• MedTechs have experienced significant transformation through mergers and acquisition (M&A) to achieve steady growth, diverting resources from innovative research and development (R&D) initiatives
  • The industry’s M&A activities were fueled by a prolonged period of low interest rates and easy access to capital
  • Consequently, R&D efforts focussed on incremental improvements rather than breakthrough innovations
  • This financial-centric business model led to risk-averse bureaucracies among many MedTechs, resulting in a strategic deadlock with limited growth prospects
  • Adding to the challenges, the current era witness’s debt and asset prices surpassing productivity and economic output
  • For many MedTechs, these macro-economic conditions potentially pose funding constraints, reduced market demand, tightening regulatory challenges, cost pressures, and market volatility, further hindering their ability to overcome the deadlock
  • To address these issues and help MedTechs break free from their strategic deadlocks and create long-term value we propose seven strategic initiatives
The Financialization Dilemma of MedTechs
In the 1990s and 2000s, medical technology companies received praise for their rapid growth. However, they currently find themselves at a crucial juncture, facing challenges of low and stagnant growth rates. Additionally, an uncertain long-term outlook looms over them due to the expansion of global balance sheets surpassing GDP, as well as debt and asset prices outpacing productivity and economic output. This Commentary aims to shed light on how many MedTechs reached this strategic deadlock. It also proposes strategies that these companies can pursue to break free from this predicament, which have the potential to significantly enhance growth rates, improve balance sheet health, and foster value creation.
An era of low interest rates and cheap capital

The financialization of MedTechs has played a significant role in their current strategic deadlock, and the most viable solution lies in accelerating productivity. This financialization was facilitated by a prolonged period of low interest rates and easy access to inexpensive capital. Over the span of four decades, starting from the 1980s to the early 2020s, interest rates steadily declined across most industrialized nations. In the aftermath of the 2008-09 financial crisis, many countries adopted a low interest rate environment to stimulate economic recovery and restore liquidity in their banking systems. For example, the US Federal Reserve Board (Fed) lowered short-term interest rates from 4.25% in December 2007 to nearly zero by December 2008, registering the lowest rate in the Fed's history.
During the era of persistently low interest rates and readily available capital, MedTechs experienced a surge in merger and acquisition (M&A) activities, primarily targeting companies in near-adjacent sectors to capitalize on low-risk opportunities for incremental growth. This trend fostered a culture of consolidation, driven by the desire to access new technologies and broaden product portfolios. While M&A activities bolstered short-term profits and shareholder value, they often led to a neglect of research and development (R&D) initiatives. Acquisitions were perceived as a less risky and quicker avenues for expanding product lines, overshadowing investments in R&D. Consequently, many MedTechs adopted a risk-averse approach, channeling their R&D efforts towards incremental improvements of existing products rather than pursuing ground-breaking innovations that could significantly improve patient outcomes and disrupt the industry. Moreover, the increasingly stringent regulatory environment for medical devices, particularly in Europe, further discouraged companies from investing in R&D due to longer development timelines and escalated costs.
Over the years, these policies resulted in the consolidation of power and resources among a few large players, leading to the emergence of market oligopolies and the decline in industry diversity. This scenario posed challenges for smaller companies with innovative ideas, as they struggled to compete with established enterprises, thereby impeding both innovation and healthy competition. Moreover, established MedTechs benefited from the significant and rapidly growing healthcare demands in affluent Western markets, particularly North America and Europe, which account for ~65% of the global medical device market. In these markets, compensation was often tied to medical and surgical procedures rather than focussing on patient outcomes, further favouring the established industry players. While M&A can be an effective growth strategy, it is important for companies to strike a balance and prioritize innovation alongside their consolidation efforts to ensure sustainable success and drive meaningful advancements in the industry.
An era of surging prices and low productivity

We have now entered a distinct era that differs significantly from the previous era characterized by low interest rates, and easily accessible funds. Starting from March 2022, the Fed has implemented 10 consecutive rate hikes, bringing its benchmark rate to 5.25%. These increases, coupled with high leverage in the corporate sector, escalating geopolitical tensions and  instability in the banking world triggered by the Silicon Valley Bank (SVB) collapse in March 2023, compounds the challenges faced by MedTechs. Furthermore, global balance sheets have expanded at a much faster pace than Gross Domestic Product (GDP). Debt and asset prices have surged far more rapidly than productivity and economic output. This trend is underscored by a report published in May 2023 by the McKinsey Global Institute, which reveals that the past two decades have resulted in the creation of US$160trn in paper wealth but have been marked by sluggish growth and the rise of inequality. According to the report, every US$1 invested has generated US$1.9 in debt.
Strategic initiatives to adapt and thrive

When global balance sheets expand at a faster rate than GDP and debt and asset prices outpace productivity, it becomes a concerning sign for MedTechs who find themselves trapped in a strategic deadlock characterized by sluggish growth and a fading belief in long term value creation. Under these conditions, companies should expect to encounter funding limitations, decreased market demand, stricter regulatory obstacles, cost pressures, and increased market volatility. In such a testing business environment, it is important for MedTechs to adopt bold adaptive strategies and navigate wisely to ensure continuous growth and enhanced value. We suggest seven such initiatives that are likely to help MedTechs break free from their strategic cul-de-sacs. By implementing these with vigour, companies can position themselves for success in an ever-changing and demanding economic and geopolitical landscape.
1. Revamp R&D
In recent times, costs associated with MedTech R&D have escalated. A study published in the September 2022 edition of the Journal of the American Medical Association (JAMA), and carried out by the US government’s Office of Science and Technology Policy, found that the development cost for a complex therapeutic medical device, from proof of concept through post approval stages, is US$522m. Significantly, the nonclinical development stage accounted for 85% of this cost, whereas the US Food and Drug Administration (FDA) submission, review and approval stage comprised 0.5%.
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Re-imagining healthcare
Thus, MedTechs have the potential to optimize their R&D processes, enabling them to develop more swiftly and economically ground-breaking devices that result in enhanced patient outcomes and expanded market share. To achieve this, companies may consider the following strategies to improve their R&D processes: (i) Integrating artificial intelligence (AI), machine learning, and big data techniques into their R&D endeavours and harnessing the power of these advanced technologies. (ii) Collaborating with academic institutions and start-ups to gain access to novel innovations and expertise. This collaboration can involve joint development and co-creation of innovative offerings. To tap into a diverse pool of expertise and resources, companies should consider a platform-based approach to R&D, which potentially improves the capacity to drive breakthrough advancements that improve patient care. (iii) Implementing agile methodologies to accelerate the R&D process, which involves breaking projects into smaller, more manageable segments and swiftly iterating based on stakeholder feedback. (iv) Engaging patients in the design process to ensure that newly developed offerings cater specifically to their needs, ultimately enhancing patient satisfaction.
2. Emphasize patient-centric care
Enhancing patient-centric care to improve outcomes is a crucial factor in the future of healthcare provision. There is a growing body of evidence indicating that patient choices will have an increased influence on the provision of healthcare over the next decade. With patients having more options and autonomy, MedTechs can leverage patient-centric strategies to better understand and address their needs, ultimately leading to improved market share. To achieve this, companies must prioritize effective communication, product education, and support services to build stronger relationships with patients. This requires increased utilization of electronic health records, advanced AI, data analytics capabilities, active engagement with patient communities, leveraging social media platforms, establishing patient advisory boards, and forging partnerships with payers and providers.
Further, embracing value-based care models is important for MedTechs. By prioritizing positive patient outcomes over quantity, companies can contribute to the development of sustainable care. As global healthcare systems transition toward value-based care, MedTech companies should align their offerings accordingly. Emphasizing solutions that enhance patient outcomes, reduce healthcare costs, and provide overall value positions, MedTechs become indispensable partners in the evolving healthcare landscape. This also may involve developing outcome-based pricing models, implementing remote monitoring solutions, and demonstrating real-world evidence of product effectiveness.
3. Revitalize organizational and operating models
Revitalizing organizational and operating models is essential for MedTechs to boost their growth rates and adapt to a rapidly evolving market. While companies experienced significant growth in the past, recent trends have shown a shift towards risk-averse bureaucracies, accepting modest annual growth rates as the "new normal". To overcome this stagnation and meet evolving customer demands, traditional MedTechs should consider embracing agile and flexible structures.
By flattening hierarchies and fostering cross-functional teams, organizations can facilitate faster decision-making processes. Implementing lean manufacturing and optimizing operational processes can reduce waste, enhance productivity, accelerate time to market, and lower costs. Leveraging AI-driven data analytics enables the extraction of valuable insights from vast datasets, empowering MedTechs to anticipate customer needs and market trends.

4. Harness the power of digital, AI and big data
Digital transformation has become a necessity rather than a choice. Although companies like Stryker and Siemens have championed digitalization, widespread implementation still remains a challenge. Indeed, Siemens’ suggests digitalization is “something that is often talked about but not fully implemented”. Previous Commentaries have shown how MedTechs can employ digital technologies to improve products, streamline operations, enhance customer experiences, and reduce costs. Streamlining operations and optimizing costs without compromising quality is crucial in the face of escalating economic pressures. This may involve re-evaluating supply chains, improving manufacturing processes, and adopting digital solutions.
In today's rapidly evolving digital age, investing in digital and analytics capabilities has become indispensable for companies as they shape their R&D, hone their processes and shift to a customer-centric stance. The seamless integration of digital and AI-driven techniques, along with data-driven decision processes, has emerged as a crucial factor in maintaining and improving competitiveness. For MedTechs, it is imperative to cultivate a culture of innovation that encourages and rewards experimentation and risk-taking. By doing so, organizations create an environment where employees are empowered to explore ideas, learn from failures, and ultimately drive meaningful innovations.  Therefore, actively seeking external partnerships with technology companies, start-ups and academic institutions is a strategic move for MedTechs to access cutting-edge technologies and expertise in digital and analytics. By embracing these capabilities as core rather than adjunct components of their strategies, fostering an innovation-centric culture, and investing in talent development and retention, corporations position themselves optimally to leverage the transformative potential of digital and analytical technologies. This, in turn enables them to thrive in an increasingly interconnected and data-driven healthcare ecosystem.

