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Signify Premium Insight: MRI and Meeting the Need for Better Imaging

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Research Manager
Bhvita Jani

As highlighted in the recent Premium Insights detailing Signify Research’s expectations for RSNA 2022, there is significant focus and expectation surrounding the advanced imaging modalities, and in particular MRI. Such a focus was borne out in Signify Research’s MRI Equipment – World – 2022 report, which highlighted the potential for MR imaging in the coming years.

There are several reasons for this potential, explains Research Manager for Medical Imaging Bhvita Jani, a turnaround, she explains, that is particularly remarkable given the market’s tribulations during the worst of the Covid-19 pandemic.

The Signify View

“As happened in several advanced imaging technology markets, the MRI market was very negatively impacted by Covid 19. After all, MRI wasn’t only irrelevant for Covid-19 detection, but systems also have a very high price point, a difficulty at a time when providers were stretched.

“As such, there were a lot of orders and sales that were delayed. The exact impact varied from region to region, but overall, we did see a significant drop from $4.7bn in 2019 to $4.4bn in 2020.”

This decline was most apparent in North America and Asia Pacific, where revenue fell  by 10.4% and 9.8% respectively as providers channelled resource to Covid diagnosis and care, delaying many of the elective procedures for which MRI is most commonly used.

This dip was short-lived, however. “In 2021 there was a strong rebound of MRI sales revenue as order backlogs were starting to be fulfilled again, while additional time-sensitive health funding allowed providers to invest resource in modernising imaging equipment. This was particularly true for MRI as providers began to deal with the backlog of elective procedures,” continues Jani.

“Starting with that performance in 2021, the market is continuing to grow in the range of four to seven percent on a year-by-year basis over the forecast period.”

Market Movement

There are several reasons for these strong growth prospects. In many emerging markets there is predominantly new demand for MRI systems as a greater number of providers look to expand access to MR imaging, leveraging additional COVID funding to support investment.

There are also some significant trends in more mature markets. Among them is the rapid pace of technological development. Over recent years there have been innovations such as portable weight-bearing MRI, helium-free MRI and ultra-high field MRI, supporting both entry into emerging markets but also new applications in mature markets.

“Even though some demand is stemming from expansion into new settings, workhorse 1.5 Tesla and particularly 3 Tesla systems are expected to also provide a significant growth driver. New image acquisition technology (exemplified in Siemens Healthineers’ latest 3T MRI launch ahead of RSNA) really showcases that attention on high-end MRI is not dwindling – if anything, as emerging markets get hit by global recessionary impacts the mid and high-end markets will be the main positive drivers of growth mid-term.”

Furthermore, the integration of MRI into clinical workflows as well as broader system efficiency are also a key focus.

“Faster scan times, utilising AI for image reconstruction and reducing the time spent on protocolling are also key for competitive differentiation. AI is one of the tools that vendors are turning to, enabling them to automate a greater portion of the operational workflow, including patient positioning, scheduling and scanner servicing, and fleet management and remote diagnostic tools.

“There has also been innovation with a more clinical focus. With some providers, for example, focusing on how MRI can be better used in certain applications such as neurology, cardiology, orthopaedics and general surgery.”

Such innovations, and such focus on how providers can get value from solutions will help vendors to continue to make sales, giving hospitals a reason to refresh or replace their product ranges, while also helping providers deal with some of the challenges that they are presently facing.

Size Matters

Along with the healthcare-specific challenges that providers and vendors have been forced to tackle in the wake of the coronavirus pandemic, vendors must also deal with growing economic uncertainty, and the change it presages. Amidst this change, some lesser-known vendors that serve specific niches or specific market segments may hope that they can benefit from changing conditions. This looks unlikely however, with around 95 percent of the global MRI market accounted for by just six vendors, and 85 percent of the market accounted for by just three vendors.

“Any change to this picture looks unlikely,” states Jani. “It’s the major players; Siemens Healthineers, GE HealthCare and Philips which are set to continue to do well in coming years thanks to their robust and broad product portfolio which caters for all ends of the MRI spectrum. It is not just factors around MRI modality portfolios that matter though – as providers look to de-risk future investments and better manage imaging assets, wrap around ‘solutions’ such as fleet management, services, analytics, and professional services, of MRI are all important factors in procurement for customers, for which the market leaders have a strong reputation.

