Understanding R&D in the healthcare industry

R&D in the healthcare sector is crucial for addressing ongoing and changing needs within society. Healthcare evolution is so important to the UK Government that it has committed to spending £5 billion on health-related R&D before 2025.

In the UK, we are fortunate to have one of the most developed healthcare sectors in the world. The NHS provides access to free healthcare to all, while the sector employs three million people, and every year the country invests £4.8 billion into healthcare-related R&D. And because most R&D costs are spent in clinical development and preclinical research, they are eligible for R&D tax credits, which are worth up to 27p for every £1 spent on qualifying R&D expenditure.

What is R&D in healthcare?

Research and Development (R&D) in healthcare encompasses innovative activities aimed at improving patient care, treatment methods, and medical technologies. It involves a systematic investigation to develop new drugs, medical devices, diagnostic tools, and therapeutic approaches. R&D in healthcare spans various fields, including pharmaceuticals, biotechnology, medical equipment, and digital health solutions.

This process typically includes basic research, preclinical studies, clinical trials, and post-market surveillance. Healthcare R&D is crucial for addressing unmet medical needs, enhancing treatment efficacy, reducing side effects, and ultimately improving patient outcomes. It drives the industry forward, leading to breakthroughs that can revolutionise healthcare delivery and improve global health standards.

Examples of what constitutes R&D in the healthcare sector

HMRC refers to R&D as projects that seek to “achieve an advance in science or technology”. In the healthcare industry, this can have a range of innovative applications, such as:

• Electronic medical record access and secure data sharing
• Software applications for telemedicine or virtual appointments
• Artificial intelligence tools to automate admin processes
• Analytics technologies that speed the time to diagnosis, including AI image detection to assess scans
• Internet of Things devices to collect, analyse and monitor long-term health condition data
• Drug discovery/improvements, new vaccination programmes and clinical trials
• Process improvements that support patient care
• Development of non-invasive treatments/surgeries for quicker patient recovery times such as robot-assisted surgeries

It’s important to note that it’s not just businesses that work directly in healthcare that are eligible for R&D tax credits. Businesses that work in the pharmaceutical industry to develop medicines and products that benefit the healthcare industry are also eligible for R&D tax credits.

If you’re not sure whether you are eligible for R&D tax credits, take our quick online test.

The importance of R&D in the healthcare industry

Ultimately, medical R&D in the healthcare industry can be the difference between life and death. The UK may have one of the most developed healthcare sectors in the world, but globally we still have a lot to do. Each year, one billion people are affected by neglected tropical diseases (HIV/AIDS, tuberculosis and malaria) and 6 million people die from them.

It’s through healthcare R&D that we gain a better understanding of how well treatments work, which is the best treatment, and how we can diagnose conditions earlier and with greater accuracy. We can fill the gaps in our knowledge, make important connections between diseases and lifestyle choices and challenge outdated thinking. This is especially relevant for clinical studies which have previously only included a specific demographic in their test groups. Healthcare advancements, including R&D for medical software, can improve quality of life – both for patients affected by long-term conditions and healthcare professionals working in the sector. R&D tax credit specialists are crucial in helping healthcare organisations maximise their incentives, ensuring they can effectively make an R&D claim to support ongoing innovation.

Recent innovations in healthcare

Every day, new innovations in healthcare are impacting the lives and outcomes of patients worldwide. While there are simply too many to list here, we want to shine a light on some exciting new developments that have (or have the potential to) change the industry.

AI technologies are enabling the review and translation of mammograms 30x faster with 99% accuracy, speeding up the time to diagnose breast cancer and reducing the need for unnecessary biopsies.

Pfizer developed the COVID-19 vaccine in less than a year, quicker than anyone ever before – the previous record was held by the mumps vaccine, which took 4 years to develop.

The genome-editing tool, CRISPR-Cas9, has the potential to revolutionise genetic conditions by allowing geneticists and medical researchers to add/remove/alter sections of DNA.

The development of miniature in vivo robots by Virtual Incision and the Centre for Advanced Surgical Technology allows the entire minimally invasive surgery platform to be inserted into the stomach lining, allowing surgery to be performed remotely by a surgeon.

Brainlab has been developing software that allows the merger of the digital and the physical, aggregating patient data into an anatomical digital patient motel. With the help of AI, this allows them to better process critical, individualised patient information.

ImFusion Suite is a high-performance visualisation and processing tool for 2D, 3D and 4D medical data sets that have the potential to revolutionise medical consulting practices.

Is your healthcare business missing out on R&D tax credits?

Over 70% of our clients didn’t know they were eligible before speaking to us. Since 2019, we’re proud to have generated £60m+ in benefits, including businesses that have engaged in healthcare R&D, with our average SME claim 28% bigger than the industry standard.

R&D tax credits are granted by the Government to reward companies who invest in innovation, including medical R&D – so make sure you claim everything you’re entitled to. On average, our clients get a £73k cash boost to their business per claim. Just imagine how you could use that to improve cash flow and fund further healthcare R&D initiatives, fuel your growth, and boost your competitiveness on a global scale.

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