5. Talent acquisition and retention
The rapidly changing landscape of globalization, the increasing influence of AI techniques, and the demands of a new generation of consumers seeking personalized experiences have compelled MedTechs to reassess their approach to talent acquisition and retention. To keep up with the pace of change, it is crucial for these companies to attract and retain highly skilled professionals with expertise in technology, healthcare, and business. A talented workforce plays a vital role in driving innovation, ensuring efficient and safe processes, navigating complex market dynamics, and effectively executing growth strategies. To achieve this, companies should invest in the development of their employees, foster a culture of innovation, and offer competitive compensation packages to attract and retain top performers.
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According to a study published by the Harvard Business Review in January 2020, retaining top talent has become increasingly challenging for employers. The study revealed that in 2018, 25% of employed Americans left their jobs, with approximately 33% of this turnover attributed to unsupportive management and a lack of development opportunities. MedTech companies are not exempt from this trend, and to acquire and retain talent, they must strategically revamp their value propositions to align with the evolving needs and expectations of the modern workforce.
A crucial step in this direction is fostering a purpose-driven culture that highlights the significant impact medical technology companies have on improving people's lives. By instilling a sense of purpose, employees are more likely to develop a strong connection to the company's mission, inspiring them to consistently deliver their best work. Furthermore, providing ample career development opportunities is essential in empowering employees to enhance their skills and progress in their professional journeys. This can be achieved through training programmes, mentoring initiatives, and leadership development schemes.
Recognizing the importance of work-life balance is also critical. MedTechs can prioritize flexible working hours, a 4-day week, remote work options, generous vacation policies, allowing employees to effectively balance their personal and professional lives. By creating a supportive environment that promotes overall well-being and job satisfaction, companies can foster employee loyalty.
Competitive compensation and benefit packages are essential. Additionally, a commitment to diversity and inclusion is pivotal for MedTechs aspiring to become employers of choice. By emphasizing diversity in hiring practices and cultivating an inclusive work environment where every individual feels valued and respected, corporations can attract and retain a diverse array of talent. This, in turn, creates an environment conducive to enhanced innovation, creativity, and problem-solving.
Despite best efforts, there may be instances where companies are unable to attract and retain individuals with the necessary capabilities. In such cases, strategic partnerships, joint ventures, licensing agreements, and co-development initiatives allow MedTechs to tap into external expertise and resources, which can be employed to enhance product portfolios and gain access to new markets.

6. Realize global opportunities
MedTechs, traditionally reliant on most of their revenues from affluent US and European markets, now have the chance to expand their horizons and explore the untapped potential of the rapidly growing markets in Asia, Middle East and Africa, and Latin America. These regions boast transitioning demographics, with aging populations and a surge in chronic diseases. Additionally, their large and expanding middle-class populations demand advanced care, prompting governments to increase their healthcare expenditures significantly. By venturing into and expanding their footprints in these markets, Western MedTechs can diversify their revenue streams and leverage the growth opportunities stemming from the escalating demand for cutting-edge medical technologies and services.
Expanding into emerging markets not only provides a means to mitigate risks associated with economic volatility and changing regulatory environments but also necessitates acquiring new capabilities, fostering a change in executive mindsets, and embracing flexible pricing models. By adapting to the unique demands and challenges of these markets, MedTechs can position themselves strategically to tap into the vast potential they offer. This expansion serves as a catalyst for sustained growth and allows companies to seize opportunities that would otherwise remain untapped, thus bolstering their long-term success.

7. Align with rising ESG standards
To fully leverage their capabilities and resources and meet rising standards in ESG (Environmental, Social, and Governance), MedTechs might consider taking bold actions that: (i) embrace sustainable manufacturing practices to minimize their environmental impact, which entail reducing waste, water, and energy consumption, as well as transitioning to renewable energy sources. Such practices contribute to environmental conservation and mitigate a company’s carbon footprint, (ii) adopt circular economy principles, which involve designing products with a focus on reusability and recyclability. Additionally, establishing take-back programmes for end-of-life products, which ensure responsible disposal and encourage the reuse of valuable materials, thereby reducing waste and promoting sustainability, (iii) develop products that improve patient health, safety, and overall quality of life. This requires a patient-centric mindset, discussed above, that emphasizes the social impact and positive contributions MedTechs can make to society, (iv) produce offerings that are accessible and affordable to all segments of society. By addressing underserved communities and partnering with them to provide better healthcare solutions, companies can contribute to reducing healthcare disparities and promote equitable access to quality care, (v) enhance transparency and accountability, which includes setting clear targets, regularly measuring and reporting progress, and disclosing ESG performance, and (vi) engage with stakeholders, such as investors, customers, payers, employees, and patients, to better understand their expectations and concerns regarding ESG issues. Such a bold proactive approach to ESG issues contributes to a more sustainable and equitable world, strengthens a company’s reputation, and fosters its long-term success.
In today's rapidly evolving and technology-driven world, a successful pivot for MedTechs, which have been financialized and now find themselves in a strategic cul-de-sac, requires a simultaneous introduction of the suggested strategic initiatives, rather than a sequential approach. To regain high growth rates and create long-term value, MedTechs must:
  1. Revamp R&D efforts to develop innovative solutions and services that address evolving market needs, prioritizing cost-effectiveness, and improved patient outcomes as primary drivers of value creation.
  2. Prioritize patient-centric care by delivering solutions and services that significantly enhance outcomes, establishing a reputation for consistent value provision.
  3. Revitalize outdated organizational and operating models through increased collaboration with industry stakeholders, enabling accelerated technology development and adoption. This ensures alignment with patient needs and facilitates swift market entry.
  4. Harness the transformative power of digital technologies, AI, and big data to unlock new possibilities for innovation, efficiency, and personalized healthcare experiences.
  5. Attract, retain, and develop talent equipped with 21st-century capabilities while fostering a purpose-driven culture that fuels innovation and drives organizational success.
  6. Recognize and capitalize on the vast and rapidly expanding opportunities present in emerging markets, approaching them with a strategic mindset.
  7. Align with ascending ESG standards, demonstrating a commitment to sustainability, ethical practices, and social responsibility, which reinforces the credibility and long-term viability of MedTechs.
By embracing these strategies simultaneously, corporations position themselves to navigate policy shifts, overcome global uncertainties, and take advantage of evolving technologies, which stand them in good stead to enhance their growth rates, and significantly improve their value.
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  • Advanced wound care is a large and fast-growing global market currently dominated by North America and Europe  
  • In the next decade, Asia-Pacific, the Middle East and Africa and South America regions are expected to become significant wound care markets
  • Price sensitive Western MedTechs with wound care franchises might be challenged to penetrate these under-served rapidly growing emerging regional markets
  • Innovative technologies that currently contribute to advanced wound care include growth factors and cytokines, stem cells, tissue engineering, regenerative medicine approaches, and 3D bioprinting
  • Each has technical and clinical challenges likely to present obstacles for their future growth
  • 3D bioprinting however appears well positioned to eclipse competing technologies and disrupt the global advanced wound reconstruction market in the next decade
3D bioprinting and the advanced wound care market

3D bioprinting is a relatively new and innovative medical technology. Although in its infancy, it has established a market presence of ~US$1.3bn, and, over the next four years, its market value is projected to increase at a compound annual growth rate (CAGR) of ~21% and reach >US$3bn by 2027. An earlier Commentary drew attention to the technology’s likelihood to impact several aspects of healthcare. Here we assess 3D bioprinting’s potential near-term influence on the advanced wound care market compared with competing technologies.
A silent epidemic

Chronic wounds have become a large and fast-growing silent epidemic. They are difficult to heal because of aggravated underlying causes such as diabetes, obesity, and an aging population. Such wounds increase morbidity and mortality and inflict substantial medical, economic, and social burdens on healthcare systems globally. For instance, the mortality rate of neuropathic foot ulcers, the commonest wound associated with diabetes, is comparable to that of cancer (~30%), and cost more to treat. In the US, ~10% of the population (~30m) have diabetes, and $1 out of every $4 in healthcare costs is spent on caring for people with the condition, and the total annual cost of diabetes ~US$327bn. Further, each year, ~2m people living with the condition develop a diabetic foot ulcer (DFU) or other difficult to heal wounds. The US National Institutes of Health (NIH) estimate the annual cost of treating DFUs to be between ~US$9bn and US$13bn, which is in addition to the cost of treating diabetes and excluding the huge costs associated with treating venous leg ulcers and pressure ulcers each year. The US government has increased its effort to introduce new and advanced products for chronic wounds, with the aim to offer effective and affordable treatment to a large and growing pool of elderly patients. By 2060, the nation’s geriatric population is projected to be >77m, suggesting an increase in the 2% of Americans currently suffering chronic wounds. Similarly in England, where >11m people, (~19% of the population) are ≥65 years. A 2017 study estimated that the annual cost of managing chronic wounds and associated comorbidities for seniors by the country's National Health Service (NHS) was £5.3bn.
Rapidly developing therapies

Without appropriate care chronic wounds may not heal properly, leading to pain, decreased mobility, other long-term complications, and death. Wound healing is a dynamic and complex process of repairing or replacing damaged or lost tissue and its goal is to restore the structure and function of an affected tissue as closely as possible to its pre-injury state. Over the past two decades there have been significant advances in technologies to treat chronic wounds, some of which are reviewed in this Commentary. Today, >3000 products have been developed to treat different types of wounds by targeting various aspects of the healing process. There are several approaches to wound repair, including the use of advanced wound dressings, skin substitutes, growth factors, and regenerative medicine techniques.

However, despite decades of R&D and advances in the management of chronic wounds, they remain an under-served, yet fast growing, therapeutic area. This is partly due to the lack of comprehensive assessment and diagnostic tools and the significant time and medical resources that their management consume. However, artificial intelligence (AI) techniques are beginning to be used to help medical professionals and institutions automate wound care assessment and thereby save valuable resources. For example, KroniKare, a start-up based in Singapore, has developed the KroniKare Wound Scanner, a handheld tool that employs multi-spectral scanning techniques that can assess a chronic wound in ~30 seconds, which enables quick and accurate treatment. The scanner has been clinically validated by the Singapore government’s Health Sciences Authority as a Class-B registered diagnostic AI device.