“They also have strength globally, which sets them apart from the relatively smaller entrants, Canon Medical, Fujifilm and United Imaging, which are still very reliant on their domestic markets. Despite this, Canon Medical has strengthened its position and sales capacity in its overseas markets, including the United States.

“Furthermore, I expect that with the current economic pressures that are being faced by providers, there will be some opportunities for vendors such as United Imaging to expand beyond their domestic markets, and make some headway in more mature markets. This is especially likely in more price-sensitive markets, as market leaders ‘bake-in’ inflation-proof pricing schemes in the short and mid-term.”

“This opportunity is limited though,” continues Jani, “The established leaders have worked to establish longer-term contracts and managed service agreements, as well as brand loyalty. These make it harder for newer entrants to displace them. Additionally, there is also a lot of pent-up demand, notable in the market leaders’ reported record order books, which will continue to strengthen the market leaders’ market positions.”

Improving Imaging

Despite these competitive differences, there is no reason to think the complexion of the market is likely to change significantly over the forecast period. Instead, provided vendors have the portfolio to match providers’ requirements, sound growth can be expected. This fundamentally is a result of increased demand for better clinical precision and diagnostic outcomes.

The vendors that thrive over the coming years will be those that are best able to meet this  demand for advanced imaging capabilities across their ranges, while navigating inflationary pressures, supply chain disruptions and potentially capped R&D budgets. There will, no doubt, be some interest in niche products for very specific use cases, but broadly, it is the vendors that are already in the most dominant positions that are best placed to keep innovating. Demand, despite some of the economic headwinds facing global markets, looks very robust. Good news for major healthcare technology vendors that rely heavily on the MRI segments as a leading sector for growth and profit margin.”

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Strong Revenue Recovery of 15% for Fixed Digital Radiography in 2021, Whilst Fluoroscopy Grew by 18% Year-on-Year

Co-written by Graham Cooke

The fixed digital radiography (DR) rooms market experienced strong growth in 2021, with 15% growth in revenue reported, with revenues estimated at $1.2 billion. Likewise, the fluoroscopy X-ray market returned to growth after a year of retraction in demand in 2020, with 18% year-on-year growth in 2021, with an estimated market size of $509 million. These figures, taken from Signify Research’s General Radiography and Fluoroscopy – World 2022  report, show a strong recovery from the challenges experienced during the heights of the COVID-19 pandemic.

Demand returns to fixed room radiography in 2021.

Demand for fixed room digital radiography systems returned to growth in 2021, as procurement budgets were made available, having been temporarily diverted to fund mobile X-ray purchases in the early phases of the pandemic. This allowed previously planned projects to resume, and upgrades and replacements to be installed. For developed regions and countries, higher end features to help tackle the backlog are now increasingly sought after, including auto-positioning, cameras to ensure minimal patient movement before imaging and AI based image analysis. Such features improve workflow, increase the throughput of an imaging department, and should help healthcare providers gradually clear some of the backlog created from the pandemic.

Conversely, the digital mobile X-ray market retracted by 18% in revenue terms in 2021, closing at $684 million. However, this decline was not as severe as previously forecast, with some sustained demand remaining. During the pandemic, obvious benefits of mobile imaging were reinforced, including portability for bedside imaging. Growth is expected to return for mobile DR in 2024, as replacement of older mobile systems drives demand.

For mobile radiography, the importance of brand loyalty in purchasing decisions also returned, after temporary focus solely on inventory available during the pandemic. This allowed, smaller, local vendors to win significant share in new markets as they could service demand from local inventory more readily than global brands. Once global vendor inventory returned to a more normal level, purchasers often reverted to previous purchasing habits.

The general radiography market has experienced issues across the supply chain. Many components, including steel and semi-conductors, are in short supply. Coupled with rising costs of transportation and limited availability of shipping, average selling prices are expected to rise by approximately 8% in the short term for general radiography systems, before stabilising and declining again. This is also adding to lead times for projects, with systems taking a lot longer to reach customers.

Fluoroscopy also returned to growth, but demand is expected to become more specialised

Demand for fluoroscopy also returned to growth in 2021, with 18% year-on-year revenue growth to $509 million reported, up from $431 million in 2020.  However, fewer fluoroscopic procedures are now being performed, with other modalities like CT and MRI taking precedence for procedures traditionally conducted on fluoroscopy systems. Upper GI and barium swallow procedures remain the most procedures maintaining clinical demand for fluoroscopy and will remain essential for the long-term health of this modality.

