Building a digital health company isn’t cheap, and regulatory compliance is a major chunk of that cost.
If you’re developing a healthcare solution, you’ll likely spend anywhere from $75,000 to $250,000 just to clear the regulatory and security hurdles needed to launch.
That price can shoot past $500,000 if you’re dealing with FDA approval for a complex, regulated product.
But what exactly do these costs cover? And more importantly, how can you focus your spending? Let’s break it down in a way that helps you plan wisely.
Understanding the Regulatory Landscape
Healthcare is one of the most regulated industries for a reason. Patient safety, privacy, and security are non-negotiable, and compliance with HIPAA and where required, the FDA, isn’t optional.
The problem is, navigating this landscape can feel like solving a Rubik’s cube blindfolded. In the U.S., regulatory oversight primarily falls under a few major players:
- FDA: If your product makes medical claims, such as diagnosing, preventing, treating, or curing medical conditions (e.g., as a clinical decision-support tool or a digital therapeutic), it likely requires FDA clearance or approval.
- HIPAA: Any platform handling Protected Health Information (PHI) must meet strict privacy and security requirements.
- Security Certifications: Many healthcare customers require SOC 2, HITRUST, or ISO 27001 certification before they’ll even consider using your solution.
- State and Federal Regulations: Telehealth laws vary by state, and you’ll need legal guidance to navigate those nuances.
The Digital Health Regulatory Cost Breakdown
To help you understand where the money goes, let’s look at the common expenses tied to compliance efforts.
| Regulatory Component | Estimated Cost | What It Covers |
| Regulatory Assessment & Planning | $10,000 – $30,000 | Early evaluation of your compliance needs, regulatory strategy development |
| FDA Submission (if required) | $50,000 – $250,000+ | Includes legal fees, submission preparation, clinical data costs (if needed) |
| HIPAA Compliance | $25,000 – $75,000 | Privacy/security audits, data protection measures, documentation |
| Security Certifications | $20,000 – $100,000 | SOC 2, HITRUST, ISO 27001 audits, penetration testing, risk assessments |
| Legal & Regulatory Guidance | $15,000 – $50,000 | Contract reviews, data-sharing agreements, compliance policies |
For simpler applications, your costs might land closer to the lower end of this range, but if you’re working on something FDA-regulated, get ready to write bigger checks.
What Drives These Compliance Costs Higher?
Complexity is the biggest factor in how much you’ll spend. If your product interacts with medical devices, requires clinical validation, or processes sensitive patient data, expect higher regulatory costs. The same goes for any software that uses AI for diagnosis or decision-making.
For example, a wellness app that tracks steps, hydration, and minimal PHI might only require HIPAA compliance and SOC 2 certification. Contrast this with a digital therapeutic that helps manage diabetes with AI-driven recommendations. That’s an entirely different ballgame with FDA submissions, clinical validation, and legal reviews that can push costs past $500,000.
Reducing Regulatory Costs Without Cutting Corners
While spending on regulatory compliance is costly, there are ways to control costs.
Start Compliance Work Early
Many startups treat compliance as an afterthought. That’s a mistake. If you don’t bake compliance into your development process, you’ll end up spending more fixing things later. Compliance issues caught late in the development cycle can lead to product delays, unexpected costs, and sometimes even having to rebuild parts of your solution.
Use Pre-Built Compliance Tools
Using SOC 2 automation platforms and HIPAA-compliant cloud providers can save you thousands of dollars in security and compliance costs. Rather than reinventing the wheel, leverage existing infrastructure and tools that already meet regulatory standards. Cloud providers such as AWS, Google Cloud, and Microsoft Azure offer healthcare-specific solutions designed to accelerate compliance efforts.
Phase Your Certification Approach
Not every certification is needed upfront. If you don’t need HITRUST immediately, start with SOC 2 and build up from there. The same goes for FDA submissions—consider launching a non-regulated version first while preparing for full approval. This phased approach allows you to allocate resources more efficiently while still meeting the necessary compliance benchmarks as you grow.
Engage the Right Experts
Regulatory consultants can be expensive, but they can also help you avoid costly mistakes. A good consultant can save you six figures by streamlining your compliance process. Instead of blindly navigating regulations, working with an expert ensures you focus on what’s necessary and avoid unnecessary spending on redundant compliance efforts.
What’s Next?
If you’re building a digital health product, compliance isn’t a one-time cost—it’s an ongoing investment. Regulatory laws evolve, security standards change, and customers will expect continued compliance updates. The best way to stay ahead is to plan for these costs early and structure your roadmap around them.
Almost every digital healthcare startup runs into this problem. Some handle it well, others get buried rework. If you know what you’re building, understand the rules upfront and budget realistically. In the end, you’ll save yourself a lot of headaches. A good launch means you’re compliant without wasting time and money—get it wrong, and you’re stuck in an endless loop of delays and legal fees.
Four Ways I Can Help
I work with digital health companies to cut through the noise and focus on what actually matters for compliance. Whether you’re a startup figuring out HIPAA for the first time or a growing company navigating FDA submissions, I can help you:
- Assess your regulatory risk and prioritize what needs to be done first
- Develop a practical compliance roadmap that doesn’t slow down product development
- Connect with trusted legal and regulatory experts who won’t waste your time
- Optimize your security and certification process to meet healthcare customer demands
The goal isn’t just to check regulatory boxes—it’s to get your product to market efficiently, safely, and with minimal roadblocks. If you want to take a thoughtful, methodical approach to compliance, get in touch at astrunk@accretiveedge.com.