In this Commentary

This Commentary provides a brief history of the wound reconstruction market. North America and Europe represent the largest share of the advanced wound care market, which is currently valued at ~US$11bn, growing at a CAGR of ~5.7%, and projected to reach ~US$16bn by 2028. We draw attention to the fact that the market is changing with a growing presence of the Asia-Pacific, the Middle East, and Africa and South America regions: all with vast and rapidly growing populations, expanding middle-class segments demanding enhanced wound care and governments committed to increasing their expenditures on wound healing. Traditional US MedTechs, which currently dominate the wound care market, may struggle to increase their franchises in these emerging markets due to a range of factors including regulatory complexities, unique healthcare challenges, price sensitivity, and logistical challenges. The Commentary describes several innovative wound care products and the leading corporations developing and marketing them. These offerings include growth factors and cytokines, stem cells, tissue engineering, regenerative medicine approaches, and 3D bioprinting. For each we briefly describe the main technical and clinical obstacles they need to overcome to increase their impact on the chronic wound care market. The Commentary concludes by summarising the limitations of several advanced wound care offerings and suggests reasons why, in the next decade, 3D bioprinting is likely to eclipse competing technologies and disrupt the global wound reconstruction market.
Brief history

Complex wound reconstruction is a relatively new field that has emerged over the last few decades. Advances in medical devices and clinical techniques have allowed for the successful treatment of wounds that were previously considered untreatable. In the early 1990s, the concept of wound bed preparation was introduced, which emphasized the need to prepare a wound before applying any kind of dressing or treatment. This involved removing dead tissue, and controlling infection, to promote healthy tissue growth. In the late 1990s and early 2000s, tissue engineering and regenerative medicine emerged as promising fields for complex wound healing. These focused on using biological materials, such as stem cells and growth factors, to stimulate tissue growth and regeneration.
In 1996, the US Food and Drug Administration (FDA) approved the Integra Dermal Regeneration Template, a manufactured collagen matrix with a claim of regenerative dermal tissue designed as a skin replacement, and initially used in patients with extensive burns with insufficient donor tissue for coverage. In 1998, Apligraf became the first commercially available, FDA approved, product containing living cells, to treat venous ulcers that failed to respond to conventional treatments. It is a synthetic skin created from harvested infant foreskins and produced and marketed by Organogenesis, a US corporation based in Massachusetts. In 2000, the product obtained further approval for the treatment of diabetic foot ulcers. In the years since, other products containing living cells for wound healing have gained regulatory approval and are used to treat a range of complex wounds.

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In addition to advances in technology and treatment options, there has also been a growing recognition of the importance of a multidisciplinary approach to complex wound reconstruction. This involves teams of healthcare professionals, including wound care specialists, plastic surgeons, and rehabilitation professionals, working together to develop comprehensive personal treatment plans for individual patients.
Despite these advances, the clinical assessment and management of chronic wounds remain challenging owing to their long-term treatment regimens and complex wound healing mechanism. Various conventional approaches including cell therapy, gene therapy, growth factor delivery, wound dressings, and skin grafts are being utilized to promote healing in different types of wounds. However, such therapies are not satisfactory for all wound types, which creates a need to develop newer and innovative treatments. In recent years, innovative wound healing technologies have made progress and continue to evolve. These include stem cell therapies, bioengineered skin grafts, and 3D bioprinting, which all focus on skin regeneration with minimal side effects. According to a 2023 report by Tracxn, a MedTech research platform, globally there are ~580 companies producing wound care offerings.
A fast-growing global market

Wound reconstruction is a large and rapidly growing segment of the medical technology industry. According to a 2022 Fortune Business Insights report, the global advanced wound care market is projected to grow from ~US$11bn in 2021 to ~US$16bn in 2028 at a CAGR of ~5.7% in forecast period. Its expansion is driven by several factors, including: (i) an aging global population: ~10% of the world’s ~8bn people are ≥65 years and this age group is expected to increase to ~17% by 2050. Older adults are more prone to chronic wounds due to decreased skin elasticity, poor circulation, and other factors, (ii) increasing worldwide prevalence of chronic wounds such as diabetic foot ulcers, venous leg ulcers, and pressure ulcers, (iii) advances in wound care technologies, including growth factors, stem cell therapies, biomaterials, and regenerative medicine approaches, (iv) increasing healthcare spending: governments and healthcare systems throughout the world are investing more in advanced wound care, and (v) increased public awareness of the importance of wound healing.
Significant regional markets

Advanced wound reconstruction markets vary in different regions of the world. Currently, North America is the largest, and expected to be valued at ~US$5bn by 2027, followed by Europe, which is currently valued >US$3bn with a projected 4.2% CAGR over the next four years. Here we draw attention to emerging markets of the Asia Pacific, Middle East and Africa (MEA) and South America regions.
The Asia-Pacific region has substantial growth potential particularly in India, China, and Southeast Asia. These regions have vast, aging populations, governments increasing healthcare expenditure, high incidence of chronic diseases, and a rising awareness of the importance of wound care among large and rapidly growing middle classes. In China (population >1.4bn), for instance, the wound reconstruction market is expected to grow significantly driven by: (i) an aging population - by 2040, ~402m people, (28% of the population) are expected to be >60 years, (ii) national efforts to improve healthcare infrastructure, (iii) increasing investment in medical research, and (iv) rising incidence of chronic diseases that require wound management. India (population ~1.4bn), is also a substantial potential market with a growing demand for advanced wound care solutions, increasing healthcare expenditure, and a rising number of government initiatives to improve healthcare services. Southeast Asia, which includes Indonesia (population ~280m), Malaysia (population >32m), Thailand (population >70m) and Vietnam(population ~100m), also represent significant growth potential for the wound reconstruction market. 
The Middle East and Africa (MEA) region is expected to have substantial growth potential for wound healing due to increasing medical management expenditure, improving healthcare infrastructure, and a rising number of government initiatives to improve wound care. Although this region is a diverse and complex healthcare market, there are several countries within it with significant growth potential for wound care. For instance, in the Middle East, the United Arab Emirates (population ~9.5m) is a wealthy market with a rapidly developing healthcare infrastructure, increasing demand for advanced wound healing solutions, and a high prevalence of diabetes-related wounds. Saudi Arabia too is a substantial potential market, driven by a large and growing population (~36m), increasing healthcare expenditure, and rising awareness of the importance of wound care management. In Africa, South Africa (population >61m) has a large and advanced healthcare system, increasing demand for complex wound care solutions, and a high prevalence of diabetes-related wounds.
South America is expected to experience significant growth in the wound reconstruction market, driven by increasing awareness of its importance, rising demand for advanced wound recovery solutions, and a growing number of government initiatives. Several countries in the region have substantial market growth potential, including: (i) Brazil, the largest economy in the region, with a population of ~217m and high incident rates of chronic wounds, (ii) Argentina (population >46m), which has a large healthcare sector and a growing demand for advanced wound care products and services, and (iii) Colombia, with a growing economy and a large population (>52m), is emerging as a key regional player in wound care solutions and services.
Leveraging opportunities in emerging markets
Many Western MedTechs are ill equipped to leverage the opportunities in emerging regions of the world with underserved, growing advanced wound care markets. North America and Europe account for ~55% of the global medical technology market and provide the largest share of MedTechs’ revenues. It is in these wealthy regions that most company executives have spent most of their professional careers and therefore have had little or no in-country experience of emerging economies. For decades, North American and European healthcare systems rewarded medical activity rather than patient outcomes and this drove high growth rates, significant profit margins, and industry expansion without much risk or in-depth strategic thinking. Such conditions, complemented by substantial periods of low interest rates and cheap money, encouraged the financialization of the medical technology industry: companies used mergers and acquisitions (M&A) to pursue scale and consequently became bigger but not necessarily better. Today, the ten largest medical device corporations account for >40% of the sales in a global market of ~US$490bn. The market has become an oligopoly, which emphasizes size and tends to blunt competition. Although such conditions are changing and having international experience, a global mindset, and R&D knowhow are increasingly valued, there is still a significant reliance on legacy products marketed predominantly in wealthy Western nations. Even now, relatively few company leaders have had in-depth experience of emerging regions of the world, where differences in language, competition, regulations, and culture create barriers to their ability to understand and navigate the nuances of these markets.
Wound healing technologies
The development of new wound healing technologies is an area of active R&D in the medical device industry, which aim to accelerate the healing process and improve outcomes for patients. Here we provide a flavour of these.
(i) Growth factors and cytokines
A promising area of research to stimulate wound healing is the use of growth factors and cytokines. These are naturally occurring proteins in the body that play a key role in the healing process. Researchers are exploring ways to use these proteins in wound care products to promote tissue regeneration and accelerate wound repair.
There are several MedTechs with offerings in this area. UK based Smith & Nephew markets a range of wound healing products, including biologic agents that contain growth factors and cytokines. The company’s REGRANEX Gel, which contains recombinant platelet-derived growth factors (PDGF), received FDA approval in 1997, and is used to treat diabetic neuropathic foot ulcers. Acelity, a Texas-based privately held company founded in 1976, manufactures and markets several advanced wound care products, including biologic agents that contain growth factors and cytokines. The company’s VAC VeraFlo Therapy with Prontosan, received CE Mark in 2017 and combines negative pressure wound therapy [a method of drawing out fluid and infection from a wound to help it heal] with a solution that contains cytokines and growth factors to help promote wound healing. Nasdaq traded Integra LifeSciences develops and markets wound healing products. The Integra Flowable Wound Matrix contains growth factors and is used to treat chronic wounds. Osiris Therapeutics, founded in 1993 and based in Maryland, USA, specializes in regenerative medicine and has a range of products to promote wound healing, including Grafix, a human placental membrane that contains growth factors and cytokines. NYSE traded MedTech, Stryker markets numerous advanced wound care products, including biologic agents that contain growth factors and cytokines. Its key product in this area is MIST Therapy, which is a painless, non-contact, low-frequency ultrasound treatment delivered through a saline mist containing cytokines and growth factors to promote wound healing.
Growth factors and cytokines are proteins that are produced naturally by the body. Replicating their production in a laboratory setting can be challenging and result in high production costs and thereby limit their accessibility and affordability. Also, these molecules are quickly broken down and cleared from wound sites, which limits their effectiveness to promote healing. Developing methods to increase their stability and longevity is crucial to improving their efficacy.
While growth factors and cytokines have shown promise in preclinical studies, clinical trials have not always demonstrated consistent benefits in wound healing, and this raises some concerns about their potential for adverse effects such as allergic reactions or immune system activation. The success of these molecules in promoting wound healing depends on their ability to effectively interact with a complex network of cells in a precise and targeted manner, which can be challenging to achieve.
(ii) Stem Cells
In recent years, stem cell-based therapies for wound healing and skin regeneration have garnered much interest owing to their potential to morph into different types of cells that promote tissue regeneration and accelerate wound healing. Researchers are exploring the use of various types, such as mesenchymal stem cells (MSCs) [multipotent stem cells found in bone marrow]; adipose (body fat)-derived stem cells (ASCs), [a subset of MSCs, which can be obtained easily from adipose tissues and possess many of the same regenerative properties as other MSCs], and pluripotent stem cells (iPSCs) [cells that can develop into many different types of cells or tissues in the body]. These present the main sources of stem cells that are utilized for wound healing and skin regeneration.
While there are many products on the market, the leading MedTechs using stem cells for wound healing include Acelity, whose flagship offering is the RECELL Autologous Cell Harvesting Device, which uses patients’ skin cells to promote healing in chronic wounds and burn injuries. Organogenesis’s Apligraf, mentioned above, contains stem cells. Integra LifeSciences’s Dermal Regeneration Template, also mentioned above, is a matrix of bovine collagen and glycosaminoglycan molecules that contains autologous stem cells [stem cells removed from a person, stored, and later given back to the same person] to promote tissue regeneration. And Smith & Nephew’s PICO Single Use Negative Pressure Wound Therapy System, which uses a proprietary dressing with stem cells to promote healing in chronic wounds.

