By many measures, robotic surgery has been a great success. Proponents of the approach note that the technology allows surgeons to accomplish their goal with less invasive techniques, and allows procedures to be performed more precisely and reproducibly. They also note that robotics technology enhances the performance of surgical teams while requiring less effort and precision on the part of the surgeon. Additionally, hospitals are actively advertising that they offer robotics solutions. That is, the systems themselves act as marketing and recruitment tools.

As robotic surgery becomes more cost effective, robots will be created to perform commonplace surgeries so that a surgeon’s skill can be devoted to performing more critical and challenging surgical tasks.



Distribution


Da Vinci's Creator


Intuitive Surgical (ISRG), Sunnyvale, CA currently has a lock on the robotic surgery market. Highlights of Intuitive Surgical's third quarter 2008 financials included total revenue growth of 50% to $236 million. During that time, 91 da Vinci Surgical Systems were sold, an increase of 44% compared to the third quarter of 2007. President and CEO Lonnie Smith says, "These results reflect the continued adoption of robotic surgery as a growing number of patients benefit from the improved clinical outcomes and reduced surgical trauma that our da Vinci products enable."

The da Vinci Surgical System is the only device of its kind approved for clinical use by the FDA available on the market. As of September 2008, there have been 1,032 unit shipments worldwide - 776 in the United States, 171 in Europe and 85 to the rest of the world. The average cost of the da Vinci Surgical System is $1.3 million.

Due to the success of this company, a great deal of interest is brewing in the industry and market entry from other larger medical device and robotic companies may be on the horizon. The competition should bring the cost of surgical robotic systems down and lead to wider usage in less developed areas.

Robotic Technology


InTouch Health of Santa Barbara, CA and ISGR have developed a partnership to integrate InTouch Health's Remote Presence platform into the da Vinci Surgical System. The technology will enable surgeons located in different geographies to perform remote surgical proctoring, training and collaboration. The incorporation of the two systems should allow for more efficient means of training surgeons. The Remote Presence System, produced by InTouch enables a remotely based surgeon to project his presence into an operating room where a surgeon is performing a da Vinci surgical procedure. Using a high speed Internet connection, the system provides high quality, real-time audio and video allowing the remote surgeon to effectively view the surgery from multiple cameras while interacting with the surgeon and operating staff. "The RP-7 robot instantly brings specialists to hospitals across the globe in need of training and expertise on surgical procedures that they might not otherwise have access to," commented Dr. Yulun Want, Chairman and CEO of InTouch Health.

Accuray(ARAY) manufactures Cyberknife, a targeted radiation machine useful for all kinds of radiation treatments that can track moving tumors and spare nearby tissue, making it a popular tool for prostate and lung cancers. The Cyberknife is mounted on a robotic arm and controlled by computer. It allows physicians to closely target tumors while the robotic arm tracks the slight
movements of tumors during treatment, thus reducing the additional radiation that hits nearby parts of the body.

FreeHand is Prosurgics' next generation robotic camera holder. It was selected by the Society of Laparoendoscopic Surgeons (SLS) as their Innovation of the year, 2008. The Free-Hand laparoscopic camera holder is the first of Prosurgics' new generation of robotics, designed to bring the benefits of clear visualization and direct camera control within the reach of surgeons in every laparoscopic surgical unit. Bill Perry, President of Prosurgics' newly formed US organization believes that, "FreeHand is an important innovation because it has been designed to solve problems experienced by every laparoscopic surgeon, such as poor visualization and variable levels of surgical procedure assistance. FreeHand's numerous benefits and its affordability explain why we expect FreeHand to become an everyday necessity in operating rooms across the world in the coming years." Currently, FreeHand has not received FDA clearance and is limited to 'investigational' use.

Quanser Inc. based in Canada uses sophisticated Haptic Technology to advance minimally invasive surgery techniques. A year ago, they started a research and development partnership to advance robotically -assisted surgery between Canadian Surgical Technology and Advanced Robotics (C-STAR) and Ontario Centres of Excellence (OCE), supported by Quanser and its cuttingedge Haptic Technology. Led by CSTAR, the $750,000 research project builds on Quanser's work in the area of haptics and advanced robotic technology, with the ability to add a realistic 'sense of touch' to surgical robotic tools. Quanser has previously integrated its expertise and equipment into medical training simulators and surgical robotic prototypes and will provide integral components for the new project - aimed at improving techniques for minimally invasive surgery.

"We are designing robotic tools to enhance surgical capabilities, allowing the surgeon to transcend the limitations of conventional technology and work in a less invasive environment," says Quanser CEO Paul Gilbert. "As we continue to make advancements, we will see a widening in the range of surgical procedures for which robotically-assisted surgery is suited - from brain-microsurgery to surgery over long distances."

