Recommendation 16 Is the One of the 44 That Decides Whether a British SME Can Compete

Simon Rasalingham

Oct 9

6 min read

Updated: 7 hours ago

Author: Simon Rasalingham, 2026 On 6 October the government published its response to the National Commission into the Regulation of AI in Healthcare. It accepted all forty-four recommendations.

Most of the coverage stopped at that sentence.

Forty-three of those recommendations improve how we regulate AI in healthcare inside the United Kingdom. They are worth having. But only one of them changes what a British company can do outside it, and if you are running a small life sciences or medical AI business in this country, it is the only one I would read twice.

It is number sixteen.

What recommendation 16 actually asks for

The Commission, chaired by Professor Alastair Denniston and Professor Henrietta Hughes OBE, put it under the heading of recognition and reliance pathways and international harmonisation.

It asks the MHRA to keep advancing international harmonisation of software and AI-enabled device regulation, by sharing what it has learned about proportionate, lifecycle-based regulation. And it asks the MHRA to introduce recognition or reliance pathways for relevant devices with trusted international regulators, where doing so serves patients' interests.

The government accepted it. The response says the MHRA will continue working through the International Medical Device Regulators Forum and through its bilateral and trilateral relationships with regulators including the FDA, Health Canada and the TGA, and that it will pursue this as part of its 2026 economic growth goals.

Further details by Spring 2027.

Everything else is about how we regulate. This is about whether any of it travels

Here is the distinction that matters, and it took me three regulatory submissions to learn it properly.

A domestic regulatory improvement makes your life easier while you are selling in Britain. A recognition pathway changes what your British approval is worth when you walk into a room in Boston or Melbourne.

Those are not the same thing, and only one of them decides whether you can build a company of any scale from a UK base.

Today, a UKCA mark is a permission to sell into one market of sixty-eight million people, most of whose purchasing runs through a single customer with a procurement cycle you can measure in years. An FDA clearance is a permission to sell into a market of three hundred and forty million people with thousands of independent buyers, and it is the credential that American investors, American health systems and most international distributors actually recognise.

That asymmetry is not a complaint about British regulation. The MHRA has been a serious and constructive regulator in my experience. It is a statement about market size, and about which pieces of paper open which doors.

I still tell British founders to build their evidence here

This is the part people expect me to get wrong, so let me be clear about it.

Build your regulatory evidence in the United Kingdom.

The AI Airlock, the MHRA's sandbox for AI medical devices, now has multi-year funding, confirmed in the government's Regulation Action Plan progress update this summer. Since April 2026 the MHRA and NICE have run an aligned advice pathway, intended to close the gap between regulatory approval and NICE guidance by three to six months. That target is framed around medicines rather than devices, but the direction is the same and the machinery is being built.

Build here. Generate your evidence here. Learn what your device does and does not do here, where the cost of learning it is lowest.

Then go FDA first

And when the evidence exists, take it to the FDA before you take it anywhere else.

Until recognition and reliance is real rather than intended, a UKCA mark does not create the commercial opportunities that an FDA clearance does for a British SME. That is the arithmetic as it stands today, and no amount of wishing changes it.

I have a few scars on this one. I have written separately about where a British SME should start between EU MDR, FDA and UKCA, and the conclusion I reached there has not moved.

Recognition is already the direction of travel elsewhere

Recommendation 16 is not an outlier. It is the sharpest expression of something already visible across government.

The MHRA's own economic growth goals, published in July, commit to a major medical technology reform package by April 2027 that includes indefinite recognition of CE marking, subject to consultation. The Regulation Action Plan progress update commits the forthcoming Regulating for Growth Bill to faster recognition of trusted international approvals.

So the principle is accepted. Britain is willing to rely on other people's work when it saves duplication.

Recommendation 16 asks for the same principle to run the other way, for Britain to build the relationships that make a British approval count somewhere else. That is harder, because it depends on regulators who are not ours agreeing to it.

What would have to be true for me to change my advice

I am asked this a lot, so here is the test I will actually apply.

A named counterpart regulator and a named device class. Working through IMDRF is a process, not a pathway. I want to know which regulator, for which devices.

A published route with a timetable. Not a statement of intent. A document a founder can read that tells them what to submit and how long it takes.

Evidence that it runs in both directions. Recognition of other people's approvals into the UK helps British patients. Recognition of UK approvals abroad helps British companies. Only the second one changes where a founder incorporates.

At least one company through it. I will believe a pathway exists when somebody has used it.

If the Spring 2027 detail delivers those four things, I will change my advice publicly and gladly. If it delivers a restatement of commitment to harmonisation, nothing will have changed except the date.

Recommendation 16 will not do it alone

Every Budget is consequential. This one will shape the platform of the coming election, sooner rather than later I suspect, and with it the chances British entrepreneurs can capture over the next five years. Many will decide whether they stay here at all.

I remember vividly, as a kid in the eighties, watching the BBC News and listening to people talk about the brain drain. Add the AI revolution to that and it is a tsunami, not a trickle. It has never been easier to set up a business in the United States.

I have set out what I would want from this Budget elsewhere. The prize is a trillion dollars added to the UK economy over the next decade, living standards restored, and a country that can build the next industrial revolution.

Recommendation 16 is the piece of that which costs the Treasury nothing.

Three takeaways

1) Build your regulatory evidence in the United Kingdom. The sandbox is funded, the advice service is running, and access to your own regulator is an advantage you will not have anywhere else.

2) Go FDA first. Until recognition and reliance exists in practice, that is where the commercial doors are.

3) Watch Spring 2027, and judge it against the four tests above rather than against the press release.

You cannot time regulation. I learned that the hard way when a NICE guideline multiplied demand for a service we had spent a decade building. But you can make sure that when the rules move in your direction, you are already holding the thing they require.

Author: Simon Rasalingham, 2026