New rules for digital mental health tech companies

Mental wellbeing has been catapulted to the forefront of priorities since the pandemic, and so have the number of apps and digital products available to support good mental health. From mindfulness techniques to connecting users with therapists, there are a host of tools available.

From a UK regulatory standpoint, digital mental health tech has flown somewhat under the radar. That is until now. The Medicines and Healthcare Products Regulatory Agency (MHRA) has recently announced that some mental health software — including apps, artificial intelligence (AI) powered assessments and virtual reality (VR) therapy tools — now qualify as medical devices.

This means stricter regulations, higher compliance thresholds and more liability for medtech companies. So if your tech falls into that category, it’s time to get familiar with the new rules.

What’s going on with the shift in regulation?

In February 2025, the MHRA released new guidance confirming that some digital mental health technologies now qualify as medical devices.

The new classification means your software might need to meet the same safety and efficacy standards as traditional medical devices. Why? Well, these technologies are increasingly used to make clinical decisions, track symptoms and even guide treatments.

Launched in 2023, this Wellcome-funded project combined the expertise of the MHRA, National Institute for Health and Care Excellence (NICE), NHS experts, researchers and people with lived experience. The aim is to address the growing mental health crisis in the UK by meeting real-world clinical needs.

According to the British Medical Association, even before COVID-19 turned life upside down, mental health issues in England were steadily climbing. In 2000, 17.5% of adults aged 16-64 were living with common mental disorders like anxiety or depression. By 2014, that figure had crept up to 18.9%.

For children and young people, the shift has been even starker. Between 2017 and 2022, the number of 7-16-year-olds with probable mental issues jumped from one in eight to more than one in six. For 17-19-year-olds, it shot up from one in ten to one in four.

At the same time, more people than ever are reaching out for support. Back in 2000, less than a quarter (23.1%) of adults with a common mental disorder were getting treatment. Fast-forward to 2014, and that number had leapt to 39.4% — a 71% increase.

Then came COVID-19, and the demand for mental health services skyrocketed. In 2023 alone, there were a record-breaking five million referrals in England — up 33% from 2019. More and more people are in contact with mental health services, and the pressure is mounting — not just on specialist care but on GPs too, who are still navigating the lasting ripple effects of the pandemic.

This is where digital mental health tools come into play. With significant funding pressures on the NHS, both clinicians and individuals are turning to digital tech to support their diagnosis, treatment and mental health management. Because of this, it’s important the tools they’re turning to are beneficial, safe and trustworthy.

Launching the new guidance, deputy director of innovative devices at MHRA, Rob Reid, said: “Effective and acceptably safe digital tools have huge potential to improve mental health support, making help more accessible than ever.

“This new guidance aims to support safe access to these important tools by clarifying when a product needs regulatory approval and the steps developers must take.

“Maintaining clear and proportionate regulatory standards will ensure that the public can trust these technologies and benefit from the safe, effective mental health support they can provide.”

What qualifies as a medical device now?

So, what falls under the MHRA's regulatory umbrella? It’s important to note that not all mental health tech is affected.

If a digital mental health product is designed to diagnose, prevent, monitor or treat mental health conditions using complex software, it's considered a medical device. This means it must meet specific medical device standards before hitting the market. AI-powered assessments, symptom trackers and VR therapy tools are particularly under scrutiny.

Essentially, if your tech is used by individuals or the NHS, you should be paying close attention. By adhering to these guidelines, developers can boost user confidence in digital mental health tools, ensuring they're both safe and effective.

The guidance offers clarity on several fronts:

Defining purpose

Manufacturers need to articulate clearly what their product is intended to do — this means providing a precise and well-defined intended purpose statement for their tech. This level of clarity helps determine whether the product qualifies as a medical device under UK law and what level of regulation applies.

If a product makes medical claims — like diagnosing, treating or preventing mental health conditions — it’s more likely to fall under stricter MHRA regulation. If it’s purely for general wellbeing, like mindfulness or habit tracking, it might not.

