interviews

From brainstorm to bedside: turning innovative ideas into NHS reality

Karen Livingstone heads up SBRI Healthcare, the innovation-focused competition scheme that funds small businesses who think they can develop solutions to NHS problems. 

There are a vast number of problems needing solutions across the NHS, and while some can be developed internally or procured commercially, others fall in the wide gap between the two.

That is where the SBRI Healthcare programme comes in: offering funding to businesses who can prove they have ideas that, with support and cash, can be turned into products and offerings that will have a real impact on patient care, but which may not be priorities in pure commercial terms.

Its director, Karen Livingstone, told NHE: “The programme is significantly predicated on the ‘need’ premise. We plug the gap and ensure the NHS acts as the ‘intelligent customer’.”

Genesis

The SBRI (Small Business Research Initiative) model has its roots in the American SBIR programme, which has been “adopted and adapted” to the UK context.

The Technology Strategy Board describes it as “a well-established process to connect public sector challenges with innovative ideas from industry, supporting companies to generate economic growth and enabling improvement in achieving government objectives”, and although it is most developed in health and defence, it is now pan-government.

The healthcare initiative began in 2007, initially in the East of England SHA region supported by the regional development agency. It grew, went Midlands & East wide, and is now in place across the national landscape, with the 15 Academic Health Science Networks (AHSNs) involved.

Across the clinical therapy areas for each competition, SBRI Healthcare has assessors – clinical assessors, technical assessors and business assessors – to ensure only the very best ideas get funding.

Livingstone explained: “They draw out the very best in terms of the company’s offer – is this a problem that the NHS is yet to solve?
That’s the key question we ask. In many instances the companies have some really exciting technologies that offer real opportunity for changing the way in which we solve these problems.

“We look at the company’s economic platform, and at their business, and do lots of due diligence. Does it have sufficient expertise, stature, standing and strength to take this through from concept to reality?”

Clinical experts

Under the competition model, companies that do make it through can win substantial amounts of money – up to £100,000 during a feasibility phase, then a potential further cash injection of up to £1m, depending on what happens during the feasibility study. The companies also keep their intellectual property rights generated during the process, with certain rights of use retained by the NHS.

This apparent generosity would inevitably attract chancers and low-quality bids if it wasn’t for the rigour of the assessment process. 

The companies have to pitch Dragons’ Den style for funding as part of the process, and the assessors include very senior clinical experts, venture capitalists who donate their time, and established leaders in the medical technology sector.

Livingstone said: “The funding model works on the basis that we effectively pump-prime the development of the product. The working premise all the way through is that this is something the NHS currently doesn’t have, which if it did, would significantly change the way treatment in that area is offered, and most likely improve patient care quality and NHS efficiency.”

Accelerating innovation

We asked whether SBRI Healthcare filters out companies who could reasonably fund such developments themselves, without public money.

She said: “Not as a rule, though we have had companies who’ve received feasibility money, proven [their product] works, then received huge private sector investment because the idea is then suddenly very exciting to venture capitalists. We’ve said to them, ‘you’re going to take that product through anyway, at which point you don’t need our help’.

“But many companies might develop the product, sometimes in the background, but what we and our funding does is accelerate that. If there’s a problem the NHS needs to solve that we can resolve by accelerating a project, and bring the possibility of a project to market three, five, 10 years quicker, that’s of value to the NHS. In some instances companies may be financially sound and liquid, but this particular project, they don’t see it as commercially viable yet because there’s lots of ifs and buts.

“We do have some medium-sized companies who you’d maybe think could ‘do it themselves’ – and maybe they could, but they will concentrate on the products that have the most commercial value first, whereas some of the products we want have huge value to the NHS but low commercial value.

“Equally, we have some start-ups, spin-outs and SMEs who would simply not survive without our funding support, and the NHS would lose that technology.”

Evidence base

The evidence base for the competition funding model and for awarding grants on an ‘NHS needs’ basis comes from past research, especially an East of England Development Agency commissioned report in 2010, ‘Exploding the myths of UK innovation policy’, by the Centre for Business Research at the University of Cambridge.

That analysed the economics, demography and businesses of the region to establish the factors that help established companies grow and for start-ups to become successful.

Livingstone said: “They found that the key driver of innovation and high-tech business growth was ‘solving customer problems through R&D contracts’.

“The working model previously could be described as ‘clever person comes up with a great idea, write a business plan, raise venture capital, develop the product, put it on the market’.

“But the evidence shows that is not how it works in practice now. Raising venture capital became incredibly difficult, and it’s very illusive in practice now. They don’t invest in high-risk companies or early development stages.”

Intelligent customer

The most successful companies often started as consultancies, who as they became more expert in their fields, spotted opportunities
to develop their own products, developed those and eventually were able to sell not just their skills but their own products.

“The SBRI model was predicated on that basis,” she said. “If we, the NHS, act as the intelligent customer, we need companies to solve our problems. We specify the problem but not the solution.

“I wouldn’t say we don’t need blue skies thinking, full stop, because clearly we do. But in the NHS we’ve always had more research-dominated activity, and less of the customer-problem activity. One reason why SBRI has been grabbed and grown is because there’s been less of an emphasis on that type of approach, but we do need both.”

An evaluation into the success of SBRI Healthcare is currently being undertaken by the well-respected Office of Health Economics. That report should be published in the spring.

The next set of clinical themes have not been finalised so Livingstone could not discuss those, but the next competition is likely to
be launched around May. The box out lists eight companies who won phase 1 development funding in a 2013 competition in the ‘Mental Health’ and ‘End of Life Innovations’ categories.

Funding the future

The future of the SBRI Healthcare programme ultimately depends on government goodwill and funding, but at the moment the signs are all good, and the Treasury seems fully committed. It raised total SBRI funding from £40m in 2012-13 to over £100m in 2013-14, and over £200m in 2014-15.

Of that, this year’s healthcare target has been £30m, and £60m next year (2014-15).

Livingstone said: “The programme is growing in terms of economic commitment, and it’s the Treasury pushing the programme pan-government. They’re pushing it because it supports business growth, and it tackles public sector problems with UK solutions.”