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With the advent of the IoT, AI, ML, and DL algorithms, the landscape of data-driven medical applications has emerged as a promising avenue for designing robust and scalable diagnostic and prognostic models from medical data. This has gained a lot of attention from both academia and industry, leading to significant improvements in healthcare quality. However, the adoption of AI-driven medical applications still faces tough challenges, including meeting security, privacy, and quality of service (QoS) standards. Recent developments in \ac{FL} have made it possible to train complex machine-learned models in a distributed manner and have become an active research domain, particularly processing the medical data at the edge of the network in a decentralized way to preserve privacy and address security concerns. To this end, in this paper, we explore the present and future of FL technology in medical applications where data sharing is a significant challenge. We delve into the current research trends and their outcomes, unravelling the complexities of designing reliable and scalable \ac{FL} models. Our paper outlines the fundamental statistical issues in FL, tackles device-related problems, addresses security challenges, and navigates the complexity of privacy concerns, all while highlighting its transformative potential in the medical field. Our study primarily focuses on medical applications of \ac{FL}, particularly in the context of global cancer diagnosis. We highlight the potential of FL to enable computer-aided diagnosis tools that address this challenge with greater effectiveness than traditional data-driven methods. We hope that this comprehensive review will serve as a checkpoint for the field, summarizing the current state-of-the-art and identifying open problems and future research directions.