Medical device criteria

Understanding when your tech qualifies as a medical device under UK law is crucial. A digital mental health technology is classed as a medical device if it:

• Diagnoses, prevents, monitors or treats a mental health condition, for example, an app that assesses depression using AI or delivers digital cognitive behavioral therapy for anxiety
• Provides clinical decisions or recommendations that influence treatment, like software that analyses patient data and suggests medication adjustments
• Acts as a substitute for a healthcare professional’s judgment, such as a chatbot that offers mental health diagnoses based on symptoms

If a product does any of the above, it has to go through medical device classification and approval under the UK Medical Devices Regulations 2002. That means manufacturers need to follow safety, performance and data protection standards before their product can be legally sold or used in healthcare settings.

Risk classification

Determining the level of risk associated with the product ensures that regulation is proportionate and appropriate. This means that the MHRA assesses how much potential harm a digital mental health technology could cause if it malfunctions, gives incorrect information or is misused.

The higher the risk, the stricter the regulation. The MHRA uses a risk classification system to decide how much oversight a product needs. Here’s how it works:

• Low-risk (Class I): Minimal impact on health if something goes wrong, like a mood-tracking app that lets users log their feelings but doesn’t provide medical advice
• Medium-risk (Class IIa/IIb): Could affect treatment decisions or mental health outcomes. For example, an AI-powered chatbot that offers therapy exercises based on user responses
• High-risk (Class III): Serious harm or life-threatening consequences if the device fails. Such as a digital tool that recommends psychiatric medications or monitors suicide risk

By classifying a product’s risk level, the MHRA can avoid the over-regulation of low-risk products and ensure that high-risk products meet strict safety standards before being used in real-world healthcare settings.

The idea is to balance safety and innovation — so products that genuinely impact mental health treatment get the right level of scrutiny without unnecessary red tape for simpler wellbeing tools.

What this guidance means for medtech companies

While initially this regulation might seem restrictive — increased regulatory compliance equals stricter checks, documentation and approvals — it also has the potential to open your company up to more opportunity.

While compliance hurdles may slow some companies down, those that get it right could have a competitive edge. NHS partnerships, investor confidence and user trust all depend on strong regulatory credentials.

Non-compliance to the new guidance will be met with both legal and financial consequences. If a product doesn’t meet medical device standards but still hits the market, the MHRA can step in with enforcement action. That could mean fines, product recalls or potentially, legal proceedings.

If a non-compliant digital mental health technology causes harm — whether through inaccurate assessments, misleading claims or technical failures — manufacturers could face compensation claims and serious reputational damage.

This is where having the right insurance in place comes in. It isn’t just a safety net — it can be essential for protecting both your business and your customers.

There are many different types of covers you can consider, depending on your setup. For example, cyber cover, which is designed to support when handling Personal Health Information (PHI). Or, intellectual property cover, which can help safeguard against competitors infringing on your innovations. And where products or apparatus are involved, product liability insurance is designed to support if a defect leads to a claim.

Taking the right precautions now means you can focus on what really matters: pushing the boundaries of medtech with confidence.

Learn more about the insurance you need to win an NHS contract.

Where to go from here

The guidance is effective immediately — from February 2025 — and the MHRA has not specified a formal grace period for affected companies. Manufacturers are being encouraged to engage with the MHRA to discuss compliance strategies and timelines.

If your mental health tech is affected, now’s the time to get your tech in order. Firstly, assess your status — does your product qualify as a medical device? If so, you’ll need to understand the new requirements and update your processes.

Reach out to experts to guide you. By working with legal and regulatory experts, you should be able to navigate these changes smoothly — your broker can support with what this means for your insurance, ensuring you’re covered for any updated liability.

This updated regulation is a sign of how crucial mental health tech has become. And for companies that take it seriously, it’s a chance to stand out, lead the way and turn this into a competitive advantage.