Ambitious European founders continue to look to the US to scale their enterprises, conquer new frontiers and cater to a broader customer base. The US digital health market is valued at $88B in 2023 — the largest and most lucrative in the world — and is entirely privately funded.
For founders, the US offers access to more capital and investors interested in innovative healthtech solutions. European companies seeking to lead the global healthtech revolution frequently encounter resistance on home turf: fragmented and disjointed health systems that are difficult to sell into with high regulatory hurdles and ecosystems that do not stimulate innovation or an entrepreneurial mindset.
Conversely, America is home to world class hospitals, leading academic centres and robust healthtech ecosystems that promote game-changing collaborations and networking. Achieving US Food & Drug Administration (FDA) approval is also a powerful signal to the wider global community.
Among the 25 biggest B2B healthtech companies founded in Europe since 2008: 52% have expanded to the US, demonstrating the ongoing push to conquer the US and reinforces Frontline’s core belief that in order to be great, companies need to have both an American and a European presence. Other trends include, 48% of these company pioneers are UK-founded, 76% were incorporated between 2013 and 2018 and 40% have raised more than £100m.
There’s no shortage of , but the leap is more nuanced for healthtech firms. Through in-depth interviews with a range of experts this article will provide the top six insider pearls of wisdom that every healthtech company should know before embarking on their American dream.
1) Know your stakeholders and learn the right jargon
The entirely private US healthcare system can be difficult to navigate, especially when transitioning from Europe’s predominantly free and publicly funded systems. To simplify, about . They access medical services from providers — clinics or hospitals — aligned with specific insurance companies (think Aetna and Cigna) in a multi-payer system. Individuals get coverage through their employers or government programs like Medicare for seniors and Medicaid for low income individuals. When seeking medical care or prescription drug coverage, ‘free’ is not the norm. Even if employers deduct health insurance premiums from an employee’s paycheck, it doesn’t mean that all medical expenses are fully covered. Most people still need to pay out-of-pocket for certain aspects of their care, like copays, and deductibles which can vary considerably.
Providers utilise diagnosis and procedure-specific reimbursement codes in a fee-for-service model, billing patients individually after each visit. Those with insurance have their bills submitted to insurance providers, while uninsured individuals receive direct invoices. Efforts to enhance healthcare access, such as the Affordable Care Act (ACA and commonly known as Obamacare) have generated ongoing debate. The ACA was enacted as a means to provide affordable healthcare coverage however it continues to face significant criticism as it has increased taxes and deductibles for Americans. As a result, significant disparities across the nation continue to persist in healthcare delivery, access and outcomes.
Caroline Mitterdorfer, Co-founder and CEO of LEVY Health, learned quickly that though there were only two possible reimbursement models in Germany, in the USA there were so many more. Mitterdorfer comments that LEVY Health needed to be more “creative” with their American approach, and to tailor their sales pitches to the specific stakeholders that genuinely cared about the success of the company’s product. It is important to understand that your traditional European allies might be different and American stakeholders span from patients, healthcare providers, insurers, pharmaceutical and biotech firms to government agencies. US stakeholders also highly value companies that speak their language, so invest time in mastering the jargon and terminology that resonates with them ().
2) Understand your market needs – the US is a different ballgame
Huma, a UK-founded remote patient monitoring platform, had already established a strong presence in Europe before making the leap into America. Kaushik Gune, Head of US at Huma, knew that despite some commonalities, entering the US market was akin to starting from scratch. Understanding the complexity of the American healthcare landscape, where there are multiple insurance carriers with thousands of payment plans and a fragmented provider space, Gune and his team realised that a one-size-fits-all approach would never work. Everything from patient needs, provider challenges and reimbursement constraints, was different and simply sending in European sales teams to pitch Huma’s existing product just would not work. The team spent months overhauling and re-engineering their product, business model and commercial approach to meet the needs of this new market.