Despite stem cell-based therapies being common and effective for the promotion of wound healing, there are challenges associated with their source, genetic instability, potential immunogenicity, risks of infection and carcinogenesis and high processing costs. Stem cells are a complex and heterogeneous population of cells that are sensitive to their environment, and replicating their production in a laboratory can be technically demanding and costly. They have the potential to differentiate into various cell types and promote tissue regeneration, but if not appropriately controlled, they can form tumours. Developing methods to ensure the safety and efficacy of stem cell-based therapies and minimising the risk of tumour formation are crucial to their future impact on the wound care market.
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(iii) Tissue engineering
Tissue engineering is another approach being explored for wound healing. This involves a combination of cells, engineering, materials, methods, and suitable biochemical and physicochemical factors to restore, maintain, improve, or replace different types of biological tissue. Researchers have developed tissue-engineered skin substitutes that can be used to promote wound healing and tissue regeneration in patients with chronic wounds. Leading MedTechs with advanced products in this area include Acelity, Organogenesis, Integra LifeSciences and Smith and Nephew.
There are non-trivial challenges associated with the production and maintenance of functional and viable tissue engineered constructs in a laboratory setting. The technology requires the growth of cells on scaffolds or matrices that mimic the extracellular matrix of the target tissue. The process of creating these involves multiple steps, including cell isolation, seeding, differentiation, and integration with the host tissue. Ensuring the quality and functionality of these constructs is demanding, and replicating such processes in a large-scale production setting is time consuming and costly. Another technical challenge is the need for a vascular network to support the growth and survival of the engineered tissue. The lack of blood vessels can limit the delivery of oxygen and nutrients to the cells within the tissue construct, which can result in cell death and impaired tissue function. Developing methods to vascularize tissue constructs and integrate them with the host vascular system is crucial to the success of tissue engineering in wound reconstruction. Clinical success depends on offerings not being rejected by a patient’s immune system and being able to integrate with a complex network of cells in a precise and targeted manner, which can be difficult to achieve.
(iv) Regenerative medicine approaches
Regenerative medicine approaches such as platelet-rich plasma (PRP) and extracellular matrix (ECM) are being developed for their potential to promote wound healing. The former is an autologous biological product containing higher amounts of platelets [small cells that circulate within your blood and bind together when they recognize damaged blood vessels]. Compared to circulating blood, PRP contains an increased concentration of growth factors, which is a prerequisite for wound healing. The approach involves isolating platelets from a patient's blood, which, when introduced into a wound has the potential to stimulate and accelerate tissue healing. In recent years, PRP has attracted a lot of research attention.
ECM is an extensive three-dimensional scaffold made from natural or synthetic materials that provides structural integrity and can be used to promote tissue regeneration and accelerate wound healing. Because of the nature of chronic wounds, recovery is reduced by a lack of functional ECM in the dermal matrix, which is responsible for stimulating healing. The restoration of functional ECM in wounds contributes to their reconstruction and closure. Both PRP and ECM technologies show promise in promoting tissue regeneration.
MedTech leaders in this field include Osiris, Terumo, Stryker and Zimmer Biomet. Osiris Therapeutics specializes in regenerative medicine approaches for wound healing, including ECM products. Grafix, the company’s key offering, is a cryopreserved placental membrane product that is designed to promote tissue regeneration in chronic wounds. Terumo, a Japanese corporation founded in 1921, opened its first overseas office in the US in 1971 and subsequently became a global player. The company is now a leader in blood management technologies and offers a range of products specializing in wound healing, including PRP systems. Its main offering, the Terumo BCT COBE Spectra Apheresis System, is used to collect and process blood components, including platelets, for use in wound healing. Stryker’s flagship ECM product is the MatriStem UBM Wound Matrix, which is derived from porcine urinary bladder tissue and is designed to promote tissue regeneration in chronic wounds. Zimmer Biomet is a global leader in musculoskeletal healthcare and offers a range of products for wound healing, including PRP systems. Its principal product is the EBI Bone Healing System, which is used to promote healing in fractures and other musculoskeletal injuries.

Regenerative medicine approaches for wound healing require an in-depth understanding of the underlying mechanisms of tissue regeneration, which is complex. A precise understanding of multiple signaling pathways, cell types, and extracellular matrix components are crucial, and how these interact is fundamental to the development of effective therapies. For regenerative medicine treatments to be successful they need appropriate delivery of cells, growth factors, and other biological molecules to the site of injury. Achieving this requires a careful consideration of the biological and physical factors at play, which can be challenging.
(v) Three dimensional (3D) bioprinting
In recent years, three dimensional (3D) bioprinting has emerged as a rapid and high throughput automated technology that significantly reduces the limitations of other wound healing and regenerative medicine technologies that depend on manual processes and are hindered by the time it takes for them to reconstruct large chronic wounds. 3D bioprinting is an automated process that allows for the creation of three-dimensional structures using living cells and biomaterials. It involves the layer-by-layer deposition of bio-inks, which contain living cells and other biological components, using a specialized printer. The resulting structures can then be implanted into the body to promote tissue regeneration and wound healing. Advances in the technology have led to the development of more complex tissue constructs, such as skin, bone, and cartilage. In the near to medium term, 3D bioprinting has the potential to eclipse established and evolving wound healing technologies and disrupt the advanced wound care market.

Centres of excellence
There are several scientists, institutions, and start-ups, which have made significant contributions to the field of complex wound reconstruction using bioprinting. Here we mention a few. A pioneer in the area is Anthony Atala, founding Director of the Wake Forest Institute for Regenerative Medicine, which is part of the Wake Forest School of Medicine in North Carolina, USA. The Institute is a world-renowned centre of excellence for research in 3D bioprinting and wound healing. Professor Atala, a bioengineer, urologist, and pediatric surgeon, is recognized for his work in the area. One of Atala’s most notable contributions is the development of the first 3D bio printed human bladder, which he created using a combination of patient cells and biomaterials and then successfully implanted the constructs into several patients with bladder disease. Atala’s pioneering work in 3D bioprinting has paved the way for new treatments and therapies for patients suffering from complex wounds and tissue damage.
The Advanced Regenerative Manufacturing Institute (ARMI) located in Manchester, New Hampshire, USA, is a public-private partnership with a specific focus on 3D bioprinting research and has developed innovative techniques to create living tissues and organs. ARMI collaborates with academic institutions, government agencies, and industry partners to accelerate the translation of 3D bioprinting research into clinical applications. Another leading institution is the Tissue Engineering and Regenerative Medicine International Society (TERMIS), which is a global organisation that aims to promote research, education, and clinical translation in the field of tissue engineering and regenerative medicine. It has >50 chapters worldwide and organises annual conferences to bring together experts in the field. TERMIS plays a significant role in advancing 3D bioprinting research by providing a platform for collaboration and knowledge exchange.
One example of a start-up specializing in advanced wound care that is using 3D bioprinting is Pandorum Technologies, founded in 2011 and based in Bengaluru, India. Its flagship offering CorneaGen, is a 3D-bioprinted cornea that can be used to replace damaged or diseased corneas in patients. The cornea is made up of a bio ink composed of corneal cells and hydrogels that mimic the natural extracellular matrix of the cornea. The company has also developed a bio printed skin that can be used for wound healing research and drug development. It is composed of layers of living cells that mimic the structure and function of human skin. Pandorum has R&D initiatives in India and in the US located in the Medical University of South Carolina (MUSC) at Charleston and MBC BioLabs, in the San Francisco Bay Area, USA.

The success of 3D bioprinting depends on its ability to create structures that can support the growth and differentiation of cells into functional tissue. Identifying and developing biomaterials that can mimic the extracellular matrix of the target tissue, while providing the necessary mechanical and biological cues to support cell growth is technically demanding. The process of 3D bioprinting involves the deposition of multiple layers of cells and biomaterials to create a three-dimensional structure. Achieving the desired geometry and spatial organisation of these layers can be challenging and requires precise control over the printing process. A challenge for the technology regarding wound healing is the time it takes to obtain autologous cells to fabricate skin constructs for patients with extensive burn wounds, which require rapid treatment.
Can 3D bioprinting disrupt the advanced wound care market?

Although it is difficult to predict the future of any technology with certainty, it seems reasonable to suggest that 3D bioprinting could become the dominant technology in the field of advanced wound reconstruction in the next decade. Bioprinting has several advantages over other technologies, briefly described in this Commentary, and currently used in wound reconstruction. Traditional methods such as skin grafting and tissue engineering using scaffolds, have limitations in terms of their ability to produce complex tissue structures and patient-specific treatments. 3D bioprinting, on the other hand, allows for precise control over the placement of cells and biomaterials, and can produce highly complex and customized tissue constructs. The technology is rapidly advancing, and new developments are being made at an unprecedented rate. Researchers are continuously developing new biomaterials, improving the resolution and speed of bioprinters, and exploring new applications. 3D bioprinting appears to have the potential to meet the large and growing demand for advanced wound reconstruction by allowing for the creation of customized tissue constructs tailored to the specific needs of individual patients. Further, it can reduce the need for multiple surgeries and treatments, improve patient outcomes and reduce healthcare costs.
Over the next decade, advanced wound care markets are expected to grow and change due to the increasing influence of the purchasing power in emerging regions of the world and advances in technology.  While wealthy North America and Europe, with ~14% of the global population, will continue to be commercially significant for the medical device industry, the Asia-Pacific, MEA, and South America regions, where >80% of the world’s population live, are likely to become important wound care markets because of the growing incident rates of chronic conditions and related wounds requiring treatment, expanding middle classes demanding improved care and governments’ commitment to enhancing their healthcare systems.
While it is unlikely that non-bioprinting technologies will disappear from the field of complex wound reconstruction, there are several reasons, which we have briefly described, why they are likely to have a reduced influence on the market as it evolves over the next decade. By contrast, the advantages offered by 3D bioprinting, combined with the rapid pace of its R&D, the growing demand for personalized affordable treatments in emerging economies, and the universal need to reduce healthcare costs, suggest that the technology is well positioned to disrupt the advanced wound care market in the next decade.
Will traditional MedTechs with wound care franchises be agile enough to benefit from these new market and technology opportunities?
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  • MedTech growth strategies have taken advantage of low interest rates and cheap money to debt finance acquisitions of near adjacent companies with existing tried and tested products
  • This allowed companies to expand their product portfolios, geographic reach, and customer bases
  • Many MedTechs preferred such a growth strategy to investing in R&D to develop disruptive technologies that maybe outside their immediate field of interest
  • These technologies include 3D bioprinting, robotics, virtual reality, biometric devices and wearables, digital therapeutics, and telemedicine
  • All are patient-centric software driven technologies rather than hardware devices that serve the needs of hospitals
  • All are positioned to influence the shape of healthcare systems over the next decade
  • Many MedTech R&D investments are devoted to making small improvements to legacy products that prioritize the interests of large healthcare organizations over the needs of patients
  • Traditional MedTech M&A-driven growth strategies that have benefitted from an era of low interest rates and cheap money may now be challenged in the current period of higher interest rates, stagnate growth and rapidly evolving disruptive healthcare technologies.
Healthcare disrupters
On March 10, 2023, the Silicon Valley Bank (SVB) collapsed after a series of ill-fated investment decisions triggered a run on its assets. It was the largest bank failure since the 2008 financial crisis and the second largest in US history. The demise of SVB triggered a subsequent free fall in the shares of the Silvergate Bank, the Signature Bank, and the First Republic Bank. Then, on March 17, Credit Suisse shares crashed. Despite a US$54bn lifeline from theSwiss National Bankon  March 19, the bank collapsed and was ‘acquired’ by UBS for ~US$3bn. This banking crisis could create a weakness in corporate balance sheets more generally. Especially in MedTechs that have borrowed heavily in an era of low interest rates and cheap money, and now might be challenged by higher rates, economic stagnation, and rapidly advancing software driven healthcare technologies. These include, 3D bioprinting, robotics, virtual reality (VR), biometric devices and wearables, digital therapeutics, and telemedicine. All are positioned to influence the shape of healthcare over the next decade by: (i) changing the way healthcare is delivered, (ii) improving patient outcomes, (iii) lowering healthcare costs, (iv) increasing access to care, and (v) creating new business models as value shifts from hardware to software. Should the banking collapse be a warning to traditional MedTechs whose preferred growth strategies have been debt financed acquisitions of near adjacent companies with physical product offerings optimised for hospitals?
In this Commentary

This Commentary explores the potential vulnerability of some MedTechs that have taken advantage of the recent period of low interest rates and cheap money to pursue growth strategies dominated by the acquisition of near adjacent companies, and have not balanced this with investments in innovative technologies. These may not fit neatly into their existing product portfolios and business models but are positioned to have a significant influence on the medical technology industry and healthcare systems over the next decade. Such technologies include: 3D bioprinting, robotics, virtual reality (VR), biometric devices and wearables, digital therapeutics, and telemedicine. Before describing these, we briefly outline the causes of the recent banking crisis and suggest how it might signal a weakness in corporate balance sheets more generally.
The demise of SVB

Founded in 1983, headquartered in Santa Clara, California, USA, SVB was the preferred bank of the large and rapidly growing tech sector, and it quickly grew to become the 16th largest bank in America. Tech companies used SVB to hold their cash for payroll and other business expenses, which resulted in a significant inflow of deposits. Banks only keep a portion of such deposits as cash and invest the rest. Like many other banks, SVB invested billions in long-dated US government bonds. [Bonds are debt obligations, where an investor loans a sum of money (the principal) to a government or company for a set period, and in return receives a series of interest payments (the yield). When the bond reaches its maturity, the principal is returned to the investor]. Bonds have an inverse relationship with interest rates; when rates rise, bond yields and prices fall. During the past decade of historically low interest rates, bonds became a preferred investment vehicle. SVB’s problem arose when central banks throughout the world increased rates to curb inflation, partly caused by the hike in energy prices following the Ukraine war. For instance, in 2022, the American Federal Reserve raised interest rates seven times; from ~0 to 4.5%. As interest rates rose, SVB’s large bond portfolio lost money and the bank was forced to sell its bonds at a loss. On March 8, SVB announced a US$1.75bn capital raise to plug the gap caused by the sale of its loss-making bonds. This alerted customers to SVB’s financial challenges. They started withdrawing their deposits, which triggered a run on the bank.
MedTech growth strategies

Sudden hikes in interest rates may sound alarm bells for some traditional MedTechs that have pursued debt financing to acquire near adjacent companies rather than invest in R&D to develop disruptive technologies and innovative offerings. While R&D is a critical component of the industry, it is a complex and costly process, which often takes years to yield a product that can be marketed and generate revenue. By contrast, M&A activity allows companies to acquire existing products and technologies that have already been developed and tested, which reduces the risk and uncertainty of R&D. Further, with the industry becoming increasingly competitive, MedTechs need to achieve scale and market share to remain relevant. This can be achieved by the acquisition of near adjacencies, which allows acquirers to quickly expand their product portfolios, geographic reach, and customer base.

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The recent era of low interest rates and cheap money reinforced debt financed acquisitions as a growth strategy. Between 2011 and 2021, there were 2,365 M&A deals in the MedTech industry globally. However, to the extent that MedTechs focussed their acquisitions on near adjacencies, they may have missed out on acquiring innovative technologies positioned to reshape the industry over the next decade. This is because disruptive technologies often come from outside a company's core business and may not be immediately obvious to its leaders. Further, indebted companies facing high interest rates, might feel obliged to increase their revenues, which could result in them doubling down on cost cutting and optimizing their legacy products rather than investing in innovative R&D to drive revenue growth. Companies that adopt such business models could be at risk of having a dearth of technologies to drive future growth in a significantly more competitive healthcare ecosystem and challenging financial markets.
Disruptive technologies

The disruptive technologies we mention above shift the needle from hardware to software, from the needs of organizations to the needs of patients. While most of these are in their infancy, they all have the potential to transform healthcare in the next decade by providing new treatments for a variety of diseases and injuries, advancing drug development, enabling personalized medicine, reducing healthcare costs and improving medical training and surgical procedures. Let us explore these in a little more detail.

3D bioprinting

Three dimensional (3D) bioprinting is a relatively new technology, which involves the creation of 3D structures using living cells and holds promise for the future of regenerative medicine. The technology is an additive manufacturing process like 3D printing, which uses a digital file as a design to print an object layer by layer. However, 3D bioprinters print with cells and biomaterials, creating organ-like structures that let living cells multiply.

In 1999, a group of scientists at the Wake Forest Institute for Regenerative Medicine led by Anthony Atala, a bioengineer, urologist, and pediatric surgeon, created the first artificial organ with the use of bioprinting. Soon afterwards, bioprinting companies like Cellink (Sweden), Allevi (Italy), Regemat (Spain), and RegenHU (Switzerland) evolved. In 2010, Organovo, a biotech company founded in 2007 and based in San Diego, California, USA, introduced the first commercial bioprinter capable of producing functional human tissues that mimic key aspects of human biology and disease. In 2014, the company was the first to successfully engineer commercially available 3D-bioprinted human livers and kidneys. In 2019, researchers at Rensselaer Polytechnic Institute, New York, USA developed a way to 3D bioprint living skin, complete with blood vessels. Also in 2019, researchers at Tel Aviv University in Israel announced the creation of a 3D bioprinted heart using a patient's own cells. Today, 3D bioprinting is used to create a wide range of tissues and organs, including skin, bone, cartilage, liver, and heart tissue.
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One of the most promising applications of 3D bioprinting is the creation of replacement organs using a patient's own cells. This could potentially eliminate the need for organ donors and reduce the risk of rejection. The technology also can be used to create complex tissues and structures, such as blood vessels, skin, and bone, which could be useful for patients with severe burns or injuries, as well as those with degenerative diseases. Further, 3D bioprinting can be used to create realistic models of human tissues for drug development and testing, which could help to reduce the cost and time associated with drug development, as well as reduce the need for animal testing. 3D bioprinting could enable the creation of customized implants and prosthetics that are tailored to a patient's unique anatomy.

According to findings of a 2023 report by MarketsandMarkets, in 2022, the global 3D bioprinting market was ~US$1.3bn, and expected to grow at a compound annual growth rate (CAGR) of ~21% and reach >US$3bn by 2027.

