There are many issues to consider when talking about wearables in the medical device sector – from technology advancements to the risks a company can face – so those entering the arena need to be prepared and protected on all fronts. Patty Nichols, second vice president of Medical Technology Underwriting at Travelers sat down with Today’s Medical Developments magazine to help explain the nuances in this fast-growing market.

Today’s Medical Developments (TMD): What is the growth potential of wearables?

Patty Nichols (PN): The growth potential of wearables in the medical and health care industry is extraordinary. Specifically, some of the biggest quality-of-life improvements from healthcare wearables include the promise of detection, prevention, and treatment of chronic disease, as well as the ability to reduce healthcare costs.

In fact, Swiss research firm Soreon expects the wearables market to top $40 billion by 2020 in the healthcare industry alone. The ability of wearables to improve quality of life and reduce the cost of care are key factors that will drive growth in the healthcare and medical sector. As a result, an increasing number of technology companies are aggressively pursuing the wearables opportunity in this sector, as are many emerging startups.

TMD: What are the major risks faced by medical device makers entering the wearables space?

PN: Medical device makers face three main categories of risk in integrating wearable technology.

Cyber risk – Often defined as the risk of financial loss, business interruption, or reputational damage due to an organization’s failure to properly secure the data held within its information systems. It can occur as a result of a cyber criminal’s attack, an ineffective information technology (IT) policy, a failure of IT security software, or even a disgruntled employee. Nearly all high-profile data breaches lead to proposed class action lawsuits and wearable device manufacturers can certainly be among the defendants in such suits if a device is alleged to have contributed to a breach.

Bodily injury risk – In order for wearable devices to deliver on the quality of life benefits they promise, they must be used as intended and function properly at all times. Should a wearable device ever fail, the device maker could be liable for bodily injury risk or damages from a resulting injury, illness, or even death of a user or patient. Wearable manufacturers should understand and mitigate the risk of a product liability claim.

Technology errors & omission risk – Despite a wearable device maker’s best efforts to manufacture and market a reliable product that people can use to enhance their quality of life, things can go very wrong. In addition to bodily injury, a company can be held liable for economic losses arising from the failure of a device to work as intended, due to an error; omission; or negligent act. Wearable device failures can impact business continuity, reputation, and other factors. Companies that understand the unique nature of this risk category can better protect themselves from liability claims.

Given the rapid pace of technological change, it is important to note that companies involved with wearable technology are unlikely to ever fully understand and eliminate their current or emerging exposures. However, safety features, data protection measures, effective contract risk management, and good design decisions can help companies significantly reduce their exposure to some of the major risks we see today.

TMD: Which types of coverage should companies consider in order to mitigate these risks?

PN: To effectively manage their exposures to these three main categories of risk, medical device makers should consider the following insurance options:

Information security coverage, which provides coverage for critical cyber risks. Coverage options vary, but most include network and information security liability, as well as communications and media liability. Companies can also opt for many first-party expense reimbursement coverages, including data restoration, business interruption, computer and funds transfer fraud, crisis management, and security.

Product liability coverage, which provides coverage for loss arising from bodily injury risk. Available options cover consumer fitness tracking devices, as well as doctor-prescribed medical wearables.

Errors & omissions (E&O) liability coverage, which protects against damages that a medical device manufacturer must pay because of economic loss resulting from its products or its work and caused by an error, omission, or negligent act.

TMD: Which steps should medical device manufacturers be taking to secure their wearable products from cyber threats?

PN: While the FDA is not aware of any patient injuries associated with cybersecurity incidents, nor is it aware of hackers purposely targeting any specific medical devices or systems in clinical use, that does not mean medical device manufacturers can ignore these risks.

The FDA has issued a series of guidance documents to assist medical device manufacturers in mitigating and managing cybersecurity threats which include:

Medical device manufacturers and healthcare facilities should take steps to ensure appropriate safeguards. Manufacturers are responsible for remaining vigilant about identifying risks and hazards associated with their medical devices, including risks related to cybersecurity. They are responsible for putting appropriate mitigations in place to address patient safety risks and ensure proper device performance.

