Market Overview

MedTech (Medical x Technology) refers to products or services that incorporate the latest technologies such as AI, IoT, XR (VR: Virtual Reality, AR: Augmented Reality, MR: Mixed Reality), 5G (the Fifth-Generation mobile communications system), and 4K/8K into the medical field, contributing to support medical care, diagnosis, and medical treatment and bringing in new values. There are similar trends in various industries other than medicine, which is called “X-Tech”.

In medicine, product development utilizing cutting-edge technologies such as diagnosis-assisting AI system, surgical operation assistant robot, 8K endoscopic surgery system, etc. is underway, and some of such products are used at some medical institutions. For drug discovery, clinical testing has been started for the drugs derived by AI utilization at a startup company in 2020. Digital technologies have become indispensable in medicine and can be a game changer in this field.

Noteworthy Topics

AI Utilization in Medicine About to Shift from Dawning to Popularization Period

In Japan, AI utilization is increasing especially in image diagnosis that use medical images. Triggered by the endoscopic image diagnosis support system using AI obtaining pharmaceutical approval for the first time, the market launch of products and services is in progress, which has led more than thirty items of AI-used medical equipment centered on radiographic imaging field to acquire pharmaceutical approval or certification.

Building of medical AI platforms that integrate AI-powered products and services has also been underway. For medical image equipment that utilize digital technologies, organizing digital infrastructure including a public medical database has been propelled as a national policy.

In terms of regulations, Japan presses ahead with building of a framework on AI-utilized medical equipment that can be observed in the following efforts: Early approvals of AI products as a countermeasure against COVID-19 infection, introduction of the IDATEN system (improvement design with approval for timely evaluation and notice) which was designed to swiftly allow partial modifications of approvals for medical devices, and working out of “DASH for SaMD” i.e., a practical application promotion package strategy for Software as a Medical Device. These are expected to accelerate the use of AI and digital technologies in medicine.

Future Outlook

AI utilization at medical onsite is expanding, which indicates that the market for AI systems for supporting diagnosis and treatment is shifting from the dawning era to the popularization period.

In the Revision of Medical Payment System for FY2022, “Medical Supervision Premium for SaMD and Other Equipment” has been newly established, and AI utilization has been added to “Premium 3 for Image Diagnosis Management”, contributing to promotion of medical AI from the aspect of policy. At the same time, encouragement of medical treatment using digital technologies has been gaining momentum in the social viewpoint. The government also takes the initiative in reducing the time to develop medical equipment by propelling proactive system reform, which is also expected to help the market expansion.

As a future direction for AI systems for assisting diagnosis/medical treatment, AI technology is expected to be used for a problem-solver in medicine, while comprehensive management and analysis of various development of medical care/treatment data may lead to development of AI that discovers new knowledge, which can expand and diversify the coverage of target diseases and treatment. Furthermore, AI has good affinity with therapies using digital technologies, including DTx (i.e., digital therapeutics*), the cases of which have already been observed overseas. It is hoped for Japan to follow suit to develop new therapies likewise. Generative AIs that create images, voices, text, etc. are also in the spotlight. Though still in the study phase, they are already attempted to be utilized for generating medical images and offering medical information to patients, which can evolve into new solution development.

In the future, increasing number of AI-powered medical products is likely to diversify AI applications. Therefore, AI-assisted diagnosis/medical treatment system market size by the sales of businesses is projected to expand to 16,500 million yen by 2027.

* Reference: “Digital Therapeutics (DTx) Market in Japan: Key Research Findings 2022” released on 12 January 2023
https://www.yanoresearch.com/en/press-release/show/press_id/3160

Research Outline