Don’t Let Compliance Kill Your Burn Rate: 7 Smart Ways to Plan for Regulatory Expenses in Life Sciences

The right compliance plan (even when not 100% accurate) can make a big difference: it adds a layer of oversight to R&D.

Every ambitious biotech, medtech, or healthtech startup is chasing innovation. But between scientific breakthroughs and market launch lies a formidable gatekeeper: regulatory compliance. Whether you're navigating FDA approvals, clinical trials, or international standards, these hurdles are more than just paperwork, they're significant financial commitments that can sink even well-funded startups if mismanaged.

The worst part? Most founders don't plan for regulatory expenses until it's too late.

This post breaks down seven must-know considerations that will help you budget smarter, move faster, and stay investor-ready while keeping your regulatory strategy under control.

1. Know Your Regulatory Pathway from Day One

Before you pitch investors or set timelines, understand which regulatory pathway your product falls under. Is it a Class I, II, or III device? Are you going the 510(k) route, PMA, IND, or BLA? Each path comes with drastically different cost structures and timelines.

How to tackle this: Engage a regulatory consultant early on to map this out. A misstep here can lead to six-figure detours.

2. Budget for Preclinical and Clinical Study Costs

Preclinical and clinical work is all about regulatory-grade data. Studies must be designed to meet GLP/GCP standards and stand up to regulatory scrutiny.

Factor in:

• CRO fees

• Study monitoring

• Protocol development

• IRB submissions

• Participant recruitment

These line items easily run into hundreds of thousands (sometimes millions) and often require multiple iterations.

How to tackle this: Make sure you have accurate and updated budgets in place for this items for every product you are developing.

3. Understand the True Cost of Submissions

Filing with the FDA, EMA, or other agencies is not a flat fee. The actual cost includes:

• Regulatory affairs consultants

• Medical writers

• Statistical analysts

• Fees for agency review (e.g., FDA user fees)

Plus, you may face refuse-to-file letters, requiring resubmissions and more spending.

How to tackle this: Always budget for at least one round of revisions.

4. Plan for Ongoing Compliance, Not Just Approval

Many startups treat regulatory as a one-time milestone. It’s not.

Once approved, you’ll need to fund:

• Post-market surveillance

• Adverse event reporting systems

• Annual filings

• Inspections and audits

If your budget stops at approval, you're setting up for cash crunches later.

How to tackle this: Build a multi-year compliance roadmap.

5. Account for Global Expansion Costs Early

Thinking about selling in the EU, UK, or Canada? Each region requires unique regulatory submissions, translations, and certifications (CE Mark, MHRA, Health Canada, etc.).

The cost of duplicating or adapting your U.S. dossier can be steep. Even deciding which country to enter next should factor in the cost-efficiency of its regulatory regime.

How to tackle this: make sure you have re-run all costs (check #2 and #3) and update the local compliance and regulatory fees and workstreams.

6. Factor in Regulatory-Ready Documentation Systems

You can’t fake compliance. Regulators will demand traceability, data integrity, audit trails, and version control. That means investing early in:

• Electronic Quality Management Systems (eQMS)

• Document control platforms

• Validation processes

How to tackle this: Budget $20K–$100K annually depending on scale, and be ready to train your team on the systems.

7. Model Delays and Regulatory Feedback Loops

Regulatory review timelines are notoriously uncertain. The FDA might ask for clarifications or new data. Ethics boards may stall your trial approvals. International regulators may push back on formats or claims.

How to tackle this: Build delay buffers into your timeline and cash flow forecasts. A well-padded financial plan impresses investors more than an overly optimistic Gantt chart.

Conclusion

Planning for regulatory costs is a strategic move. Life sciences founders who anticipate the costs, delays, and hidden traps of the regulatory process can maintain their spend rate, create better traction, and attract investors without scrambling for bridge rounds.

Always remember: it doesn’t matter how good your science is if you run out of money before approval.

Treat regulatory like your business depends on it.

Because it does.