LEVY Health also recognised the importance of both understanding the US market and planning a relevant go-to-market strategy several months in advance of moving. This research involved accelerator participation to learn the ins and outs of the American healthcare market to: assess product-market-fit, validate assumptions and allow agility in product development, refinement and overall sales approach. Remember, payers are not only interested in patient outcomes but are also keen on cost savings. Proving that your product boosts ROI by reducing hospitalizations or streamlining clinician workflows, for instance, is absolutely essential. LEVY Health nailed this strategy by demonstrating how their prescreening fertility software accelerates diagnosis and treatment initiation for female patients.
is an independent firm that specialises in helping companies develop an ROI strategy. This framework can then be shared with payers and other prospective stakeholders to assess your company’s alignment with potential solutions. Nevertheless, seeking guidance from firms like Milliman can present a challenge: you will need to demonstrate the impact of your product or service on health outcomes, and data from at least 1000 patients can be required. The issue lies in accessing these patients. Good news though, lessons five and six in this article offer insights that could facilitate your efforts in engaging and securing patients.
3) FDA Approval might be easier than you think
Maria Teresa Perez Zaballos, Co-founder and CEO of France-based Endogene.Bio emphasises that obtaining FDA approval is more than just a regulatory stamp; it serves as a powerful signal. Just as CE (European Conformity) marking ensures product standards in Europe, the FDA oversees medical devices, pharmaceuticals, food and cosmetics in the US. While the FDA approval process is rigorous, time-consuming and costly, it serves as a declaration to the global community that the highest standards of the most stringent regulatory body in the world have been met.
Ailene Thiel, Senior Healthcare Partner with The Virtuous Cycle Collaboratory, offers guidance to European healthtech startups looking to enter the US. She characterises the FDA as “supportive and nurturing” especially to companies that proactively engage with the agency early. And contrary to common belief, “the FDA is approachable,” she says. She advises healthtech startups to take advantage of the FDA’s Pre-Submission Program, where you can request meetings with FDA advisors on a number of topics such as: the appropriate regulatory path for a novel device, product risk assignation, and medical device classification. Even seemingly simple items like contact lenses and electric toothbrushes fall under the FDA’s device category, making early engagement with the FDA essential to understanding and fulfilling regulatory obligations.
While the FDA necessitates a fresh application, a significant portion of the groundwork is similar and efforts can be shared across the European CE mark application. Gune with Huma, emphasises that it was a strategic move to pursue both certifications consecutively.
Alex Gough, Co-founder and CEO of Sequins, is focused on developing technology that improves assay development for large diagnostic labs. In light of the evolving US regulatory environment, they are actively collaborating with these laboratory partners to help navigate the FDA approval process, through laboratory developed tests (LDT) or in vitro diagnostic (IVD) pathways, allowing Sequins to stay nimble in the process.
Another company that was interviewed is also navigating the regulatory maze; although their product required a CE marking in Europe, it was classified as a non-device in the US. So instead of recreating the same European playbook, the team sought expert guidance to decode the labyrinth of US regulations first. Healthcare-specific advisors are your allies. Gough’s advice is crystal clear though, “look beyond the on-the-ground US experts” to find founders, investors and professionals that have lived and breathed this very challenge. The key is to look for individuals deeply familiar with the ins and outs of the regulated US diagnostics market, from your very same starting point.
Mark Swanson, Partner at QRx Partners, a US-based quality and regulatory advisory firm, advises companies to remain vigilant. While your product may not be classified as a medical device now, Swanson highlights the potential for change. Indeed, many sub-sectors within healthtech like AI and diagnostic aids are still being navigated by the FDA, so it’s important to stay ahead of evolving regulations. According to Swanson, it’s possible the FDA could change rules, or (and more commonly) he adds, clinicians and other users might ask for added capabilities that could lead to the reclassification of your product as an FDA-regulated item. Swanson outlined that the key factor is the “intended use.” For example, “buying a hammer for home repair is one thing, but once it’s used for bone chipping it doesn’t matter that it may look like the same hammer, it is now a medical device that is regulated.”
4) Prioritise HIPAA with a dedicated team
To succeed in the United States, startups must also prioritise HIPAA (Health Insurance Portability and Accountability Act) compliance. This means adhering to the regulations set forth in the act to safeguard patient’s protected health information (PHI). HIPAA compliance is important for any company handling PHI, but can also extend to manufacturers in pharmaceuticals and medical devices (particularly class 3). Vanta, a compliance and security platform and one of Frontline’s portfolio businesses, offers a very helpful .
Since the initial act was brought forward in 1996, there have been ongoing amendments and additions given the evolving nature of healthtech. And companies must ensure they are also in compliance with any new regulations. HIPAA also requires that one team or individual be in charge of compliance so it’s important to assign your designated privacy and security officials early and with this in mind. While HIPAA is healthcare specific, it does share some common principles with Europe’s GDPR (General Data Protection Regulation). A solid foundation in GDPR compliance can be beneficial as these frameworks offer some overlap for European companies making the leap across the pond.
