The case for a HealthTech Regulatory Sandbox in Singapore
Singapore is a recognized leader in the world when it comes to fostering innovation and has done so through building the necessary enablers and conditions.
The 2016 Global Innovation Index (GII) ranked Singapore at number 6 in the world (up from 7th in 2015) only just behind countries like the USA, UK and Switzerland.
Two key variables in the institutional component of the GII assessment have supported / contributed to Singapore’s strength in innovation:
- Regulatory environment scored 98.6% (seen as a core strength by GII)
- Business environment scored 89.3%
Indeed, the 2015 Global Startup Ecosystem ranks Singapore as 10th globally up 7 places from 2014!
The challenge for regulators is to be able to adapt quickly enough to accommodate the pace of innovation without undermining their necessary role e.g. safety in the case of healthcare. Not getting this right will often prove to be a limiting factor for innovators!
The Monetary Authority of Singapore, Singapore’s financial regulator, has recognized this potential challenge and has taken the welcome decision of creating a Regulatory Sandbox to encourage more FinTech innovation all within a well-defined space and duration.
A regulatory sandbox is a constructed well-defined space (see Principles of the Regulatory Sandbox for further detail), within which companies can experiment with innovative solutions in a relaxed regulatory environment and with the support of a national regulator for a limited period of time while they validate and test their business model.
The concept of a Regulatory Sandbox is very new with Singapore being only the second economy in the world to propose a Regulatory Sandbox after the UK (in 2015). Following MAS’ consultation, Australia, Hong Kong, Malaysia, Thailand have each come up with their own version of the regulatory sandbox.
Galen Growth Asia’s interaction with the most promising HealthTech startup CEOs, in Singapore and other Asia countries, has identified the need for a similar initiative for HealthTech. Further insight can be found in our forthcoming 2016 HealthTech CEO Summit report.
A regulatory sandbox would create an environment, with clearly defined boundaries, where HealthTech innovators could develop and test their solutions with real time input and guidance from clinicians, medical practitioners, industry, and other key stakeholders including regulators enabling the latter to adopt and/or adjust activity-based regulations which enable the innovation. There is therefore, in our view, a much to be gained from Singapore having a healthcare regulatory sandbox!
The Singapore Ministry of Health has, in October 2016, announced that it will review regulations to keep pace with advances in medicine and technology. Input is being gathered from focus group sessions with healthcare industry players (undefined).
The challenge is that such an approach could become an endless catch-up game and/or implementation could take too long thus impacting innovation negatively. For example, investors will hesitate to invest in a promising healthtech venture if there is concern that a regulation could significantly impact the operations of that venture. A now infamous example is the genetic testing company 23andMe which is back in the business of direct-to-consumer health testing kits, after a two-year semi-hiatus from offering health risk assessments at the behest of the Food and Drug Administration in November 2013.
Contrast the EU Commission, which released a green paper for review and consultation in April 2014, and is reporting that new regulations can be expected by 2019 with the FDA, the US healthcare regulator, which has been working diligently to provide clarity on regulations using practical approaches that balance benefits and risks and, in 2016 alone, has released 6 new guidelines.
Asia countries have already begun evaluating and adapting their healthcare regulations to accommodate the fast pace of HealthTech innovation. Although uneven, several countries have taken the lead:
- In January 2015, Singapore released its national telehealth guidelines for review inviting comments and feedback in late 2016.
- In H2 2014, China announced guidance about telemedicine and online sales of pharma and the mechanics on how these will be regulated.
- India is scheduled to launch the National e-Health Authority (NeHA) to oversee the regulations for the digitisation of health information. The establishment of the authority is slated to be formalised by early 2017.
Other economies actively addressing their healthcare regulations to accommodate healthtech innovation include Malaysia and Taiwan.
Singapore’s very recent release of its Committee of the Future of the Economy report states that HealthTech is to be one of six growth clusters as scalable healthcare technology solutions can help meet both its own domestic healthcare needs, as well as growing demand abroad.
In view of the critical role regulation plays in a vibrant innovation ecosystem, Galen Growth Asia would welcome the creation of a HealthTech Regulation Sandbox.
This would represent a fantastic opportunity for Singapore to continue to define frameworks and set precedents for the region if not the world!
Authored by: Julien de Salaberry
Edited by: Helene Champoux
Copyright © 2017 Galen Growth Asia