Software as a Medical Device (SaMD), a category of software that performs medical functions independently of hardware medical devices, is rapidly transforming the healthcare landscape. With artificial intelligence (AI) at its core and a global push for digital health, SaMD is poised for exponential growth, though navigating the complex regulatory terrain remains crucial for industry players.

Market on an Exponential Trajectory

The global SaMD market is experiencing a significant surge. Valued at approximately USD 1.43 billion in 2024, it is projected to reach an astounding USD 29.22 billion by 2033, demonstrating a remarkable Compound Annual Growth Rate (CAGR) of nearly 40%. Other estimates predict a rise to USD 5.73 billion by 2031 (CAGR 20.13%) or even USD 84.26 trillion by 2029 (CAGR 22.9%), highlighting the massive potential and varied analyses of this burgeoning sector. This growth is driven by the increasing adoption of IoT and connected devices in healthcare, the expansion of telehealth and remote patient monitoring, and the growing demand for personalized and precision healthcare.

AI and Machine Learning: The Brains Behind SaMD

AI and Machine Learning (ML) are the primary engines of innovation within SaMD. AI-enabled SaMD systems are proving successful across various medical fields:

• Advanced Diagnostics: From recognizing skin cancer through image analysis to interpreting medical images and predicting potential heart attack incidents, AI algorithms are enhancing diagnostic accuracy and speed. Companies like Aidoc and Prenosis are already leveraging AI for tools that assist in radiology prioritization and sepsis risk assessment.
• Personalized Medicine: AI models analyze vast amounts of patient data, including genetic information and medical history, to provide tailored treatment recommendations and predict disease progression.
• Remote Monitoring: Wearable devices and smartphone cameras are now integrating with AI-powered SaMD to monitor vital signs, track chronic conditions, and detect early deterioration, enabling proactive interventions. JBA AI, for instance, recently earned FDA SaMD recognition for its mobile application that offers contactless vital sign monitoring via smartphones.
• Workflow Automation: AI notetakers and other AI-powered tools are streamlining clinical documentation and reducing administrative burdens, allowing healthcare professionals to focus more on patient care.

Evolving Regulatory Landscape: A Global Harmonization Effort

Regulators worldwide are working to keep pace with the rapid innovation in SaMD. The International Medical Device Regulators Forum (IMDRF) plays a crucial role in standardizing global regulations, with new guidance documents on risk classification and lifecycle management for AI/ML-enabled SaMD released in early 2025.

• FDA's Focus: The U.S. FDA continues its focus on digital health, real-world evidence (RWE), and patient-centered approaches. In January 2025, the FDA shared a draft guide on "Artificial Intelligence-Enabled Device Software Functions: Lifecycle Management and Marketing Submission Recommendations," emphasizing transparency and real-world performance monitoring.
• India's Framework: In India, the Central Drugs Standard Control Organization (CDSCO) included software in the list of medical devices regulated under the Drugs and Cosmetics Act, 1940, in February 2020. India is expected to fully implement its new Medical Devices Rules by 2025, which significantly impacts regulatory processes for SaMD. The CDSCO's specific guidelines for SaMD are aligned with IMDRF's risk-based classification. This move aims to ensure safety, efficacy, and reliability for public use, while also granting access to the Indian market for compliant products.

Digital Therapeutics (DTx): A Key Segment of SaMD

Digital Therapeutics, which deliver evidence-based therapeutic interventions through software, are a rapidly growing subset of SaMD. Propelled by the urgency of chronic conditions and strong regulatory support, the global digital therapeutics market was valued at USD 7.07 billion in 2024 and is expected to reach USD 45.56 billion by 2033. Recent FDA clearances include prescription video games for ADHD and CBT chatbots for postpartum depression, showcasing the expanding therapeutic applications of SaMD.

Challenges and Opportunities Ahead:

While the future is bright, challenges remain. Data privacy and cybersecurity are paramount concerns, demanding robust measures and compliance with regulations like HIPAA and GDPR. The lack of fully unified global AI-specific cybersecurity standards and the need for explainability and transparency in AI models also present hurdles. However, these challenges also create opportunities for companies that prioritize robust data security, develop user-friendly solutions, and effectively navigate the complex regulatory landscape.

 the burgeoning tech and healthcare ecosystem is well-positioned to contribute to India's SaMD market growth, with local companies leveraging AI and cloud technologies to develop innovative solutions that align with both national regulatory frameworks and global quality standards. The city's digital health infrastructure and growing talent pool could make it a significant hub for SaMD innovation in the coming years.