AR and VR for healthcare

What we learn from the list of FDA-approved devices

Augmented reality (AR) and virtual reality (VR) solutions are often seen as the next seismic change to how we’ll interact socially and the way we’ll work. But beyond the hype, there are some real, near-term opportunities for these technologies to improve how healthcare is delivered. Some companies have already sought marketing authorisation from the FDA for their medical AR and VR technologies. The agency has just shared a list of AR and VR medical devices legally marketed in the US. through 510(k) clearance, De Novo classification, or Premarket Application Approval. Altough the list may not be exhaustive (as the FDA indicated), it provides an interesting snapshot of the market’s current status.

Our key findings

The market is gradually picking up speed: The FDA approved, on average, two devices per year between 2015-2018. But between 2019 and 2021, that number increased to almost eight (Figure 1). It is important to recognise that this is only the visible end of the regulatory journey. When we checked on clinicaltrials.gov we found an almost 30% annual growth of clinical investigations that include the terms virtual or augmented reality over the last 10 years.

Radiology and orthopedics are leading the way: These therapy areas have by far the most devices that have gone through approval, with 74% of devices falling into either one of these two categories. Augmented reality gives surgeons the opportunity to visualise and navigate the surgical plan right in front of their eyes, without taking their hands, or their attention, away from the surgical field. Innovative solutions, like the Knee+ system from Pixee Medical or NextAR from Medacta (the company with most approvals), are already on the market and enable intra-operative planning and guidance by using the combination of AR and tracking devices. Radiology solutions often focus on 3D-viewing of datasets by connecting with PACS systems or other patient databases.

Most of the solutions are focused on healthcare professionals (HCPs): Of the 39 approved solutions 34 target HCPs, which given the strong focus on radiology and orthopedic, may not be surprising.
There are some really innovative solutions: Notable patient-facing exceptions that focus on providing actual treatments include EaseVRx and Luminopia One, that were both seeking authorisation via the de-Novo pathway. EasyVRx (now re-branded to RelieVRx) is a cognitive behavioral therapy (CBT) that provides pain-relief treatment as adjunctive therapy for chronic lower back pain. Luminopia One is a digital therapeutics for Amblyopia (often termed ‘lazy eye’).

What does this preliminary snapshot tell us?

Many companies appear to be taking a wait-and-see approach

It is still early for AR and VR solutions in healthcare, an industry that is not necessarily known as a frontrunner in implementing digital technologies. However, there are some niches that offer the opportunity to innovate. Unlike the case for the consumer market, the cost of devices is not as critical. But companies are still challenged to make their VR and AR solutions easy and intuitive to use.

We also note that it’s mostly smaller companies, rather than the big device manufacturers themselves, that tend to file applications for these products. An important caveat is that the list focused on solutions that fall under the FDA’s oversight. Some manufacturers may start in the European market. For example, Oncomfort is so far only marketing its digital sedative solution as software-as-a-medical-device (SamD) in the EU. Also, many manufacturers (and tech companies) may focus on lower-risk healthcare solutions that can create workflow efficiency or are used for general training and do not require FDA approval. Examples of these include Zimmer Biomet’s Optivu or Meta’s MetaMEdicsVR. Aside from certain niches, the limited traction of AR and VR solutions we see today may justify large manufacturers’ caution about going through the rigor of developing an FDA-approved device. However, when taking a wait-and-see approach, incumbents should ensure that they are building the capability and talent to move quickly once the market shows signs of maturing. For companies that plan to partner or buy rather than building their own capabilities, it is critical to stay close to their customers and understand how they perceive the technology and best in class players. A late mover could end up paying a premium or be forced to settle for a second-tier product.

Innovators face the challenge of collecting evidence to convince all stakeholders

The fact that most solutions (37/39) are basing their approval on predicate devices can be interpreted in two ways:

Companies are taking a cautious approach to their regulatory strategy.
Innovative products that represent a significant increment or change in the healthcare ecosystem (e.g. DTx or diagnosis tools targeting more serious diseases) are not yet reaching the market.

The latter represents an opportunity for first movers to seize by addressing a real, unmet need.

The challenge to get such novel tools into patients’ hands will be to generate sufficient and appropriate evidence – especially for clinical data from device investigation – on their safety and effectiveness. This needs to take into account the risks specific to the use of AR/VR as highlighted by the FDA (e.g. cybersickness or head and neck strain, or cybersecurity and privacy risks). Overall, it is critical that innovators develop a comprehensive evidence-generation plan that tackles both regulatory expectations (early interaction with regulators should be planned in the product development) and the expectations and needs of the broader ecosystem of stakeholders in order to drive adoption by HCPs, users and payers, for instance.

The list published by the FDA gives an interesting snapshot of the current state of VR and AR for medical applications. With just under 40 solutions, we can clearly see that the market is still in its relative infancy. However, the large number of trials (see figure 3) featuring these technologies shows much more to come in the future. As we learned from our latest digital health survey, there is optimism in the industry that such digital health solutions will get reimbursed. Nevertheless, medical AR and VR applications will only be successful if they offer the most appropriate and user-friendly solution to addressing a real unmet need. “Technology push” solutions will not be sustainable in the long run.

Building an integrated strategy

At PwC we are supporting pharma and medical device companies to bring such innovative solutions to the market at every stage from early strategy definition to development and implementation. This includes helping to define a regulatory approach that de-risks and reduces time to market. Please reach out to us if you have any questions.

Figure 3: Number of clinical trials by start date found on clinicaltrials.gov when filtering by “Augmented Reality” or “Virtual Reality”.