Alacramed’s work on the Medical Technologies Science & Innovation Audit (Leeds City Region)(1), sponsored by the Department for Business, Energy and Industrial Strategy, identified technology convergence as being one of the leading drivers in the growth of the global medtech industry. The combining of technologies such as artificial intelligence, wireless communication, mobile health apps and wearables for data capture has been integral to enhancing existing products and developing new product groups and services. With market growth rates in these converging technology groups significantly higher than the growth rate of the medical technologies industry overall, no healthcare stakeholder can afford to ignore the opportunities that convergence presents.
A significant, perhaps the most significant, trend in healthcare product innovation is the combining of different medical technologies to deliver more effective products. A number of rapidly developing technologies are being brought together to drive product enhancements and to create completely new product types. Examples where this is happening are:
Medical devices and information technology
This involves the sharing of medical information between medical devices and IT applications/networks. Commonly, this includes the exchange of patient and medical information, such as vital signs, patient alarms, radiographic images, cardiac waveforms or clinical laboratory results. It also includes planned and/or implemented treatments, prescribed drugs and patient histories. The objective of such systems is to permit all of the health professionals involved in a patient’s care to have instant access to current information about that patient. The systems can also be adapted for use by hospital and government administrators, as well as by researchers focusing on healthcare costs and by those assessing the clinical effectiveness of specific treatments. Many medical products such as patient monitoring systems, drug delivery pumps, and endoscopes can take advantage of IT systems to store, analysis and communicate data and images.
Artificial intelligence applied to medical devices
Artificial intelligence (AI) can be defined as the intelligence demonstrated by machines or software with the ability to depict or mimic human brain functions (2). AI in healthcare aims to improve patient outcomes by assisting healthcare practitioners in using and interpreting medical knowledge. AI systems have the potential to provide physicians and researchers with clinically relevant, real-time, quality information sourced from data stored in electronic health records for immediate needs. AI healthcare applications are forecast to achieve rapid adoption globally, with a CAGR of 42% until 2021 to reach $6.6B (2). Improving patient outcomes, reduced treatment costs, and elimination of unnecessary hospital procedures with easier hospital workflows and patient-centric treatment plans are the prime reasons for the wide adoption and successive growth of the AI market in the healthcare industry. In the future, conditions such as cancer are expected to be diagnosed in minutes using cognitive systems that identify typical physiological characteristics in scanned medical images. By 2025, AI systems are expected to be implemented in 90% of the USA and 60% of the global hospitals and insurance companies (2).
Computer aided surgery
Computer aided surgery (CAS) combines imaging with robotics, and is already well established in neurosurgery, and is becoming more common in other surgical areas, including trauma, cardiac, and gynaecological procedures. Image-guided surgical systems usually consist of an imaging component and a surgical tracking component, which together create 3D images of the relevant anatomy. CAS allows some procedures to be performed that, because of unusual anatomic features or obscured visibility, would not be possible with conventional surgery. CAS also enables surgeons to frequently check their progress and positioning (for example, the location of instruments relative to a tumour) during surgery. Some CAS systems incorporate intra-operative imaging technology that allows live images to be taken and recorded during surgery. CAS can lead to improved surgical outcomes, reduced complications, and shorter recovery times. CAS can work with advanced robotic systems to automate surgical procedures. Global annual revenue from robot assisted minimal access surgery was ca $4B in 2016 and is forecast to grow to $20B by 2025, representing ca 50% CAGR (3).
Smart drug delivery devices
The decreasing price and increasing availability of technologies and devices (such as smart phones), the general increase in digital acumen of most demographics of the population, and pharma’s need to provide services that are both around and beyond the pill, are all contributing to the trend toward smart medical technologies being developed alongside drugs to transform the value chain. Today’s technologies go beyond just collecting data and feeding it back to the end-user/physician. It also analyses the data making it possible to ascertain how well a patient is responding to the treatment plan and allows modifications to be made at an earlier stage of the disease progression. Medtech/pharma deals increasingly appear in the news and new medtech products and advancements in digital and connected health technologies are being heralded as value-adds to medicines. Innovative drug delivery systems, wireless monitoring devices, and smart diagnostic monitors are now being associated with pharmaceutical drugs through such collaborations. For example, auto-injectors can facilitate easier self-administration, improved patient compliance, and reduced anxiety and dosage errors. Smart diagnostic meters can store and analyse, and then communicate patient test results to clinicians. GSK and Propeller Health’s development of next generation smart inhalers for asthma and chronic lung disease, represents a step forward in monitoring whether patients are using inhalers correctly and will provide pharma with key information about how well compliance relates to the safety, efficacy and economic benefits of the drug.
Mobile health apps, social media, and wearables for data capture are now transforming the way healthcare is delivered. The size of the global digital health market (comprising wireless health, electronic health records, telehealth among others) is forecast to increase from ca. $61B in 2013 to ca. $233B in 2020, representing more than a 20% CAGR (4).
MARKET GROWTH IN CONVERGING PRODUCTS
The combination of medical technologies has been integral to enhancing existing products, and developing new product groups and services, for a number of years now. This convergence has infiltrated almost all medtech sectors. As far back as 2007, more than 20% of Medtronic’s revenue came from convergence products, including pumps, drug-coated stents and tissue regeneration devices (5). However, recently growth in convergent technology products has accelerated in new sectors, such as digital health, robotic surgery, and AI. In these new areas market growth rates have been estimated as between 20-50% (2,3,4). This is significantly higher than the base growth rate of the medical technologies industry overall, which was estimated as 5.2% in 2015 (6). The global digital health market alone has been forecast to be $233B in 2033 (4). If this was the case it would represent a significant 30% of the medical technologies market by that time. While emerging economies are going through rapid expansion and their healthcare spend is increasing at a faster rate than developed economies, there are a number of barriers to their adoption of the more advanced and technologically sophisticated convergent technology products. These include: limited GDP per capita; constrained medical infrastructure beyond the major cities; acceptability among clinicians and patients due to limited awareness and training. This leads the authors to believe that the developed economies represent the major opportunities for convergent technology products in the near future. This is likely to change if income, medical infrastructure, awareness and consumer demand change in favourable directions in the future.
- A number of rapidly developing technologies are converging and having a major influence on the development and enhancement of medical devices to deliver more effective products. These technologies include, artificial intelligence, Information technology, computer aided surgery, mobile health apps, wireless communication, wearables for data capture.
- The growth of the market for products that incorporate these technologies is significantly higher than the growth rate of the medical technologies market overall.
- It is believed that the major opportunities for these technology convergent products in the short to medium term will be the developed economies, but that in the longer term emerging economies will represent an increasing share of the market.
- Healthcare stakeholders, such as manufacturers, healthcare providers, investors and insurers cannot afford to ignore the new technologies and should be actively seeking and analysing new opportunities for their application.
- Deloitte Report. 2016 Global Healthcare Outlook. Battling costs while improving care.
- Destination 2025, Focus on the future of the Medical Device Industry. A collaboration between The Biobusiness Alliance of Minessota and Deloitte Consulting LLP.