With fewer fluoroscopic exams being performed and increased focus on return of investment in purchasing decisions, multi-purpose systems are now even more desirable, especially in North America and Western Europe.

Fluoroscopy revenues will surpass 2019 pre-COVID levels next year, but growth will be limited after this, as other imaging modalities continue to challenge fluoroscopy. The fluoroscopy market is set to reach $614 million by 2026.

Key trends by region

North America

  • The US continues to be one of the few countries still favouring classical fluoroscopy systems, due to historical training practices, concerns of patient movement threatening image quality and potential litigation. Demand is expected to gradually transition to remote systems, as new generations of radiographers are trained on remote systems; classical is however still expected to be dominant in the next five years.
  • In the general radiography market, demand for high end features is increasing, with tools to aid workflow becoming highly desirable for many imaging centres and hospitals.

Latin America

  • The Latin America market continues to be highly cost sensitive, with options like computed radiography, retrofit and analogue systems remaining popular. For many end users, there is a desire to digitalise, but currently, the price point remains prohibitive. For the digital solutions that are sold, low-end systems with a lower price point are by far the preferred option – over 50% of fixed and mobile solutions revenue came from the low-end in 2021.
  • Fluoroscopy remains a very small market in Latin America, with the high price point proving a significant barrier for entry to this market. Brazil is the largest adopter of fluoroscopy in the region, with most other Latin American countries seeing minimal sales.

Western Europe

  • High-end product continues to dominate the general radiography market in Western Europe, with 68% of revenue for fixed room product coming from High-end in 2021. Floor mounted systems sell more in unit terms in Western Europe, but with a lower ASP, revenue from ceiling mounted solutions accounts for a higher proportion of the market.
  • Most Western Europe markets have limited demand for fluoroscopy, with France being the key exception. Almost 30% of all revenue in Western Europe comes from this country. France is also unique in that many healthcare providers prefer to use dedicated fluoroscopy systems, rather than multi-purpose which is generally utilised in the rest of Western Europe.

Eastern Europe, Middle East and Africa (EEMEA)

  • Parts of EEMEA remain very cost sensitive, with Africa and less developed countries in the Middle East seeing high adoption rates of computed radiography, analogue and retrofit. For many, digital solutions are too costly, especially with the added infrastructure costs to enable PACS and other healthcare IT solutions on top of the imaging systems. Servicing imaging equipment can also be a barrier to adoption, with few engineers available locally to quickly fix broken systems.
  • Fluoroscopy remains very small for most of EEMEA. The areas that have stronger installed bases are in French-speaking north Africa, where demand follows France. In parts of the Middle East, such as in Saudi, some trends follow the US, as some radiographers were trained in the States, and therefore follow classical fluoroscopy installation practices.

Asia Pacific

  • Asia Pacific remains cost sensitive in many parts of the region, with 57% of fixed room revenue coming from the low-end segments. In countries like India, high levels of analogue and computed radiography remain significant. In China, CT imaging is increasingly preferred over high-end digital radiography.
  • Japan remains essential to the long-term growth of the fluoroscopy markets, with 45% of all unit sales in the region coming from this country alone. Elsewhere, demand is minimal with costs proving prohibitive to adoption.

Competitive landscape

A return to a more conventional vendor landscape was evident in 2021, with global brands such as Siemens Healthineers, GE HealthCare and Philips regaining market share temporarily lost during the pandemic when demand outstripped the available supply. With these vendors able to fulfil demand, smaller local vendors dropped share.

In the fixed DR market, Siemens Healthineers strengthened its position, with a gain of 2.5 percentage points.  For Mobile DR, GE reclaimed the top position, as Carestream experienced a difficult year after a very strong 2020.

For the fluoroscopy market, Siemens Healthineers led, with a very strong 2021, gaining further share. Shimadzu follows with strong sales in its domestic market.

Outlook

The Fixed DR market will continue to recover. Budgets will continue to return for fixed room, and projects previously postponed will be able to restart. Additionally, in some countries like the US, replacement cycles will stimulate further growth towards the end of the forecast. Globally, ceiling suspended fixed room product revenue will grow at a faster pace (5% CAGR 2021-26) than floor mounted (4% CAGR), especially in more developed markets, where the desire for high-end features often found in ceiling-mounted solutions, are increasingly required. Low-end system demand will continue to be driven by cost sensitive markets such as Latin America, Africa, the Middle East and parts of Asia. However, the price of digital solutions will need to significantly reduce to be an attainable option for these regions. Until the price falls sufficiently, analogue, CR and retrofit will continue to play an important role.

