The term “femtech” – short for female technology – is used to describe the rising trend of applications, devices, products and diagnostics catering to the needs of women’s health. Pitchbook estimates that in 2019 the global femtech market generated $820.6 million and could reach at least $3 billion by the end of 2030.
Despite its popularity, femtech remains a significantly underdeveloped area of health tech. A mere 4% of all healthcare research and development is targeted specifically at women’s health, even though women spend an estimated $500 billion annually in medical expenses.
The origins of femtech can be traced back to the 1960s, where the women’s movement focused on sexuality, family and reproductive rights. It was not until 1960 (100 years after the first rubber condom was produced) that the U.S. Food and Drug Administration (FDA) approved the combined oral contraceptive pill Enovid, which became known as “the Pill.”
It was only five years later that the U.S. Supreme Court, in Griswold v. Connecticut, ruled that the private use of contraceptives was a constitutional right.
One roadblock to progress in femtech was the exclusion of women from clinical trials. Less than 25 years ago, FDA policy recommended excluding women “of childbearing potential” from Phase I and early Phase II drug trials, including women who used contraception, were abstinent, or whose husbands were vasectomized.
Then, in 1986, the National Institutes of Health (NIH) established a policy that encouraged researchers to include women in studies. Three years later, NIH announced that research solicitations should encourage the inclusion of women and minorities.
Still, for the next several years, the inclusion of women in clinical research was strictly NIH policy, not law. Significant change came in 1993 when the FDA explicitly reversed the 1977 recommendation that excluded women with childbearing potential from early clinical studies.
Despite these advances, addressing women’s health issues through research funding still came up short. When the drug Sildenafil (a.k.a. Viagra) was approved for use in erectile dysfunction by the FDA in 1998, health issues faced by women – including sexual and menstrual wellness, fertility, endometriosis and menopause – were still considered taboo by many.
To help address these problems, Ida Tin, who coined the phrase “femtech,” and other femtech innovators came forward. Women were no longer forced to wait for others to invest the time and money on research and development to act. Tin launched “Clue,” a menstrual cycle-tracking application. Tin’s application became a harbinger for other women’s health initiatives seen today.
Investors are just now starting to catch on, recognizing an opportunity to reach a vastly underserved market, which also happens to be half the population. Femtech posted $592.1 million in VC investment in 2019. However, despite these advances, one of the biggest challenges remains that most of the investment community is still male.
According to a research project from the Women and Public Policy Program at Harvard Kennedy School, only 21% of all investment professionals – and approximately 11% of investing partners – are women. Around three-quarters of U.S. VC firms do not have a single female partner, and 85-90% of founders receiving VC funding are male.
This gap is thought to be, in part, due to male investors not personally identifying with women’s health issues, which has also arguably led to a paucity of femtech exits.
While there’s no denying femtech’s value from a financial perspective, there are also myriad legal issues that the industry is facing. With so many of the applications requiring users to provide health and other related information, data privacy and cybersecurity issues are important concerns to femtech executives and lawyers up.
These issues include HIPAA, CCPA and GDPR and a patchwork of state biometrics laws, which are forcing the industry to carefully navigate their approach on personal issues like fertility and women’s health. That’s why it’s important that investors take data privacy and security seriously and investigate whether their products call for FDA or other regulatory oversight or clearance.
The future of femtech looks bright. While some remnants of taboo-like thinking toward women’s health issues still exist, there are also signs of hope as more companies are sponsoring family-friendly services such as Milk Stork, a breast milk shipping company, and Carrot, which offers fertility benefits.
Investors are finally taking notice. It is safe to say that the rise of femtech has been a long time in the making and a welcome arrival.
About the authors:
Danny Tobey is a medical doctor and software entrepreneur, as well as an experienced attorney with the firm DLA Piper, who represents life sciences, technology and healthcare clients in a variety of regulatory and litigation matters. He leads a team that assists companies navigating the legal landscape of emerging and disruptive technologies, including AI and data science, and is a thought leader on legal issues in medicine and AI.
Ossie Ravid is an attorney with the firm DLA Piper who focuses her practice in the area of tax.