Hospitals and health care facilities should evaluate their network security and protect their hospital systems.

In addition, medical device manufacturers can protect themselves from potentially facing product liability and other claim types by designing simple, yet effect security features into their devices. This can include:

Bluetooth encryption. Bluetooth offers an encrypted Application Programming Interface (API) when exchanging data between a device and its target data store, but not all companies take advantage of this feature because it decreases battery life.

Encrypt critical data elements. The most critical pieces of data transferred between wearable devices and data stores are user IDs, passwords, and PIN numbers. Avoid transferring these data elements in plain text, which has no encryption measures at all.

Secure the cloud. Data is often transmitted from a wearable device to a smartphone and then to a cloud data store. Virtualized clouds can secure data with multiple diverse operating systems, each operating within a different security context. Banks often secure depositor payment details this way and wearables companies should consider similar functionality.

Travelers
www.travelers.com

About the author: Elizabeth Engler Modic is the editor of Today’s Medical Developments. She can be reached at 216.393.0264 or emodic@gie.net.

Global 3D printing in HEALTHCARE

$2.3 billion by 2020 at a CAGR of 26.2%

Global 3D printing MARKET

$30.19 billion by 2022 at a CAGR of 28.5%

Global 3D printing healthcare market REVENUE

$1.2 billion by 2020 at a CAGR of 18.3%

Products

• Orthopedic implants
• Prosthetics
• Dental implants
• Hearing aids
• Neuroanatomical parts
• Organs, tissues
• Surgical tools

Materials

• Metals
• Resins
• Biological
• Plastics
• Ceramics

Processes

• Laser beam melting
• Stereolithography
• Electron beam melting
• Photo polymerization
• Droplet deposition
• Laminated object

Drivers

• Error reduction
• High accuracy
• Efficient raw material use
• Ability to build customized products
• Simultaneous use of multiple materials for printing
• Efficient production, financials
• Competency vs. traditional techniques

Challenges

• High production cost to individual
• Expensive 3D printing software
• Lack of channel partner assistance
• Scarcity of skilled labor

Leo Somerville, former president of Renishaw Inc., has been promoted to oversee Renishaw North America’s healthcare business. Replacing Somerville as president is Howard Salt, former business manager of encoder products. Somerville will continue to develop technical and commercial strategies in his new R&D role.

A new senior management team has been created to support Salt. David Bozich, former MT/scanning business manager, was appointed vice president operations. Denis Zayia, former national sales and marketing manager, was appointed vice president sales and marketing.

Additionally, Renishaw’s North American growth continues in Auburn Hills, Michigan, with a 20,070ft2 technology and research center. The center will provide turnkey measuring solutions to Chrysler, Ford, and General Motors, while supporting medical and aerospace companies.

In West Dundee, Illinois, Renishaw will soon complete its new 133,000ft2 office and warehouse facility. This includes the North American Solutions Center – part of Renishaw’s network of global solutions centers – opening in 2017. These centers provide venues where additive manufacturing adoption can be accelerated. www.renishaw.com

Rapid tooling, prototyping program

Freudenberg Medical offers a comprehensive program for quick-turn tooling and prototyping. Rapid Prototype WorkCell is a four-part program that includes a modular mold system; a 3D cavity set made of steel, plastic, or aluminum inserts; a dedicated molding press; and dedicated design engineers to manage the process.

Freudenberg Medical’s Rapid Prototype WorkCell can deliver custom 3D printed cavity inserts in two-to-four days, depending on the complexity. If a customer prefers working with steel or aluminum inserts, the turnaround is longer, but the program delivers real parts for review and testing prior to implementation of production tooling. www.freudenbergmedical.com/rapid

After a very long, heated presidential campaign, U.S. citizens elected a new president. No matter which candidate you supported, division about the outcome was immediately obvious from the reactions that ranged from wishing failure on the president-elect to hate for fellow Americans.

On Jan. 20, 2017, President Barack Obama will leave office and Donald Trump will be sworn in as the 45th president of the United States. