Insurance and the Medical 3-D Printer: Key Questions, Emerging Solutions

By James O'Brien

There is no case law for liability when it comes to 3D printing. Yet. That will change in the future but until then, industry experts are looking at what it means to create new objects out of sometimes atypical materials in a relatively new way. Additive manufacturing is under the insurance lens. When it comes to medical applications, the stakes have seldom been higher.

Mishaps, Materials, and Liability

Here's what we know: Costs associated with making things in the 3D-printing world are coming down. Million-dollar machines, according to Graeme Newman, in a recent look at the technology for Insurance Journal, are now priced at mere hundreds of dollars to obtain. Add to that, the demand for what 3D printers can do – especially in the biotech and medical space – is on the rise.

Entrepreneurs are on the trail of 3D-printing success. But unlike massive manufacturing facilities 3D printing can operate out of smaller, more nimble shops. Regulation of 3D printing, or lack thereof, has insurance experts talking.

"Insurance companies like FDA oversight of manufacturing because it makes products safer and helps identify responsibility when things go wrong," said Mark Schonfeld, a partner at Burns & Levinson LLP, speaking to Dan Holden at Risk & Insurance earlier this year.

Outside of that regulatory environment, it will be up to insurance professionals to educate, advise, and create policies that protect both consumers and themselves. The policies that emerge in the 3D-printing space have to adequately protect both entities against what may – and eventually will – go wrong with 3D-printed products composed of plastic, metal, pharmaceutical ingredients, even living tissue.

That equation becomes even more complicated when one considers a possible second wave of 3D printing options: the manufacturer could rearrange the production ecosystem.

"3D printing also lends itself to a more flexible supply chain," wrote Jamie Rogers, at Hogan Lovell's Global Insurance Blog. "Businesses may seek to reduce cost by supplying e-designs, allowing customers to print their products for themselves. This limits the opportunities for quality control."

Beyond that consideration, what's another key question when it comes to 3D printing in the medical-applications milieu? It has to do with not just compromised products, whether printed by a manufacturer or perhaps produced on-site at a hospital or clinic, but also the intellectual property that these items represent.

Second Specter: 3D Printing and the Integrity of Design

Counterfeiters have almost certainly never had a tool like the 3D printer.

"Hackers can take the proprietary blueprint or software, send it to a third-world country, and have the product ready for market tomorrow,” said David Carlson, U.S. manufacturing and automotive practice leader at Marsh, speaking to Risk & Insurance. "That’s a business-disruption issue. Counterfeiters can put a company out of business."

Not a wanted scenario when the company is making life-saving products and playing by the rules of best practices. Patients and medical professionals want the best possible iterations of 3D printing in their space, not potentially compromised duplications.

Solutions to that problem emerge in the area of what the 3D-printing industry can do to the products they create. In the way of older-school printing – think, paper printing – a kind of watermark or trace signature added to three-dimensional printed products, from drugs to replacement hips. It is one avenue by which counterfeiting might be identified.

We are on the cusp of a brave, new, printed world of products. The questions that come with that horizon are important, and not necessarily a symptom of bad things to come. They are an indicator that the technology with which we manufacture is pushing more than one envelope. How we vet and protect ourselves in the manufacturing space is changing rapidly, too. Insurance practices will continually evolve to meet that challenge.