Fluoroscopy systems will also see limited growth but will also come under increasing pressure from other modalities like CT and endoscopy. At the end of the forecast, low single digit annual revenue growth is predicted.  In many countries and regions, the demand for fluoroscopy will come predominantly from multi-purpose systems; as fewer procedures are performed on the systems, budget holders will want to minimise downtime by enabling other general radiography imaging.

Signify Premium Insight: Strong Growth and Increased Competition – The Key Trends in the Interventional and Surgical X-ray Markets

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Research Manager Bhvita Jani

Signify Research has recently released its Interventional & Surgical X-ray – World Market Analysis which details the nuance of the market in the face of turbulence brought by the global Covid pandemic, and its subsequent recovery. The interventional and surgical markets were growing reasonably strongly in 2019 before the pandemic, consistently posting growth of mid-single digits. But, these were some of the markets most affected by the pandemic, with restrictions brought in to combat the virus leading to the cancellation of 30%-40% of elective procedures in some countries during the height of the pandemic.

Such a significant fall in procedures led to anticipation of a similar market decline, however, as the report’s author, Research Manager Bhvita Jani, points out, this wasn’t necessarily the case.

The Signify View

“On the Interventional side, the decline wasn’t as drastic as anticipated,” she explains. “There was softening but the drop, given the situation, was moderate with a high-single-digit to low-double-digit declines.

“On top of this we also saw the market bounce back quickly in 2021, so 2022 so far has been very much like a typical pre-covid year. The markets are stable and within the normal range.”

There have been several drivers of this return to normality. “It was in part a recovery after the pandemic, with a return to elective procedures and the fulfilling of pent-up demand, but, what is actually driving a lot of the growth is demographic factors.

“There is an ageing population, obesity is on the rise and the subsequent incidence of related diseases and conditions, such as cardiovascular disease and stroke among other things. All this means that procedures are becoming more complex and hospitals require more complex equipment to carry out these procedures.

“One of the biggest growth segments in interventional imaging is neurology, for example. Lots of developed countries are placing increased importance in dedicated stroke pathways and increasing the number of stroke centres accordingly.”

Perfecting Products

Such factors are not only driving the market forward, they are also shaping the product trends within the market. The increased demand for complex neurology procedures, oncology procedures and cardiovascular procedures means that hospitals are increasingly prioritising advanced multidisciplinary equipment. As such sophisticated biplane systems, for example, are proving increasingly popular in developed markets.

There are also other considerations for vendors looking to capitalise on the growth in the interventional radiology market. Increasingly providers are looking beyond simple transactions for a piece of hardware, and instead are looking to purchase complete patient care pathway solutions.

“So now, when stroke interventional neurology systems are sold, providers want the entire stroke treatment pathway, including the IT environment that can streamline the process,” Jani adds. “So, we expect more of those type of solutions to become available.”

Another factor contributing to market growth is the changes in settings in which interventional systems are used.

“In certain developed markets, one of the biggest growth factors is office-based labs. This growth stems from such labs being more profitable to the interventional radiologist or cardiologist, as it is a lower cost setting, which results in higher reimbursement.

“So, from a business perspective, these settings represent a higher return on investment. These settings are driving new demand, which is growing the market, compared to inpatient settings, where demand for equipment is almost entirely on a replacement basis.”

Global Changes

As well as meeting the distinct requirements of different customer groups, vendors are also having to react to the changing needs of different geographic markets.

“Vendors in India and China are among those disrupting the market, as they are driving down prices and continuing to increase the affordability and access to interventional technology,” Jani notes.

“In some markets, including China and India, governments are actively pushing more local vendors. This prioritisation of local companies and the incentives that are in place, could begin to threaten some of the international players’ share in those markets.”

For these international vendors, this challenge from lower-priced competitors could also exacerbate pressures closer to home stemming from changing purchasing practices.

“Hospitals are increasingly becoming part of bigger hospital chains. This means that the buying power now sits with group purchasing organisations, and that means there is more competition for these deals and more consolidation. Another more direct impact of this is that, with these bulk deals, the average selling price of systems is going down.”

Carry on Regardless

While such trends will have an impact, and there may be some pricing pressures in the market, according to Jani it remains an attractive area for vendors to serve.

“Despite these changes, providers are still keen to invest in very high-end equipment,” she explains.

“I’d say that compared to other areas of X-ray, decisions about interventional equipment are less driven by price. There is still a significant focus given to a system’s specifications, how the equipment can directly impact clinical outcomes, and the preference of the end user.

“This means, that in developed markets, it is a very hard market to disrupt, with hospitals and clinicians unlikely to want to go through the hassle of shifting from one brand’s equipment to another. Providers tend to replace the equipment from one vendor with equipment from the same brand, so it is very difficult for one brand to steal share from another.”

New technologies could, however, make such shifts more likely, with innovations within AI, for example, which focus on features such as radiation dose management or treatment planning potentially giving providers more of a reason to switch to another vendor’s products.

Future Preparation

As well as focusing on these new technologies, there are also other priorities that vendors in the interventional and surgical X-ray markets should concentrate on to best capitalise on market trends.

“While the high end is very important, if vendors want to maintain a market presence in some of the highest growth markets like China and India, they need to have a performance offering as well. This will allow them to continue to compete against the lower-cost system offerings from those countries.

“Another opportunity for vendors is to focus on more sustainable solutions,” Jani continues. “So, for example vendors offering providers software updates when they are launched by the vendor instead of providers being stuck with the software that was current when they purchased the system.

“This goes hand in hand with the increase in smart subscriptions that we are also seeing in the market, which makes the solutions more stable and improves their longevity, giving the vendors that offer these subscriptions an advantage.”

Strength in Surgical

Many of these trends seen in the interventional imaging market are mirrored in the surgical market, although there are some differences. For instance, one of the major trends in that market is the shift from image intensifier-based systems to systems that use flat panel detectors (FPD). There is also an increasing shift to 3D imaging, a transition that began gathering pace after 3D mobile C-arms were released by the likes of Ziehm Imaging, Siemens Healthineers and GE Healthcare. This has changed the complexion of the market somewhat. Before these releases most growth was expected in Europe, in countries like Germany, for example, but with the release of 3D systems, China is increasingly looking like a big driver of growth. This is particularly important given the levels of competition in the 2D C-arm market.

“Competition is much higher in the 2D mobile C-arm market,” Jani explains. “We are seeing a lot more domestic manufacturers in China and India which are offering systems at a lower price and making it more difficult for multinational companies to grow in those markets. However, there are some opportunities in developing markets, with 2D C-arms providing access to basic imaging in rural areas.

“In developed markets, mobile C-arms are also being used for overspill procedures and as backup to the fixed C-arm, although typically the purchase of an interventional system is prioritised over a mobile system.”

Possibilities and Market Potential

Despite these nuances the interventional and surgical X-ray markets both represent strong growth markets, with a great deal of potential in both developed and developing markets.

“There are going to be disruptive new entrants to the market,” Jani continues, “that is really going to cause a shake up.”

“The affordability of systems is going to increase, which means there is going to a much faster roll out with domestic vendors in India and China particularly accelerating growth in the market.

“Growth will also come from hybrid operating rooms, which are a fast-growing segment. That growth is set to continue in the coming years in both developed and emerging markets, just because of the multi-disciplinary clinical usage and the return on investment.”

“However, the US and China will remain the key growth drivers,” Jani concludes. “There is simply more demand for interventional and surgical X-ray systems due to the increased numbers of procedures that are being carried out, and an increased focus on interventions.

“This, ultimately, is the key driver of growth going forward.”

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Signify Premium Insight: AI Making the Move to Maturity

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify Research. To view other recent Premium Insights that are part of the service please click here.

Dr Sanjay Parekh, Senior Analyst

The medical imaging AI market is among the most dynamic of all the sectors in medical imaging. Its nascency, its rate of technical development and the application of the technology are combining to create a market that is changing incredibly quickly.

Despite the volatility of the market, senior analyst and author of Signify Research’s AI in Medical Imaging report, Dr Sanjay Parekh, has been able to discern several key trends in the market.

Great Growth

“The market for AI-based image analysis tools for medical imaging is set to reach $1.36bn by 2026,” Parekh states, “up from $402m in 2021.” Much of this revenue is for stand-alone AI tools, but AI-based advanced visualisation (AV) bundled AI tools are also included (accounting for 27% of the total market in 2021).

This represents a CAGR of 27% between 2020 and 2026, highlighting that the AI market is gaining momentum, many of the reasons for which are clear.

“There was for instance a large flurry of regulatory approvals in 2020 and 2021. In the US in 2020 for example, there were more approvals than in 2018 and 2019 combined. There was also the first wave of NMPA Class III approvals in China. With these regulatory approvals vendors can commercialise their tools.

“As well as having more products on the market, there has been continued progress with regards to reimbursement. There is the continued reimbursement for HeartFlow’s FFR-CT solution in the US, the UK and Japan, as well as parts of Europe. Additionally, pockets of China are already reimbursing the use of FFR-CT tools, but national reimbursement is still pending. There has also been a flurry of Category III CPT codes [for which there is no compulsory reimbursement] provisioned for quantitative image analysis tools for ultrasound, MRI and CT, which as well as encouraging the uptake of AI, could lead to reimbursement. While NTAP payments have also been renewed and expanded, such as the recent Optellum clearance, which has defied the norm and will now receive reimbursement for its Virtual Nodule Clinic solution for lung cancer despite the CPT code remaining as Category III.

“All of these factors combined will help the markets continue to grow.”

Areas of Interest

Growth will not be equal across all clinical segments, however, with four areas, which currently represent around 87% of the market, set to continue to stand out. These are cardiology, neurology, pulmonology, and breast imaging, with each having facets that mean they are likely to continue powering growth for AI vendors.

Use of AI is the most mature in the breast imaging market; however, opportunities for growth are more limited than elsewhere. “Because of the relatively limited number of use cases; namely breast nodule detections and breast density analysis, the breast imaging market will not to be as large as the other three,” continues Parekh.

“Cardiology is likely to account for the largest proportion. This will be driven by two factors. The first is increasing uptake and continued reimbursement for FFR-CT tools. Even accounting for its failed SPAC merger, HeartFlow, one of the success stories for the medical imaging AI market, has a relatively large install base and strong commercial traction as well as still offering an appealing value proposition. There are also opportunities for FFR-CT, especially in China, as vendors like Keya Medical, Shukun Technologies, and Raysight receiving regulatory approval for their FFR-CT tools.

“In addition, clinical guidelines recommending CT imaging as a first line diagnostic procedure will drive the adoption of AI.”

Stroke care is also set to rally.

Neurology will be a growth area mainly because of stroke imaging AI solutions. The NTAP code for stroke LVO, which was first issued in 2020 to Viz.ai and then renewed in 2021, was renewed again in 2022 and it looks set to be made permanent soon, thanks to the uptake of stroke imaging AI tools and the increased use of the code in such instances.

“Not only has the payment been created, but providers are using it and its use shows that providers value the end-to-end stroke solutions which benefit the entire care pathway as well as the radiologist.”

There are also other opportunities within neurology, with brain quantification tools, for example achieving moderate success. Some vendors offering such tools are generating revenue, but, while these will continue to be valued, other drivers such as the commercialisation of drugs for neurodegenerative disease are needed before they become a major driver of growth.

“Finally, in pulmonology, the relative value of using AI market is smaller compared to FFR-CT or head CT for example. Although there are vendors working on comprehensive solutions for both chest X-ray and chest CT that do restore that value, the most successful among them are setting a benchmark for other tools looking to gain traction. Further, the continued roll-out of screening programmes for lung cancer and TB, for example, will drive further traction in this market.”

Relinquishing a Point

There are commonalities across these clinical areas, however. It is becoming clear that the utility of point solutions across modalities and clinical areas is in general, very limited. Developers who can only offer single point solutions are looking increasingly unlikely to be selected by providers.

Instead, tools that offer the most value to providers will gain success. This value, however, can manifest in various ways. Many solutions focus on efficiency, but there are also solutions that could actually slow diagnoses, but still enhance the quality of a diagnosis by offering additional metrics, for example. This value is, in some cases, also no longer derived from incremental improvements in specificity or sensitivity that new tools might offer.

“If you offer 93% accuracy compared to 92%, is that going to make a difference,” Parekh asks. “Are you going to get a better diagnosis or is the patient going to be on a completely different treatment pathway? No. Instead value is extended beyond the analysis of the pixels in an image, to patient care and improvements to the clinical care pathway. The vendors that have started doing that are the ones that are going to succeed.

