AHSNs have a clear role in driving economic growth and job creation, which the Office for Life Sciences recognises and supports. Extending the capacity and capability of the AHSNs would be a key strategy for influencing the systemic procurement challenges that create inertia in the supply chain for SMEs to overcome.

“The AHSNs are working hard to move the traditional cost-based procurement practice to one where value to staff and patients is the clear driver. This is where efficiencies can be made through the uptake of innovative products and services.”

Professor Martin Spring, Director of the Centre for Productivity & Efficiency, added: “Many productivity improvements arise from innovation of one form or another. Given the scale of NHS procurement and the importance of SMEs to the economy as a whole, getting this policy right has great potential to improve private sector productivity as well as deliver significant healthcare benefits.”

This study forms part of a research project on innovation-oriented procurement in the UK public sector that Dr Selviaridis and Professor Spring are currently pursuing.

Lancaster University’s Health Innovation Campus and the Innovation Agency are partners in the HBC programme in Lancashire, providing emerging businesses with assistance in a range of areas.

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