In Korea, the path to integrating innovative medical technologies is fraught with obstacles, as regulatory hurdles and reimbursement issues impede the adoption of advanced diagnostic solutions.
During the K-Healthcare Business Forum on Wednesday — co-hosted by Korea Biomedical Review (KBR), The Korean Doctors’ Weekly, and the Korea Health Industry Development Institute (KHIDI) — representatives from Medical IP, Guardant Health, and Ybrain discussed the ongoing struggles to gain traction in Korea’s healthcare system.
Challenges in funding preventative AI technology in Korea
As demand for preventative AI technology rises, a key question remains: who will cover the costs?
Medical IP, a developer of AI-based medical imaging solutions, is working to expand its technology in Korea. Its CT-based body composition analysis tool, DeepCatch, is being adapted to X-ray technology. However, the use of X-rays to assess the aorta is not yet standard practice in Korea, complicating efforts to monetize these advancements.
Medical IP’s new 3D cardiovascular analysis tool, DeepCatch X, aims to help prevent aortic aneurysms by analyzing the size of the aorta. It also measures lung volume and heart size and removes visual obstructions like ribs and clavicles to provide clearer images of soft tissues. Kim Jong-min, leader of the AI Center at Medical IP believes the company’s technology could “one day replace traditional pulmonary function tests,” which are time-consuming and serve only a limited number of patients daily. However, adoption remains limited.
This year, Medical IP strengthened its partnership with DK Medical Systems, a medical imaging equipment company, by signing an exclusive contract in July to supply DeepCatch X. Their collaboration aims to improve X-ray technology quality and integration. Initial clinical trials at Samsung Medical Center showed that Medical IP’s technology outperformed competitors, enabling detailed assessments of lung function over time. However, Kim noted that this practice is “not yet standard in medical settings,” emphasizing that “questions about reimbursement for these services persist.”
Medical IP is also focused on monitoring pulmonary tuberculosis (TB), differentiating itself from competitors like Lunit and VUNO, which focus on screening. Their technology’s monitoring capabilities allow physicians to track treatment progress and detect resistance to medication. But without clear funding pathways, Kim said that “widespread adoption remains a challenge.”
The U.S. has already embraced multi-disease CT scans, which can detect up to 45 conditions in a single test. Medical IP is pushing for similar recognition in Korea, engaging health management centers to explore compensation strategies.
Despite these innovations, Medical IP faces an uphill battle. Kim noted that while the diagnostic sector is innovating rapidly, preventative care remains a challenging area to break into in Korea. “There’s still uncertainty about who will pay for preventative AI,” Kim said, highlighting the need for clearer policies to support these advancements.
Regulatory challenges impacting liquid biopsy access
As demand for advanced cancer diagnostics also surges, Michael Jung, the country head of Guardant Health, is urging Korea to overhaul its regulatory framework to improve access to liquid biopsy technology, which offers less invasive and more effective cancer detection.
Guardant Health, a Silicon Valley-based firm founded in 2012, has quickly become a leader in the cancer diagnostics space. Its flagship product, Guardant 360, analyzes tumor DNA found in blood to detect genetic alterations, providing critical insights for late-stage cancer diagnosis. Approved by the FDA in 2020, Guardant 360 was followed by the company’s colorectal cancer screening test, which received approval this year.
With over 100 targeted cancer therapies on the market, since Novartis’ breakthrough drug Gleevec (imatinib) launched in 2001, the demand for personalized medicine has intensified. According to Jung, liquid biopsy technology is a “groundbreaking method that revolutionizes cancer diagnosis.” Unlike traditional tissue biopsies, which are invasive, Jung explained, liquid biopsies analyze blood samples to monitor treatment effectiveness and adapt personalized therapies in real-time.
Guardant Health also focuses on detecting minimal residual disease—traces of cancer that may remain after surgery. “This early detection is crucial,” Jung said, explaining that survival rates for localized cancer reach 90 percent, compared to just 14 percent for metastatic cases.
In the U.S., despite around 120 million adults being eligible for colorectal screening, nearly 50 million do not undergo testing. Guardant aims to close this gap by making blood tests more accessible, potentially saving lives through earlier detection. “As the demand for advanced diagnostics increases, adapting the regulatory framework will be crucial to ensure accessibility and quality in cancer care,” he said.
Jung added that while Guardant is poised to revolutionize diagnostics with its automated system capable of processing hundreds of thousands of blood samples annually, regulatory hurdles remain. In the U.S., labs certified under the clinical laboratory improvement amendments (CLIA) can process tests across borders, allowing samples from Korea to be analyzed under U.S. Medicare guidelines. Europe follows a similar system. However, Korea’s regulatory framework is less adaptable when it comes to integrating foreign labs into its health insurance system.
Jung proposed an annual certification system for next-generation sequencing (NGS) labs in Korea, overseen by recognized experts, which would allow foreign labs like Guardant to operate alongside local labs. “We don’t expect to receive health insurance coverage for this due to cost differences,” he said, “but the government could recognize high-quality testing labs to improve access for patients.”
Barriers to innovation in neuro-engineering and digital therapeutics
Lee Ki-won, CEO of Korean neuroengineering firm Ybrain, highlighted the significant barriers to launching new healthcare technologies, particularly in neuroengineering. Despite developing a promising electroceutical for depression, Ybrain’s journey to commercialization of its MINDD STIM device took a decade—far longer than the anticipated three years.
“Inaccurate clinical assessments and the complexity of the healthcare system slow down innovation,” Lee explained, noting that disruptive technologies struggle to replace established methods in the medical device sector.
Ybrain, founded in 2013, initially aimed to bring its electrical stimulator to market within three years. However, the firm had to adapt as it confronted industry challenges, expanding into diagnostic support and management platforms. The use of electronic devices in healthcare, such as deep brain stimulation (DBS), had already been explored, with the FDA approving DBS in 1997 for treating dopamine-related conditions. Yet, the need for non-invasive treatments for conditions like depression led Ybrain to focus on developing smaller, more manageable devices.
“New technologies often emerge from decades of foundational research before receiving clinical validation and market entry,” Lee said, emphasizing that this process can take “considerable time.” Reflecting on Ybrain’s journey, he acknowledged that the company’s quick start, though, was hindered by a lack of foundational evidence, resulting in various delays.
Lee pointed out that while medical devices are generally easier to approve than new drugs, they still face obstacles. Ybrain’s device operates at a fraction of the energy level of earlier devices, which helped speed up clinical trials and approvals. As of Sept. 24, hospitals across Korea have prescribed over 90,000 MINDD STIM units to treat depression. However, Lee noted that discussions about reimbursement for digital healthcare technologies are “premature, given their varied efficacy.”
The Korean digital therapeutics market is expected to grow to 60 trillion won ($44.6 billion) in the coming years, but entering it remains challenging. Ybrain initially envisioned a simple product for depression, but healthcare system complexities made that goal unachievable. “The adoption of innovations can take decades, slowed by the intricate dynamics between patients, doctors, and financial stakeholders,” Lee explained.
While Lee praised Korea’s efficient healthcare system for its low costs and high consultation rates compared to the U.S., he noted that cultural factors also impact healthcare decisions. He cited Korea’s high elective C-section rate, despite similar costs to Israel, as evidence that social norms strongly influence medical choices. “Korea maximizes cost-effectiveness in healthcare services through organizations like the Health Insurance Review and Assessment Service (HIRA) and the National Health Insurance Service (NHIS),” Lee said. “However, this framework may not fully foster innovation.
link