Medical and surgical robotics have a relatively short history. The first robot-assisted surgical system, the PUMA 560, [Programmable Universal Machine for Assembly], was developed in 1985 by the engineering firm Unimation, and used to perform a neurosurgical biopsy. A decade later, in 1994, the FDA approved the first robotic system for laparoscopic surgery, the Automated Endoscopic System for Optimal Positioning (AESOP), which was superseded in 2001 by the ZEUS Robotic Surgical System. In the late 1990s and early 2000s, researchers began exploring miniature in vivo robots for minimally invasive procedures. In 2000, the first robotic system designed for spinal surgery, SpineAssist, was developed by Mazor Robotics, an Israeli company, which Medronic’s acquired in 2018. In the mid-2000s, researchers began developing robots for use in orthopaedic surgery. Perhaps the biggest influence on robotic surgery was made by  Intuitive Surgical, an American company founded in 1995. Intuitive developed the da Vinci Surgical System, which was approved by the FDA in 2000 and quickly became the most widely used surgical robot in the world. It has been used in millions of procedures across a wide range of specialities. Today, Intuitive Surgical is a Nasdaq traded company with a market cap of >US$84bn, annual revenues >US$6bn and >12,000 employees.
Medical and surgical robotics continue to evolve, with new technologies and applications being developed all the time. Such technologies offer the potential for more precise, efficient, and less invasive procedures, reduced operating times, improved accuracy, and fewer surgical complications. Demand for surgical robotics is increasing as are investments in robotic surgery companies and an increasing number of hospitals around the world are investing in robots. In the US, >250 hospitals use surgical robots for complex operations. Europe has also seen an increase in the number of hospitals that utilize robots for medical purposes. In 2016, there were over 7,000 medical robots in use globally, today there are >20,000.

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According to a Verified Market Research report, in 2021 the global market for medical robots was ~US$11bn and is expected to reach ~US$35bn by 2030. Scientists are developing the next generation of microbots, which are small enough to seamlessly travel through the human body performing repairs.
Virtual reality

The use of virtual reality (VR) in healthcare has been growing rapidly in recent years, but its history only dates from the early 1990s, when the first VR applications in healthcare focused on pain management and distraction therapy. In the late 1990s and early 2000s, researchers began exploring the use of VR for a wider range of medical applications, including surgical simulation, medical education, and mental health therapy. In recent years, the technology has been used in pain management, physical therapy, treatment of phobias and anxiety disorders, and to improve quality of life for hospice patients. During the Covid-19 pandemic, VR was used to help healthcare workers train for and cope with the challenges of the pandemic, as well as to provide virtual healthcare visits to patients who were unable to receive in-person care.

VR healthcare start-ups have attracted attention from major players. For example, in February 2020, Medtronic acquired UK start-up Digital Surgery for >US$300m. Founded in 2013 by two former surgeons, Digital Surgery first made waves with an app to help train surgeons using a database of common procedures. It also developed VR software to train doctors as well as AI tools for surgeons in the operating room. OxfordVR is also a British VR start-up. Founded in 2017 by Daniel Freeman, Professor of Clinical Psychology at Oxford University, the company is focused on mental health applications and has successfully automated psychological therapy. Users are guided by a virtual coach instead of a real-life therapist, which allows the treatment to reach significantly more patients. Another notable VR start-up is Firsthand Technology, founded in 2016 and headquartered in California, USA.  The company's flagship product is a VR distraction therapy (VRDT) that offers immersive experiences designed to distract patients from the discomfort and anxiety associated with medical procedures. The company's offerings demonstrate the importance of addressing the psychological and emotional factors that impact health and well-being. In January 2020, Pear Therapeutics, a leader in digital prescriptions acquired Firsthand.

Over the next decade, expect VR to improve medical/surgical training by providing immersive, realistic simulations for medical students and health professionals, allowing them to practice procedures and techniques in a safe and controlled environment. In addition to helping patients to reduce pain and anxiety during medical procedures, VR can help to overcome barriers to care, such as distance and mobility, by providing virtual healthcare visits and remote monitoring of patients. Also, the technology is positioned to improve surgical planning. By providing surgeons with 3D models of patients' anatomy, allowing for more precise surgical planning, and reducing the risk of complications. Further, it can be used in physical therapy to improve patient engagement and motivation, leading to faster recovery times.

According to a 2021 Verified Market Research report, the VR healthcare market was valued at ~US$3bn in 2019, and is projected to reach ~US$57bn by 2030.
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Biometric devices and wearables

Biometric devices and wearable technologies aim to empower people with granular data that leads to actionable healthcare insights. It gives people the ability to collect their own health data and report them in a digital format to physicians, thus eliminating the need for in-person appointments for simple check-ups. Insurers and providers have also bought into wearable devices, relying on data collected from them to inform personalized health plans. Corporations too have adopted them to encourage healthy habits among employees working from home.
The use of biometric devices and wearables in healthcare has a relatively short, but influential history. In the early 2000s, the first commercial monitors were introduced, which allowed athletes to track their heart rates during exercise. The technology can provide a wealth of data about a patient's health, allowing healthcare providers to tailor treatment plans to individual patients, monitor chronic disorders, detect changes in real-time and intervene expeditiously. Biometric devices and wearables can help to detect early signs of illness or disease and can help patients to take a more active role in their own health and wellness. The technology has the potential to reduce the cost of care by enabling remote monitoring, preventing hospital readmissions, and reducing the need for in-person visits. Further, it can provide researchers with large amounts of patient data to facilitate AI-driven research into disease prevention and treatment.
One successful biometric device company is Fitbit, which was founded in 2007 and is headquartered in San Francisco, California, USA. Fitbit offers a range of wearable devices that track physical activity, heart rate, sleep patterns, and other biometric data. The company’s products include smartwatches, activity trackers, and wireless headphones that integrate with its mobile app and web-based platform to provide users with personalized health and fitness insights. The company has developed partnerships with insurers and healthcare providers to use its products as part of employee wellness programmes. Since its founding, the company has sold >120m devices. In 2019, Fitbit was acquired by Google for US$2.1bn, which is a testament to the value of biometric data and the potential of wearables to transform healthcare.
The Apple Watch is the other market leader. Its first edition, launched in 2010, included features for tracking physical activity, heart rate, and other health metrics. An upgraded version, released in April 2015, helped to establish the health tracking market, which led to the mass adoption of wearable technologies. From the outset, the Apple Watch was conceptualized as a device that would help people stay connected in less invasive ways than with smartphones. Each iteration since its inception has increased the watch’s focus on improving health and wellbeing. In 2018, it was approved by the FDA as a medical device capable of alerting users to abnormal heart rhythms. Today there are ~150m Apple Watch users.
Another leader in the wearable sensor market is Abbott Laboratories, which provides a range of services for diabetes and cardiology. In November 2018, the company received FDA clearance for its FreeStyle Libre, a glucose reader smartphone app. Oura Health, a Finnish company founded in 2013, has launched a health wearable product in the form of a small ring that tracks activity, heart rate, body temperature, respiratory rate, and sleep data. As the technology continues to evolve, biometric devices and wearables are likely to play an increasing role in healthcare by helping people to participate in their own health and wellness, improving medical outcomes, and reducing healthcare costs.
According to findings from a 2019 ResearchandMarkets report, the wearable health technology industry is projected to see a CAGR >25% between 2020-2027, and annual sales are expected to reach ~US$60bn by 2027.
Digital Therapeutics
Digital therapeutics (DTx) are software-based interventions that aim to prevent, manage, or treat medical conditions by modifying patients’ behaviours. The therapeutics are delivered through mobile apps, virtual reality, or digital platforms. Their use in healthcare is growing, and the history of DTx can be traced back to the late 1990s when the first digital intervention for substance abuse was developed. In the early 2000s, a few digital interventions were introduced to manage chronic conditions such as diabetes and hypertension. However, it was not until the 2010s when the use of DTx started to gain momentum, driven by technological advances, the growing prevalence of chronic diseases, and the need for more cost-effective healthcare solutions.
In the November 2020 edition of Scientific America, DTx were ranked in the top-10 emerging technologies, which have demonstrated an ability to prevent and treat a variety of chronic conditions. In September 2017, Pear Therapeutics digital software programme, reSET, became the first FDA-approved DTx for substance use disorders (SUD) involving alcohol, cocaine, marijuana, and stimulants. According to the US Centers for Disease Control and Prevention (CDC) >40m Americans, ≥12 years presented with SUDs in 2022. In 2020, Pear received FDA clearance for Somryst, an insomnia therapy app. The company has a pipeline of DTx offerings for a wide range of conditions, including multiple sclerosis, epilepsy, post-traumatic stress disorder and traumatic brain injury. In 2020, the FDA approved EndeavorRx, which is produced by Boston based Akili Inc and is the first DTx delivered as a video game for children with attention deficit hyperactivity disorder (ADHD). Omada Health, is another digital therapeutics start-up, founded in 2011 and headquartered in California, USA, which provides personalized coaching and support to individuals with chronic health conditions.

Given that DTx are evidence-based and personalized, they can be tailored to meet the unique needs of each patient. This individualized approach can lead to enhanced patient outcomes and improved quality of life. DTx are often more cost-effective than traditional therapies, as they eliminate the need for in-person visits and reduce the need for expensive medications. This could help to lower healthcare costs. Digital therapeutics can be accessed from anywhere, any time and on any device, making them particularly useful for patients in remote or underserved regions. This could help to improve access to healthcare for millions of people. DTx can be integrated with other healthcare technologies, such as wearables, mobile health apps, and electronic health records, to provide a comprehensive approach to healthcare. This could lead to improved coordination of care and better health outcomes. Further, DTx could bring about a shift in treatment paradigms and change the way we approach chronic diseases: instead of relying solely on medications, patients could use digital therapeutics to manage their conditions and improve their overall health.

The FDA has created a new classification for digital therapeutics, which is likely to make it easier for more DTx solutions and services to obtain regulatory approval. In a 2020 survey of MedTech leaders by Deloitte, a consulting firm, 63% of respondents agreed that DTx will have a significant impact on the industry over the next 10 years. A report by Grand View Research, suggested that the global digital therapeutics market was valued at US$4.20bn in 2021, and is estimated to grow at a CAGR of ~26% from 2022 to 2030. 


