[Anchor] From global big tech—such as Alphabet, the parent company of Apple and Google—to domestic venture startups, there is fierce competition over the AI healthcare market.
Let’s hear more from Reporter Yang Jae-jun.
It seems Korean AI healthcare companies are becoming more active in entering the U.S. market as well—what’s the situation?
[Reporter] Among the global AI healthcare market, expansion by Korean venture companies into the U.S. market, which is the largest, is increasing.
Among Korean AI healthcare companies, those that have received product authorization from the U.S. Food and Drug Administration (FDA) include Lunit (breast cancer, lung cancer), Huron (Parkinson’s disease), Coreline Soft (contouring), ClariPiA (CT noise reduction), i-Medicine, and AIDOT (cervical cancer), among others.
According to materials disclosed by the U.S. FDA, the number of medical devices related to AI and machine learning (ML) healthcare solutions that were authorized from January to October of last year reached 91.
The U.S. FDA’s medical device authorization is referred to as “510(k)”, a premarket submission system in which a product is deemed safe to market because it is substantially equivalent to an existing device in terms of intended use, technological characteristics, and performance testing items.
Products registered under FDA 510(k) include Apple’s smartwatch with an atrial fibrillation history function, Israel’s Nanox and Aidoc Medical, and products from Verily, a subsidiary of Alphabet.
Global big tech companies are competing to secure leadership, while Korean ventures are competing to target the global market, all in an AI healthcare market that has grown to around KRW 20 trillion annually.
[Anchor] Not only Alphabet, but global big tech companies such as Amazon and Apple also seem to be actively entering and investing in the AI healthcare market. What are the market outlooks related to this?
[Reporter] In 2020, the global AI healthcare market was USD 4.5 billion (about KRW 5.8 trillion), and this year it has grown dramatically to USD 15.6 billion (about KRW 20.3 trillion).
According to a market research firm, the AI healthcare market is expected to grow to USD 36.2 billion (about KRW 47 trillion) by 2025.
Among this, the U.S. market accounts for about 47%.
The medical device industry analyzes that, because the AI healthcare market is expanding and is still at an early stage of market entry, Korean venture companies with technological competitiveness could have another opportunity to enter the global market.
In the United States, even if overseas manufacturers obtain device authorization, regulations require them to have a local representative (US Agent) based in the U.S.
As a result, even if a local corporation or branch is established, partnerships with large distribution and sales networks are effectively unavoidable.
Recently, AI healthcare company AIDOT completed U.S. FDA listing for its AI medical device for cervical cancer diagnosis. Let’s listen to CEO Jeong Jae-hoon.
[Interview: Jeong Jae-hoon / CEO, AIDOT] “This time, our Cerviray received FDA approval through 510(k) Class II substantial equivalence.
Distribution is being handled across six states, including New York.
And we’re pushing hard to register a CPT code—which, in Korea, is similar to the meaning of an insurance reimbursement fee schedule—for insurance reimbursement.”
[Anchor] You said this could be another opportunity for Korean AI healthcare ventures to expand globally. If a product is listed with the U.S. FDA, what effects does that have in the global market?
[Reporter] If a product receives authorization from, or is listed with, the U.S. FDA, entering markets such as Brazil and Argentina in Latin America can also become relatively easier.
The medical device industry explains that in some Latin American countries that do not have their own medical device certification systems—unlike the EU, Brazil, Japan, and Korea—FDA authorization can be used in place of import certification reference documents.
If there is no advanced-country standard certification, additional proof such as official test reports for the product may be required separately, so FDA certification is considered a way to obtain approvals more quickly in those countries.
In particular, in some countries where medical services or screening programs are underdeveloped, entry may also be possible through cooperation with local health authorities via support from the Korea International Cooperation Agency (KOICA).
Let’s hear from CEO Jeong Jae-hoon of AIDOT.
[Interview: Jeong Jae-hoon / CEO, AIDOT] “Through the KOICA program, the Bolivian Ministry of Health is in strong agreement with—and welcoming—our efforts to help prevent women’s cancers through cervical cancer screening and early pre-screening, so I think we may achieve meaningful results within the first half of this year.
We’ve signed NDAs with two major companies on the healthcare side in Bolivia.
And through the Bolivian market, we’ve already completed agreements with preliminary partners for regulatory registration preparations in surrounding countries—including Argentina.”
Published: February 24, 2023 / Korea Economic TV / Reporter Yang Jae-jun
