The Regulatory Maze: Why Digital Health Startups Struggle to Scale in Europe

Europe is one of the toughest regions to scale digital health products — not because innovation is lacking, but because regulation is complex, fragmented, and constantly changing.

Research from the European Observatory on Health Systems shows that digital health companies face major barriers in:

• unclear requirements

• inconsistent national interpretations

• long approval times

• lack of operational guidance

  
  

A study from the EU’s Joint Research Centre highlights a “regulatory-ops gap”: startups know what rules exist, but not how to operationalize them efficiently.

Recent policy updates — including the AI Act and revisions of the Digital Services Act — create even more uncertainty. Regulators are trying to simplify, but changes often make companies freeze decisions while waiting for clarity.

The result for scale-ups:

• slowed product velocity

• too many hours spent understanding compliance

• dependency on expensive consultants

• fear of making the wrong move

  
  

Innovation doesn’t fail because of ideas. It fails because of complexity and operational bottlenecks around regulation.