The practice of using telecommunications and information technologies to provide remote medical services, has a history dating back to the early 20th century. In 1924, the first radiologic images were transmitted by telephone between two towns in West Virginia, USA. In the 1950s and 1960s, the technology began to advance, and the first video consultation between a patient and a physician was conducted. In the 1970s, NASA began using telemedicine to provide medical care to astronauts in space. In 2001, the Indian Space Research Organization successfully linked large city hospitals and healthcare centres in remote rural areas. With the development of the internet in 1990s, remote healthcare exchanges became more widespread, particularly in rural areas where access to medical services were limited. In 1993, the American Telemedicine Association (ATA) was founded to promote the use of the technology. Since then, telemedicine has continued to evolve and expand.
The Covid-19 pandemic led to a surge in telemedicine usage as healthcare providers looked for ways to provide care while minimizing in-person contact. Based on a survey by McKinsey, a consulting firm; before the pandemic in 2019, ~11% of US patients used telehealth services. After COVID, that number had grown to ~50%. Some estimates suggest that during the height of the pandemic, the number of telemedicine appointments increased by 5,000%. According to McKinsey’s, 76% of US consumers report that they are interested in using telehealth in the future as a way to complement in-person physician visits.In August 2020, digital health history was made with the merger of two of the largest publicly traded virtual care companies Teladoc and Livongo. The former, a multi-billion-dollar market leader in telemedicine founded in 2002, and the latter, a multi-billion-dollar market leader in remote patient monitoring. The deal created a US$38bn entity, which was the market’s first full-stack virtual health company. Today, virtual health is a rapidly growing field, and combines virtual physician visits, remote patient monitoring, chatbots, algorithms, and analytics.
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Over the next decade, AI-powered telemedicine tools are likely to become more prevalent, helping to streamline and automate many aspects of the care delivery process, such as triage, diagnosis, and treatment plans. Remote patient monitoring technologies are likely to become more advanced and widespread, allowing healthcare providers to monitor patients’ health and vital signs remotely, which can improve outcomes and reduce hospitalizations. Expect healthcare providers to increasingly work as part of virtual care teams, collaborating with other health professionals, including specialists, to deliver care to patients in real-time, regardless of location. Telemedicine will continue to improve access to care, particularly for underserved populations such as those in rural and remote areas, and those with limited mobility or poor transportation options. The technology will also facilitate more personalized and patient-centred care, as providers will be able to tailor care plans to the specific needs and preferences of individual patients.

According to a report by MarketResearchFuture, the current global telemedicine market size is valued at ~US$67bn and is expected to reach >US$405bn by 2030, exhibiting a compound annual growth rate of >22%.


We have described six evolving software driven technologies positioned to significantly influence healthcare systems in the next decade. Note that all are software driven and focused on patients to make care more personalized and sensitive to specific needs of individuals. Such technologies are in stark contrast to traditional medical devices, which overwhelmingly are physical devices designed to serve hospitals, rather than individual patients. Such a focus can lead to a lack of innovation, higher costs for patients, lower quality of care, and less personalized treatment options. A shift towards technology optimized to deliver patient-centered care is necessary to improve the quality of healthcare and ensure that patients receive the best possible outcomes. From our analysis it is not altogether clear whether traditional MedTechs are well positioned to achieve this.
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  • Recently, Peter Arduini, CEO of GE Healthcare, proclaimed that the software development business “is central to our growth strategy
  • Although AI is in its infancy, AI technology has become embedded in all aspects of care journeys: from diagnosis to recuperation at home; from prevention to improved lifestyles
  • Notwithstanding, many established MedTech leaders still advocate the production of physical devices for episodic surgical interventions marketed by B2B business models in wealthy regions of the world
  • Jenson Huang, a key opinion leader from the AI industry recently stressed how rapidly AI technologies have advanced over the past decade and predicts that AI “will revolutionize all industries” over the next decade
  • If Huang is right and more MedTech leaders bet their future growth on innovative AI driven strategies, healthcare systems will be soon re-imagined

Re-imagining healthcare
On 16 February 2023, a Wall Street Journal article announced, GE Healthcare Makes Push into Artificial Intelligence”. The company, spun-out of General Electric (GE) in January 2023, is now an independent enterprise traded on Nasdaq, and Peter Arduini, its Chief Executive, says that the software development business “is central to our growth strategy”. In the first instance, GE Healthcare is planning to apply artificial intelligence (AI) and machine learning (ML) techniques to masses of disparate data generated by hospitals during patients’ therapeutic journeys, to enhance hospital services, improve patient outcomes and reduce healthcare costs.
Arduini is right. However, to fully appreciate the future potential impact of AI technologies on the medical technology industry and healthcare systems, we need to engage with key opinion leaders (KOL) from the AI industry. One such leader is Jenson Huang, a Taiwanese-American electrical engineer, founder, president and CEO of Nvidia, a semiconductor company launched in 1993. Today, it is a world leading, Nasdaq traded AI technology enterprise with a market cap of ~US$509bn, annual revenues of ~US$27bn and >26,000 employees. To put this into a perspective: if AI was the mid-19th century gold rush in the US, then Nvidia would be the producer of pickaxes for the hundreds of thousands of prospectors drawn to Sutter's Mill in Coloma, California. But before engaging with Huang, let us get a better understanding of the state of healthcare systems, AI and ML.
In this Commentary

This Commentary discusses Arduini’s proposition that AI big-data driven software strategies, which aim to enhance patient outcomes and reduce healthcare costs, are key to the growth of medical technology companies. This raises a question whether traditional MedTechs, producing physical devices, and marketing them with B2B business models will create sufficient growth and value over the next decade to satisfy their investors. Although AI technologies are in their infancy, they have already entered many areas of healthcare and are well positioned to play a significant role in future, re-imagined healthcare systems. The Commentary describes AI and ML, provides a brief history of AI, outlines its recent uptake in healthcare and notes how AI technologies have been used by both agile start-ups and giant techs to develop ‘big ideas’ with the potential to disrupt the medical technology market. We briefly describe six start-ups that have leveraged AI to enter the MedTech market and by doing so, increased the competitive pressure on traditional enterprises. Although AI technologies have only recently been introduced to healthcare systems, they are embraced by the FDA and feature in many aspects of patients’ therapeutic journeys: from diagnosis and treatment to recovery and rehabilitation at home. The Commentary takeaways suggest that the actions of industry leaders like Peter Arduini will have a significant impact of the shape on healthcare systems over the next decade.
Healthcare in crisis

Healthcare systems throughout the world are in crisis and experiencing large and rapidly growing care gaps,which we have described in previous Commentaries. These are created by growing shortages of health professionals and a vast and rapidly growing demand for care from aging populations; a significant proportion of which present with chronic lifetime diseases, such as heart disorders, diabetes, and cancer, that require frequent physician visits and more resources to treat. Such care gaps result in millions of people having difficulties gaining prompt access to health services, which delay diagnosis, worsen patient outcomes, and increase treatment costs. 

Addressing such issues requires re-imagining healthcare systems. Commercial enterprises have a role to play. Like GE Healthcare, agile start-ups and giant techs have embraced new and evolving AI technologies to create innovative offerings that provide solutions to care gaps predicated upon patient-centric, AI big-data strategies. However, many traditional medical technology companies have not developed software offerings and continue to focus on the production of physical devices, and B2B business models to support episodic hospital-based surgical interventions.  

Brief history of AI

AI refers to the development of computer systems that can perform tasks, which typically require human intelligence, such as decision making and natural language processing. The technology is based on the premise that machines can learn from data, identify patterns, and make recommendations with minimal human intervention. ML algorithms [instructions carried out in a specific order to perform a particular task] build mathematical models based on sample data, referred to as "training data", to make predictions or decisions without being explicitly programmed to do so.
AI has been around since the 1950s. The term was coined by computer scientist John McCarthy in 1956 at the Dartmouth Workshop in Hanover, New Hampshire, USA. In the early days of AI, scientists focused on building computers that could think, reason, and solve problems like humans. In the 1960s and 1970s, AI research concentrated on developing more advanced algorithms and techniques for programming computers to solve tasks. This resulted in expert systems, which used knowledge-based decision making to solve complex problems. In the 1980s, AI shifted towards ML, which allowed computers to learn from experience by enabling them to recognize patterns and make decisions based on data. In the 1990s, AI developed methods for robots to interact with their environment and learn from experience. This led to autonomous robots that can navigate and perform tasks in the real world. Today, AI research is focused on creating more intelligent and autonomous systems and is used in a wide range of applications, and increasingly in healthcare.
AI and healthcare

AI’s use in healthcare can be traced back to the 1970s, when researchers developed expert systems that could diagnose and treat certain medical conditions. Early AI healthcare applications were limited by the availability of data and the dearth of computer power. In the 1990s, as computing power increased and the internet became more widely available, AI began to be used more extensively in healthcare. One of the early applications was in radiology, where it was used to interpret medical images. Other applications included decision support systems for medical diagnoses and treatments, and natural language processing systems for medical documentation. In the 2000s, the use of AI continued to expand, with the development of ML algorithms that could analyze large datasets to identify patterns and make predictions. These were used in a variety of healthcare applications, including personalized medicine, drug discovery and medical imaging.
Today, AI benefits a wide range of healthcare applications from faster diagnosis to the prediction of pandemics, from clinical decision support to digital therapeutics. The aspiration of AI driven solutions and services in healthcare is super-human performance, free from errors and inconsistencies, and scalable to provide expert-level care across entire health systems. AI technologies have the potential to provide services that improve the accuracy and speed of medical diagnoses and treatments, monitor conditions, assist with recovery, support medicine regimens, facilitate personalized healthcare and reduce costs for providers. These functions are relevant in the context of attempts to narrow care gaps, but they require vast amounts of computing power, which most companies do not have in-house.
This is where cloud computing, and Nvidia's new solution come in. Dubbed "DGX Cloud", Nvidia’s offering is an AI supercomputer accessible via a web browser. The company has partnered with various cloud providers, including Microsoft, Google, and Oracle to develop the service, which provides enterprises easy access to the world’s most advanced AI platform and allows them to run large, demanding ML and deep learning workloads on graphic processing units (GPUs) to generate and implement ‘big ideas’.
Big ideas

