Stacey B. Lee, JD, CEO at Praxis Pacisci

Regulatory inefficiency in healthcare isn’ t merely bureaucratic – it’ s a market distortion with measurable economic costs. Nowhere is this more evident than in the FemTech sector, where outdated frameworks impose significant burdens and delay the introduction of innovative health technologies for women. Recent

analyses show that approximately 60 % of FemTech start-ups identify regulatory compliance as their primary barrier to market entry. The cost of navigating this system can exceed US $ 1 million per product, while the approval process itself can take up to two years – delays that are especially crippling for early-stage companies. These obstacles don’ t just hinder innovation; they limit access to advanced healthcare solutions for half the population, suppressing both health outcomes and economic growth.

Despite being projected by McKinsey to reach US $ 60 billion by 2027, the FemTech sector remains severely undercapitalised. According to Rock Health’ s 2023 digital health funding report, FemTech received just 1.4 % of healthcare R & D funding. This misallocation of capital does not stem from weak market potential, but from regulatory ambiguity that discourages investment. Venture capital naturally gravitates towards technologies with clearer regulatory pathways – even when they’ re less impactful. The result is market inefficiency at scale, where breakthrough innovations are sidelined in favour of safer regulatory bets.

A market-based regulatory solution

The impact of regulatory inefficiency extends beyond medical devices. Recent FTC settlements with fertility apps over privacy violations underscore the lack of regulatory consistency in digital health. Meanwhile, the potential expiration of federal telehealth flexibilities in 2025 poses a substantial threat to the momentum of virtual women’ s health services.

According to the Centre for Connected Health Policy, these flexibilities – which ended on 31 March 2025 – could disrupt care delivery models that have proven both cost-effective and patientcentred during the pandemic era. These examples illustrate that the issue is not limited to a single regulatory bottleneck – it reflects a broader, systemic inefficiency suppressing growth across the healthcare innovation ecosystem.

The history of FDA modernisation shows that removing regulatory inefficiencies typically enhances both market efficiency and safety by bringing innovations into proper frameworks faster. When regulatory frameworks keep pace with innovation, markets function as they should: rewarding breakthrough technologies that solve real problems while generating economic returns. The FemTech sector offers a perfect opportunity to demonstrate this principle in action, with benefits extending far beyond women’ s health to the broader economy.

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