Adding a realistic 'sense' of touch allows the surgeon to check for calcification, to feel the 'pop' when a needle pokes through tissue, to feel resistance when suturing, or against a scalpel. The technology eliminates natural tremors and prevents accidental movements from being transmitted to the robotic tools. The new initiative, entitled "Haptics-Enabled Robotics-Assisted Minimally Invasive Surgery," is supported by more than half-a-million dollars in investments, including $247,000 in funding from OCE. Gilbert says, "Without OCE's support for this groundbreaking research and development, we would not be able to invest the time and resources necessary to explore these new and important applications for haptic technology." The Natural Science and Engineering Research Council Canada (NSERC) also provided funding.



Marketing


Assessing the market – how bright is the future?


HBS Consulting believes that medical science is on the threshold of a revolution in contemporary medicine with robotics taking a leading role in bringing technology ever closer to the surgeon/patient interface. This revolution is likely to be aided by the reduction in the cost of robotic systems as production and competition increases, as clinical results and patient outcomes prove the efficacy and effectiveness of robotic systems and as robots are linked directly to imaging modalities to improve response times. Average selling prices for robotic systems can run to just under $1m, with the US market commanding the highest selling prices. With increasing restraints on hospital and healthcare system budgets one of the key issues concerning the purchase of robotic systems is the means to not only prove product efficacy but also the ability to provide cost benefit analyses demonstrating value for money.
The points raised are just some of the questions which would be highlighted in a market assessment for robotic surgery applications. Based on the concepts raised in the headline article in this Quarterly, HBS Consulting would tackle the market analysis primarily through interviews with orthopaedic surgeons. The role of physician advocacy in driving the market is seen as a critical component and views on current and future penetration rates is best researched through interviewing thought leaders and surgeons who are both for and against widening use of robotic systems in minimally invasive surgery in general, and orthopaedic surgery in particular.
The primary research process not only allows understanding of current installed base but also planned installations. The task is made somewhat easier by the fact that the target interviewees are likely confined to academic and key community hospitals since these institutions constitute the main thrust of marketing team effort from the established robotics system suppliers. Physician interview questionnaires will also be designed to highlight the benefits and disadvantages of using robotic surgical techniques which will provide valuable information for product development purposes. The value of the assessment exercise is therefore not confined purely to an understanding of market numbers but becomes an important part of wider business strategy. Cross referencing current business development and marketing strategies with physician viewpoints becomes critical and serves to either validate or challenge existing market perceptions.
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We anticipate that over the next decade significant improvements in basic engineering knowledge and the development of robust, flexible systems through collaborative research projects will significantly increase the number of surgical applications and enable more precise manipulations in smaller spaces and with fewer traumas to the patient.
Although the future of robotic surgery is certain it is however extremely unlikely that in the foreseeable future robots will ever completely replace the surgeon since through his/her expertise and guidance the safe and accurate performance of each operation is assured.

Broad Economic Impact


A sound technology acquisition model seeks to align net health outcomes with the economic value of innovation. When costs and benefits are weighed together, technological advances over time have proven to be worth far more than their costs.

A technology assessment of the
da Vinci® Surgical System will demonstrate broad hospital-wide benefit in the areas of market share growth, utilization mix, productivity and efficiency.



Worldwide robotically-assisted surgery systems equipment shipment markets are set to have rapid growth. Markets at $626.5 million in 2007 are anticipated to reach $1 billion in 2008 and are forecast to go to $14 billion by 2014. Growth comes because the technology is mature and the technology works. It took a long, long time for the markets to evolve, but now the MIS surgeries are accurate and less invasive that alternative surgical methods, creating market opportunity.

Companies Profiled

  • Market Leaders
  • Surgical Assist Robots
  • Intuitive Surgical

Market Participants

  • iRobot
  • AIST / National Institute of Advanced Industrial Science and Technology and Japan Science and Technology
  • Cypress Computer Systems
  • Fraunhofer Institute for Manufacturing Engineering and Automation
  • IPA Care-O-bot
  • Fujitsu
  • Hitachi Ltd.
  • Honda
  • LG Electronics
  • MicroDexterity Systems Microsoft MobileRobots
  • Mopec Prosurgics
  • Richard Wolf Medical Instruments Ross-Hime Designs
  • Sinters SA Terumo Medical
  • Toshiba Zeiss


Click here for an article about the stocks of medical robotics in 2007: Medical Robotics stocks: A Shining Star for a Troubled Sea