New entrants to the medical technology market - agile start-ups and giant techs - often have ‘big ideas’; innovations with the potential to inspire stakeholders and disrupt the industry. By contrast, traditional MedTechs who do not employ AI strategies tend to have a dearth of big ideas and mainly focus their R&D spend on incremental improvements to their legacy devices. By contrast, new entrants have accelerated the use of AI, ML, and data analytics to help diagnose diseases earlier and monitor patients remotely. Further, they have championed wearable devices like Fitbits and Apple Watches that help people track their health metrics and allows them to make smarter decisions about their wellbeing. This is helping to transform the modality of healthcare from ‘diagnosis and treatment’ to ‘prevention and lifestyle’
Start-ups with big ideas
There are hundreds of healthcare start-ups with big ideas predicated upon innovative AI technology. To provide a flavour of these we briefly describe six.
Boston based Biofourmis was founded in 2015. Its Biovitals™ Analytic Engine brings patient-specific data and ML together to provide the right care, to the right patients, at the right time. Advanced analytics process continuous and episodic data, notify clinicians of changes in patients’ conditions, and enable early intervention. With digital medicine, modular treatment algorithms (based on a patient’s disorder) enable the delivery of optimal medication.
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TytoCare is a New York-based medical technology start-up, founded in 2012, which aims to transform primary care by enabling people to have 24-7 medical examinations with a physician from the comfort of their home. The company has developed a suite of easy-to-use medical devices with built-in guidance technology and ML algorithms to ensure accuracy, which replicate face-to-face clinician visits. The devices include a hand-held modular tool for examining the lungs, throat, heart, skin, ears, and body temperature, and a health platform link to the cloud for storing, analysing, and sharing health data derived from the examinations.
Doctolib is a French digital health company founded in 2013. Its main product is a software-as-a-service platform for health professionals, which allows patients to book in-person and video consultations with healthcare providers. In January 2021, Doctolib acquired Tanker, a French start-up that developed the world’s first end-to-end encryption platform in the cloud, which Doctolib had been using since 2019. The Tanker platform is designed to be used by developers with no cryptographic skills and enables online businesses to easily encrypt their user’s sensitive data at the source: directly on end-users' devices. In October 2021, Doctolib acquired Dottori, an Italian online medical appointment scheduling service. The company is currently valued at >US$6bn, and  is used by ~300,000 healthcare professionals and ~70m patients in Europe.
CMR Surgical
CMR Surgical develops equipment and systems that aid in minimal access surgeries. During its establishment in 2014 in Cambridge, UK, the company’s founders asked, “why are so many people not receiving minimal access surgery and how can we change this?”. CMR’s main product is “Versius”, an EUMDR compliant device developed for high precision operations. During surgical procedures it can continuously collect data, which are stored and analysed to support surgeon training, and enhance the performance of future surgeries. is an Israeli start-up established in 2013. Its founders saw an opportunity to increase access to healthcare by leveraging the continuous improvement in smartphone cameras, which they transformed into at-home medical devices. As smartphone camera capabilities grew,’s range of clinical grade services expanded. With the company’s app and kits, users can undertake unitary tract infection (UTI) testing, prenatal monitoring, open wound assessments, and more, all in their homes. has partnered with healthcare systems throughout the world to provide clinical results at critical moments.
Proov, a US femtech start-up based in Boulder, Colorado, whose flagship offering is a rapid response progesterone test strip invented by Amy Beckley, a pharmacologist, with expertise in hormone signaling. It is the only FDA-cleared (March 2020) urine progesterone (PdG) test to confirm successful ovulation at home. Lack of, or insufficient ovulatory events, is the primary cause of infertility worldwide. In the US, ~12% of couples are diagnosed with infertility each year.  Thus, being able to confirm ovulation is an essential component of infertility evaluations in women.  Gold standards for confirming ovulation include transvaginal ultrasounds and serum progesterone blood draws. Both techniques are invasive, expensive, and/or inaccessible to most women. Proov’s offering is a non-invasive, inexpensive, home-based testing system.
A new era for AI in healthcare
Such start-ups with AI driven offerings suggest a new era for healthcare, which also is signalled in the introduction to a 2021, FDA action plan for AI/ML-based software medical devices. The plan describes how traditional B2B MedTech strategies are being complemented with B2C digital solutions and services that support entire patient journeys. According to the FDA’s action plan, “Artificial intelligence (AI) and machine learning (ML) technologies have the potential to transform healthcare by deriving new and important insights from the vast amount of data generated during the delivery of healthcare every day. Medical device manufacturers are using these technologies to innovate their products to better assist healthcare providers and improve patient care. One of the greatest benefits of AI/ML in software resides in its ability to learn from real-world use and experience, and its capability to improve its performance. FDA’s vision is that, with appropriately tailored total product lifecycle-based regulatory oversight, AI/ML-based Software as a Medical Device (SaMD) will deliver safe and effective software functionality that improves the quality of care that patients receive”. The agency currently has several ongoing projects designed to develop and update regulatory frameworks specific to AI. As of early 2023, there have been >500 FDA approved AI/ML-algorithms as medical devices.

Al and healthcare systems

Although AI is in its infancy and has only relatively recently begun to be used in healthcare systems, it has already taken root in many healthcare applications, including data analysis, diagnoses, monitoring, personalized apps, robotics, wearables, and virtual health assistance. This suggests a new era and the re-imagination of healthcare. Ambulances have become smart platforms, equipped with AI-based systems connected to hospitals, which can be used to diagnose medical conditions and provide real-time treatment recommendations. A&E departments use AI driven automated triage and diagnosis systems to assess incoming patients and prioritize those with the most serious conditions quickly and accurately. AI is also used to automate the dispensing of medications. Hospitals employ AI-based systems to analyze medical images such as X-rays and CT scans, which help medical personnel to quickly identify any abnormalities and make more accurate diagnoses. Surgery employs AI-enabled systems to assist with planning procedures, automating the delivery of anesthesia, and performing complex and delicate surgical interventions. Virtual recovery coaches use AI technology to create personalized plans for individuals recovering. Smart systems collect real time patient data and provide advice and support to help patients stay on track from their homes. AI-powered medication management systems help patients to track and manage their medications and send alerts to healthcare providers if there are any issues.
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Have diversified medical technology companies blown their competitive advantage?
The cusp of a new era

According to Huang, a new era of AI has been triggered by a technology most people have become familiar with over the past few months: ChatGPT. Developed by OpenAI and built on top of its family of generative, large language processing models, which have been fine-tuned using both supervised and reinforcement learning techniques.
Huang views ChatGPT, as one of the greatest things that have been done in computing”. Generative AI models [algorithms that generate new outputs based on the data they have been trained on] have >100bn parameters and are the most advanced neural networks in today's world.  In no computing era has one computing platform (ChatCPT) reached ~150m people in ~60 days. In commercial terms this means, “a torrent of new companies and new applications . . . Nvidia is working with ~10,000 AI start-ups throughout the world in almost every industry”, says Huang. In a February 2023 earnings call to analysts Huang said that ChatGPT has incentivized businesses of all sizes to purchase Nvidia’s chips to develop ML software. Following the call, Nvidia’s market cap rose by US$79bn.
The democratization of AI programming

Huang’s enthusiasm for ChatGPT is partly because he perceives it as “democratising programming” by making human language a perfectly good computer programming language. The platform has the capacity to understand human-explained requests, generate coherent answers, translate texts, write code, and more. It has excited enterprises throughout the world and can be used for copywriting, translation, search, customer support, and other applications. While ChatGPT has many advantages, PyTorch and TensorFlow, two free and open-source software libraries have arguably done more to democratise programming by making it relatively easy to develop sophisticated ML applications without extensive programming skills. Notwithstanding, Huang is right to stress the significant leaps forward made by AI in the recent past and right to suggest that “AI is at a watershed moment for the world”.
Edge computing

Over the next decade, Huang predicts there will be a proliferation of edge-computing made possible by the spread of the Internet of Things (IoT). Edge computing is a connectivity paradigm that focusses on placing processing near to the source of data. This suggests that fewer activities will be executed using cloud computing. Instead tasks will be relocated to a user’s PC, cell phone or IoT devices. Huang refers to these as ‘AI factories’, which are positioned to have a significant impact on healthcare. By 2025, the global market for Internet of Medical Things (IoMT) is estimated to reach >US$500bn. This signals a significant change because currently most healthcare computing takes place in on-premises networks or, in the cloud. However, processing healthcare data from afar can be limited by infrastructures that cannot manage them quickly, securely, or cost-effectively. To address these issues, healthcare companies are implementing edge computing, which facilitates data being analysed and acted upon at the site of collection. This reduces end-to-end congestion and the constraints of limited connectivity and data broadband connections across vast distances by lowering transmission time, while also reducing risks to privacy and data protection. 

According to Huang, “AI processing performance has been boosted by a factor of no less than one million in the last 10 years”. Over the course of the next decade Huang predicts there will be, “new chips, new interconnections, new systems, new operating systems, new distributed computing algorithms and new AI algorithms (which will) accelerate AI by another million times."

Our discussion suggests that Peter Arduini, CEO of GE Healthcare, is right: software development is central to the growth potential of medical technology companies. Over the past two decades AI, ML and big-data strategies have substantially extended the horizons of industry players by giving them the means to provide software solutions and services to support entire patient journeys. This has introduced B2C MedTech business models, which complement conventional B2B models, and have the potential to provide access to new revenue streams while improving patient outcomes and reducing healthcare costs. If software initiatives like Arduini’s and others spread, healthcare systems are likely to be re-imagined. The fundamental technology of MedTech leaders is intelligence. But as Huang suggests, “We’re in the process of automating intelligence”, which can only empower industry executives. “The thing that’s really cool”, says Huang, “is that AI is software that writes itself, and it writes software that no humans can. It’s incredibly complex. And we can automate intelligence to operate at the speed of light, and because of computers, we can automate intelligence and scale it out globally instantaneously”. If Huang is right, over the next decade, AI is well positioned to play a significant role in re-imagining healthcare.
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