“Breast imaging tools, for example, that combine detection, quantification and classification of nodules, which are far more valuable than those which only offer nodule detection. Moreover, adding in breast density analysis will enhance the value proposition of such a solution even further. More significantly, however, are the tools that are looking at radiology more broadly and seen to offer value across the clinical care pathway (beyond the radiologist). These solutions can come from vendors which solely offer AI, or those which also offer capability to deploy and integrate AI.

“These vendors can bring in advanced visualisation capabilities, workflow capabilities and even structured reporting capabilities to address a given use case, while also offering their own native or third-party AI image analysis capabilities to create entire workflow packages. That is AI demonstrating value.”

Money to Money

Value is also forthcoming in a broader sense. Despite the turbulence in some tech markets and in some corners of the medical imaging market, investment for medical imaging AI vendors is still available, although it is becoming more discerning.

“Investors seem to be more than willing to continue to back vendors that have already shown progress,” opines Parekh, “but we are not seeing many Angel or Series A rounds.”

“Where we are seeing a lot of action is for the later-stage funding rounds, which are increasing in both size and number. This indicates that a set of market leaders are being established, such as the $100m funding club [a term coined by Signify Research including vendors that have received more than $100 million in total in venture capital funding]. Even with this greater investment in established companies we are starting to see evidence of a market shakeout.

“Last year we saw Nanox acquire Zebra Medical Vision, at the start of 2022 we have seen MaxQ-AI closing its radiology business, and Sirona acquiring Nines. RadNet, a large outpatient imaging group in the US also acquired two Dutch-based AI start-ups Aidence and Quantib to add to its portfolio after previously acquiring DeepHealth, and expand its push to deploy AI across screening for some of the most prevalent cancers. There is also some speculation about some other vendors also making pivots after not receiving funding that was expected. We have seen consolidation coming for a long time, but between the investment being focused on the largest vendors, and the difficulties for the smaller vendors, we are starting to see the shakeout take place.”

The impact of this market shakeout will be different in different regions. One area that is more difficult to make predictions for is Europe. Presently, the Western European market is starting to catch up with the US, but this growth is expected to stagnate in May 2024 when the new European Union Medical Device Regulation (EU MDR) is coming into force. There is currently a backlog of 12 to 18 months for vendors to upgrade their CE Mark to the incoming regulation, not to mention the more stringent requirements for this regulation. This raises the possibility of many vendors missing the deadline and therefore being unable to offer their products commercially in the EU.

Approval Ratings

This could have significant impacts, say Parekh.

“It is more likely that the larger vendors, the ones with the funds to pursue the MDR, will be the first to receive it. If you are a smaller vendor, then you may not want to, or be able to go for MDR approval. Ultimately, that will leave those that have MDR certification by May 2024 with an ‘early-to-market’ advantage over those that don’t. It could effectively level the playing field, and serve as a reset button, with only those that have been able to secure the new certification, regardless of past CE Mark approvals. This regulatory backlog is also therefore likely to hold back the market as a whole.

“It could also lead a lack of innovation, with smaller start-ups and research groups shifting their focus from radiology, keen to avoid the additional barriers they must pass, so there could also be a short-term innovation gap. This is another reason we could see more consolidation in the market.”

Despite these challenges the future is still bright for medical imaging AI vendors. The market increased by more than $60 million between 2020 and 2021, and growth is only set to continue. This shows a young market taking the first steps to maturity and a nascent technology making the first moves toward more mainstream adoption.

“Overall,” Parekh concludes, “it is growing, at a steady pace for now but with a big ramp up in the medium term, from 2024 onwards.”

“All signs are positive.”

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The Medical Flat Panel Detector (FPD) Market Experienced a 4% Increase in Unit Sales in 2020

Cranfield, UK, February 23rd 2022; Written by Bhvita Jani and Graham Cooke: The medical flat panel detector (FPD) market experienced a 4% increase in unit sales in 2020 reaching a market size of just under 70,000 units. However, the market revenues declined by almost 10%, equating to a market size of $2.1 billion USD. Market fluctuations echoed those seen in the X-ray modality markets, with static FPDs used primarily in fixed digital radiography (DR) rooms and mobile DR experiencing  10% year-on-year growth. Growth was driven by healthcare providers globally buying mobile X-ray systems for diagnosis of pneumonia as an indicator of COVID-19. Conversely, the market for dynamic panels, often used for fluoroscopy, surgical and interventional procedures, saw a sharp decline with units falling by 18% from 2019 to 2020 as elective surgeries were postponed or cancelled.