Mitterdorfer and team hired a single seasoned employee with experience in global quality affairs that kept up to date with HIPAA compliance and ensuring associated team training was up to code. The decision to hire a single employee focusing on compliance ultimately proved fruitful when landing initial customers; LEVY Health’s sales cycles were shorter and more streamlined due to the thorough work that had been completed long before boots were ever on the ground in the USA.
5) Key Opinion Leaders (KOLS) are important champions when moving to the USA
Due to the rigorous regulations in healthcare settings, progress can sometimes be slow. In the US, where your healthtech company may be relatively unknown, it’s imperative to garner support from individuals who can champion your cause. KOLs play a pivotal role in the success of your healthtech venture, as they not only validate your offerings but also cultivate public trust due to their influential expert status — both of which are absolutely crucial. Moreover, KOLs facilitate market access through their extensive networks and are able to provide valuable insights into the intricacies of the US healthcare system, which can in turn refine your product development strategy. KOLs can also enhance your company’s board, serving as a significant credibility marker to potential customers and investors.
Huma acknowledges the significance of aligning with individuals who deeply comprehend the company’s vision and products. Its KOL network spans across a spectrum of healthcare professionals including clinicians, physicians, pharmaceutical experts and medtech companies, which significantly bolsters the business’s credibility in a new market. Dr. Ansgar Lange, COO at Nostos Genomics, adopted a similar strategy, enlisting his European KOLs and investors to forge essential connections within the US market. He emphasises the importance of “starting with warm introductions where possible” and trying to have these KOLs in place before moving to the US — “you’ll want to hit the ground running.”
Dr. Thomas Heathman, CCO at Ori Biotech, also advises to “identify KOLs at an early stage and use their expertise to test industry assumptions.” Ori Biotech strategically aligned itself with influential figures and industry giants in genomics, such as Bruce Levine, referred to by Heathman as the “Madonna of cell therapy,” which provided invaluable third-party validation and referencing. With the support of prominent genomics leader Levine, Ori Biotech successfully launched into the US market with a pre-established and internationally recognised level of credibility.
6) Partnerships validate and open doors
Teaming up with major academic centres might be your golden ticket to kickstart the expansion journey. It’s not just validation; it’s a heavyweight endorsement of your company’s credibility. But brace yourself — you might be up against pharmaceutical giants and deep-pocketed competitors for those studies. To stand out, you need to be creative and break free from the mould.
Nostos Genomics has done just this. Realising that he was competing with companies with immense budgets for marketing, sales, and business development, Lange has doubled-down where large corporations cannot: strong customer service, agility and relationship building. Nostos Genomics also provides help with producing scientific research papers, which are particularly relevant and enticing for academics. And these efforts have paid off — Nostos Genomics is currently partnered with multiple major hospitals in New York. So, remember, a single ‘no’ doesn’t shut all doors. There are plenty of other folks within the same establishment who might be able to help and perhaps are more willing, too.
Despite being a prominent UK brand, Huma encountered questions like ‘but how would this work for American patients?’ when engaging with US customers. Their success in the UK and with the NHS certainly opened doors, but Americans were keen to learn how they could use Huma’s technology within their own workflows and clinical decision making. These inquiries were not limited to national boundaries, given state specific insurance plans and regulations. So, even if you’re a slam dunk success in New York, customers could still raise the ‘which insurance plans in Alabama will support this?’ question. While the compelling evidence they amassed in the UK paved the way initially to meetings, Huma also made the strategic move to extend their existing partnership with AstraZeneca to the US market.
Ori Biotech pursued a unique partnership strategy; rather than relying on partnerships as the primary gateway into the US market, the team focused on refining their product with partners that were understanding and forgiving if the product had early imperfections. Inspired by Mike Tyson’s wisdom: “Everyone has a plan until you get punched in the face” the philosophy highlights the importance of rigorous product validation and testing to ensure any major kinks are well ironed out before launching with customers. However, the commitment to continuous improvement did not deter the team from aiming high. Heathman characterises Ori Biotech’s approach as extremely ambitious. “We started by identifying our ideal partners and would then go and land them.” Their bold approach to partnerships is working, with heavyweights like MD Anderson — a leading US cancer care and research institute, ultimately endorsing Ori Biotech.