Healthcare: Corporate/Commercial: A UK-Wide Overview

Overview

The UK healthcare sector is currently characterised by cautious optimism, shaped by economic challenges, regulatory reform and rising patient demand. Persistent issues such as inflation and workforce shortages continue to test the sector, but resilience is evident through ongoing investment and a renewed focus on innovation and efficiency.

The 10 Year Health Plan: Transforming Care

The UK government’s 10 Year Health Plan marks a pivotal moment for the NHS and its partners. The Plan sets out a vision to shift care from hospitals into the community, transition from analogue to digital systems, and move from treatment to prevention. Emphasising technology, patient choice and integrated care, the Plan aims to deliver faster access, predictive healthcare and a prevention-first model for the future.

NHS organisations are preparing for neighbourhood health models and a shift in funding from hospitals to community and primary care. This transition is expected to develop collaboratively, with NHS organisations building on existing efforts to create place-based arrangements, flexible procurement, and new payment mechanisms, while reshaping their commercial strategies. Legal considerations are central to establishing these new models, requiring careful attention to collaboration, procurement, and compliance.

Interplay Between NHS and Independent Sector

Providers from both the NHS and the independent sector face a complex economic landscape. Rising operational costs, especially in staffing and energy, have squeezed margins. NHS providers are under increased scrutiny regarding procurement and service delivery, while the independent sector has seen a slight softening in self-pay activity after years of growth, reflecting consumer cost sensitivity. However, demand for insured procedures and diagnostics remains strong, particularly in regions with long NHS waiting times.

The healthcare landscape is increasingly defined by the interplay between NHS and independent providers, driven by structural pressures and evolving commissioning models. The 10 Year Health Plan advocates for a broader ecosystem of providers, including community-based services. A more integrated approach is needed to allow patients to move seamlessly between NHS and independent health services. Independent providers should anticipate more opportunities to partner with the NHS, especially in areas of high need and innovation, such as tackling waiting lists and joint ventures on NHS private patient units.

Government policy now explicitly supports deeper NHS-independent sector collaboration, catalysing M&A activity. Investors are targeting scalable providers delivering elective and diagnostic services. Investor appetite for healthcare assets remains robust, with long-term demand fundamentals attracting private equity and strategic buyers. Consolidation is active, with bolt-on acquisitions and platform investments driving deal flow.

Regulatory and Legal Considerations

Transactions in the sector require specialist regulatory due diligence, considering the complex framework within which providers operate – from Care Quality Commission (CQC) inspection and rating to enforcement activity and prosecutions. Understanding the risks associated with managing vulnerable or high-risk patients and the resulting regulatory scrutiny is essential. Sector-specific insight on compliance with health information law is also crucial to manage regulatory risks for buyers, sellers, and investors.

Increased collaboration between the NHS and independent health providers brings procurement into focus. The Procurement Act 2023 has replaced the previous EU-derived public procurement regime, marking a shift toward more flexible, principles-based procurement. The new framework introduces streamlined procedures, enhanced transparency and a central digital platform for tendering. While reforms are broadly welcomed, NHS organisations and suppliers require ongoing support to implement and understand the new regime. Commissioning NHS healthcare services under the Provider Selection Regime is another area where clients regularly seek advice, with commissioners needing assurance of robust decision-making and providers concerned about market entry or expansion opportunities.

Investment and Innovation in Life Sciences

The UK life sciences sector benefits from world-class research institutions, a strong biotech base and government support through the Life Sciences Sector Plan. The sector is experiencing a resurgence, with substantial recent deals in biopharma and strategic partnerships in biomarkers and precision medicine.

The UK is globally recognised as a leading hub for clinical research, with government efforts focused on making the country a global leader in clinical trials and life sciences innovation. New clinical trials regulations, set to enter force in 2026, represent the most significant overhaul of UK clinical trial legislation in two decades. The reforms aim to streamline processes, reduce bureaucracy, and align with international standards, with faster approvals and risk-based regulation for lower-risk trials. Sponsors and contract research organisations will need to update internal processes and governance frameworks to ensure compliance, but the changes are expected to improve trial efficiency and transparency.

With increased inbound investment in the life sciences sector, international clients – particularly pharmaceutical manufacturers and contract research organisations – require support in establishing a UK presence. Specialist advice on regulatory aspects is essential for corporate transactions, with deep, life sciences-focused due diligence needed for buyers, sellers and investors.

Medtech Trends

The UK medtech sector is experiencing rapid growth, driven by strong private equity activity and evolving healthcare needs. The 10 Year Health Plan provides further incentive for medtech businesses to engage with the NHS on digital, AI and data-driven solutions. Digital transformation, including a single patient record, expanded NHS App, and AI-enabled care, is central to the Plan.

Key trends include use of AI in diagnostics and real-time remote monitoring via next-generation wearable devices. Digital health platforms act as “digital front doors”, enabling remote consultations, care co-ordination and patient engagement. Virtual wards and remote monitoring are scaling nationally to reduce hospital admissions.

Scale-ups are introducing innovative technology and new models of care to improve patient outcomes. Digital health companies increasingly require advice on whether their software or AI products fall within the Medicines and Healthcare products Regulatory Agency (MHRA) remit, either as Software as a Medical Device or AI as a Medical Device. The UK is also an attractive destination for international medtech companies seeking to expand.

Legal support is critical for entrants navigating NHS structure, regulatory landscape and commercial environment. Advisers must understand market norms, procurement processes and supplier requirements for both NHS and independent healthcare sectors. Healthcare-specific corporate expertise is essential for supporting inbound M&A, investment structuring and governance.

Growth in the medtech sector is occurring alongside a major transformation of the UK’s medical device regulatory framework, led by the MHRA. The aim is to modernise the post-Brexit regime, enhance patient safety and support innovation. As of June 2025, new post-market surveillance rules are in force. Further legislation in 2026 will introduce updated pre-market requirements, including streamlined UKCA marking, international recognition routes for devices approved in trusted jurisdictions, and enhanced standards for software and AI. Transitional arrangements allow CE-marked devices on the GB market until 2028–2030, but manufacturers will require support to adapt to new requirements.

Outlook

The UK healthcare sector is expected to see continued consolidation and innovation, set against significant regulatory reform and a changing relationship between the NHS and independent sector. While economic pressures may temper short-term growth, long-term fundamentals remain strong, and the UK continues to be a compelling market for international healthcare businesses seeking to expand.

Specialist legal support is crucial for both current players and new entrants, helping them deliver strategic transactions, navigate NHS procurement and commissioning pathways, and comply with a changing regulatory regime. The sector’s complexity demands not only legal expertise but also market knowledge, commercial insight and adaptability. As healthcare evolves, those who anticipate challenges and seize opportunities will be best positioned to thrive.