The expansion of European small and medium-sized enterprises (SMEs) into the healthcare innovation arena suggests that this should be an important EU policy priority that can significantly benefit the economy, society and citizens, including patients. Deepening and widening of Europe's SMEs' growth and activities is part of the EU objectives as set out by the European Commission in its Communications "Small Business Act" for Europe [<xref ref-type=»bibr» rid=»ref1»>1</xref>] and "Small Business, Big World" [<xref ref-type=»bibr» rid=»ref2»>2</xref>]. However, innovative healthcare SMEs have struggled to get traction despite the sector being worth more than EUR 250 billion. The 1991 Maastricht Treaty gave the Union new competences in public health and more scope for cross-border cooperation in this area [<xref ref-type=»bibr» rid=»ref3»>3</xref>]. Nevertheless, health initiatives here have tripped over each other, due to the fact that the delivery of healthcare is a national competence [<xref ref-type=»bibr» rid=»ref4»>4</xref>]. As such, EU healthcare-driven policy has never truly found its footing as a singular policy area despite the fact that a tenth of the EU's GDP is spent on healthcare and more than 17 million people are employed in Europe in this sector [<xref ref-type=»bibr» rid=»ref5»>5</xref>]. Taking into account the necessity of bringing innovation into healthcare, and the willingness of SMEs to undertake the risk to be at the forefront of it, there is a need for a renewed effort to support SMEs so as to provide solutions for citizens and patients throughout the bloc in different healthcare settings [<xref ref-type=»bibr» rid=»ref6»>6</xref>]. This policy paper brings together two separate strands of analysis: firstly, a policy review of the main challenges and opportunities; secondly, a proposal for policy recommendations.