Signify Research predicts the medical FPD market to reach 85,000 units by 2025.  However, as average selling prices are expected to continue to fall, market revenues are predicted to decline.

In 2021, market dynamics shifted with demand for static panels used in mobile radiography declining, as the surplus demand in 2020 had been met during the initial waves of the pandemic. However, as elective procedures returned in 2021, demand for dynamic panels for mobile C-arm and interventional applications subsequently increased. In 2021, unit sales of dynamic panel increased by just under 15%, almost returning to pre-pandemic levels.

Wireless flat panel technology is increasingly adopted globally

Demand for wireless technology is continuing to increase in applications such as fixed and mobile radiography, especially in developed markets where benefits such as increased workflow capabilities are widely recognised. In 2020, wireless detectors accounted for 53% of all FPD unit sales. By 2025, this is forecast to grow to 61%. Physical parameters such as detector weight, extended battery life, and liquid damage protection also play a role in the purchasing process, although these factors are typically a lower priority than image quality and dose reduction. Purchasers are also paying attention to the pixel resolution and detective quantum efficiency (DQE). Manufacturers of FPDs are developing thicker scintillator layers and increasing the DQE level possible with their detectors.

Suppliers of FPDs are developing new products that have reduced scatter, lower noise, higher resolution and require lower dose exposure, a key consideration for healthcare providers and increasingly for patients as well. A combination of these features can reduce the need for retakes and increases clinical precision, enabling imaging departments to perform more efficiently.

Another key consideration when purchasing FPDs is the reliability and durability of the panel. Providers are demanding more robust, reliable panels, with a greater return on investment before replacement is required. As a result of this, providers are requesting service contracts or extended warranties to support increasing the lifespan of the detectors.

Demand for Gadox continues to decrease

Cesium iodide is the gold standard for medical imaging FPDs, but limited demand for gadolinium oxysulfide (Gadox) panels remains. Cesium iodide panels are more sensitive and produce higher quality images than Gadox equivalents, but come with a higher associated cost. The focus on reducing radiation dose in Western Europe and North America is limiting demand for Gadox panels. However, they continue to be sold in some price sensitive markets across Latin America,  . Demand for Gadox detectors is forecast to decrease throughout the forecast to 2025. As the prices of cesium iodide panels become more affordable, these panels are becoming more accessible to a wider range of customers. In addition, as the dose optimisation benefits of cesium iodide FPDs are further acknowleded in emerging countries, this will drive adoption of this panel type. Demand for Gadox panels will be maintained beyond the forecast period by smaller clinics and independent medical imaging facilities where cost is the primary consideration,

Competitive Analysis

The medical flat panel detector market remains a highly fragmented and competitive sector, with 15 vendors having at least a 2% market share each.  Varex leads with 18%, followed by Trixell Thales in second position and iRay in third position completing the top three.

Chinese FPD vendors gained market share in 2020, due to increased production and surplus inventory to supply to mobile X-ray system manufacturers. As a result, companies such as iRay, Careray and PZ Technology increased their market share in 2020.

Chinese FPD companies continue to drive an aggressive price war, forcing international FPD vendors to re-evaluate supply chains and open production facilities in lower cost countries such as China.

In the coming years, a key opportunity for vendors with cost-efficient FPDs is expected to be developing markets, such as Latin America, Africa and parts of Asia. With many of the countries in these regions having large installed bases of analogue or computed radiography systems, there will be ongoing digitalisation as the affordability of digital X-ray systems continues to increase.

Future outlook  

As the low-end FPD market continues to become saturated and the price ware continues, with newer Asian FPD vendors increasing market presence globally, margins for FPD vendors are increasingly at stake. After years of double-digit price erosion, medical FPD prices are forecast to stabalise with only single-digit price annual declines forecast through to 2025. As a result, FPD vendors are progressively investing in research and development to upgrade their product lines to showcase latest hardware innovation and establish a niche. Such developments include IGZO, flexible detectors, photon counting and addition of AEC chambers on the detectors themselves. Target markets for these higher-end FPD products include developed countries and high-end hospitals where clinical precision is still paramount.