Luxembourg’s healthtech industry shows promising growth but faces substantial legal hurdles. Drawing from his expertise in the field, Maître Olivier Wies, a lawyer at Wies Law Luxembourg, sheds light on strategies for healthtech startups to manoeuvre the legal complexities.
How would you describe the legal landscape for healthtech startups in Luxembourg?
The legal landscape for healthtech startups in Luxembourg is characterized by a mix of opportunities and challenges. While the government actively promotes innovation, most startups, whether new or old, must navigate a labyrinth of regulations from both the European Union and Luxembourg.
At present, one of the most critical regulations is the General Data Protection Regulation (GDPR), which ensures the protection of patient data and imposes strict guidelines on its collection, processing, and storage. Additionally, compliance with the Medical Device Regulation (MDR), which governs medical device manufacturing and distribution, is essential.
This is why all startups entering the healthtech space in Luxembourg must prioritize patient safety, data protection, and compliance with regulatory standards.
Given the complexities in the regulations, would you recommend any amendments to the regulations?
Just mere simplification of regulatory procedures and streamlined processes would alleviate the burdensome complexity and time-consuming tasks currently faced by startups. Addressing the hurdles encountered during the transition from development to commercialisation is essential to support startups in navigating regulatory requirements effectively and facilitating quicker market entry.
For instance, I see immense potential in introducing tax incentives tailored to the healthtech sector to stimulate investment, foster growth and enable startups to scale their operations. This would collectively contribute to creating a conducive environment while ensuring compliance with regulatory standards and prioritizing patient safety.
“I would highly encourage companies to adhere to the GDPR and other privacy laws, including Luxembourg’s civil code, which is a top priority to avoid legal repercussions.”
Me Olivier Wies, a lawyer at Wies Law Luxembourg
What are the most common legal challenges faced by healthtech startups in Luxembourg, and how can they prepare for them?
Securing funding and investments is a significant challenge, especially considering the extended turnaround time inherent in heavy R&D, documentation, regulatory approvals, high initial costs, and long product development cycles.
To succeed in this competitive landscape, collaborating with fellow founders, seeking legal guidance, and engaging with local entities such as LuxInnovation and the Luxembourg Health Tech Cluster can provide invaluable insights and support. Furthermore, startups should actively explore the diverse funding opportunities available through national research funds, digital innovation hubs, and the Ministry of Economics.
What are the legal considerations for fundraising and investment in the healthtech sector, including securities laws and disclosure requirements?
Truth be told, nearly half of the healthtech companies incorporated in Luxembourg are less than 9 years old, indicating a relatively youthful market. As a result, laws and regulations are still evolving, adapting to better serve the needs of an emerging ecosystem.
Before stepping into securing funding and investments, startups must conduct thorough due diligence, and ensure transparency about financial status, IP ownership, and ongoing legal matters to assess financial health, and the suitability of potential investors. The main goal is to be transparent and keep financial information safe.
Lastly, does AI pose any legal implications for healthtech startups?
Well, ethical considerations are paramount, so founders need to design processes keeping in mind the well-being of patients and fairness at the very core. I would highly encourage companies to adhere to the GDPR and other privacy laws, including Luxembourg’s civil code, which is a top priority to avoid legal repercussions.
I understand that the potential criminal liability can not only come from internal negligence but also from any third party or outsider given the use of AI. Therefore, startups must comply with privacy laws and respect patient privacy rights, emphasizing anonymization and privacy-preserving algorithms, especially while transmitting sensitive information.
This article was first published in the Silicon Luxembourg magazine. Read the full digital version of the magazine on our website, here. You can also choose to receive a hard copy at the office or at home. Subscribe now.
