Computer-Aided Detection: Bad Year, Bright Future

Full article reprinted from Start Up - December/January 2010

Start-Up -- For the manufacturers of computer-aided detection products, 2009 was not a good year. For the industry as a whole, revenues dropped 10%, according to "US Markets for Computer-Aided Diagnostic Imaging Products," a report recently issued by the Medtech Insight division of Elsevier Business Intelligence. This was largely due to the economic recession, cost pressures faced by hospitals, and a subsequent squeeze on capital equipment-related products. But for the foreseeable future, the industry is expected to grow at a compound annual rate of 11.1% to reach an estimated $185.3 million by the years 2013. Read more...

Computer-Aided Detection: Bad Year, Bright Future

Full article reprinted from Start Up - December/January 2010

For the manufacturers of computer-aided detection products, 2009 was not a good year. For the industry as a whole, revenues dropped 10%, according to "US Markets for Computer-Aided Diagnostic Imaging Products," a report recently issued by the Medtech Insight division of Elsevier Business Intelligence. This was largely due to the economic recession, cost pressures faced by hospitals, and a subsequent squeeze on capital equipment-related products. But for the foreseeable future, the industry is expected to grow at a compound annual rate of 11.1% to reach an estimated $185.3 million by the years 2013.

According to the report, several factors will drive growth in computer-aided detection (CAD), including the growing prevalence of cancer, which is driving the need for earlier, faster, and more reliable detection. Other drivers include the market release of CAD products for new applications, for example, bone, brain, kidney and hepatic malignancies as well as for the detection of pulmonary embolism, and finally, technological advances--in digital imaging techniques and in CAD system efficiencies such as easier integration with existing clinical systems, improvements in the display and manipulability of images, and the speed at which large datasets can be viewed and managed.

One hurdle to adoption, however, remains the expense of CAD systems. Stand-alone systems cost $50,000 to $175,000, although they are increasingly being sold as a component of imaging systems offered by the large manufacturers. This category has been hit hard by the Deficit Reduction Act of 2005, which led the Centers for Medicare & Medicaid Services to cut reimbursement rates for certain medical imaging procedures. In 2009, this translated into a decline of up to 5% in digital and analog mammography screening and diagnostic reimbursement rates and an approximate 19% decline in reimbursement for CAD. This is in addition to the Sustainable Growth Rate reduction, which requires that reimbursement rates factor in a 5.4% reduction in physician payments.

Currently, the US market for CAD systems continues to be dominated by solutions for breast cancer, which represent approximately 90% of sales. In addition to the major diagnostic imaging companies, a number of smaller manufacturers serve this market including iCAD Inc. in breast CT, Merge CAD Inc. (formerly Confirma, now a division of Merge Healthcare Inc.) in CAD for breast MRI, and Medipattern Corp., with a CAD technology that helps clinicians get more out of breast ultrasound. Lung cancer is another established CAD market, in which Median Technologies, MeVis Medical Solutions AG, and Riverain Medical have products on the market. It's hoped that CAD will boost the performance of CT colonography, a controversial non-invasive alternative to screening colonoscopy. Medicsight PLC and Viatronix Inc. operate in this space.

New applications for CAD are finally emerging in indications outside oncology, particularly in cardiology, where CAD is beginning to play a role in enhancing the performance of non-invasive imaging modalities in the elective and emergency workup of patients with certain life-threatening conditions. Emerging applications include CAD in conjunction with CT angiography for the diagnosis of pulmonary embolisms, the third most common cause of death in the US, and CAD-enhanced magnetic resonance angiography for the diagnosis of intracranial aneurysms. Finally, Optasia Medical Inc. hopes to bring CAD to the musculoskeletal realm, with a product that will help clinicians diagnose osteoporosis, osteoarthritis, and rheumatoid arthritis.

--Mary Stuart

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Companies mentioned in this article:

MeVis BreastCare GMBH & Co. KG

Median Technologies

Merge Healthcare Inc.

Merge CAD Inc.

Viatronix Inc.

iCAD Inc.

About Start Up

No publication reviews leading edge companies and technology better than START-UP. Each issue of START-UP profiles the most important new product companies, identifies the hottest technology areas, reviews funds flowing into private companies and investment trends, and reports on university tech transfer licensing. Industries covered: pharmaceuticals, biotechnology, medical equipment & devices, and in vitro diagnostics.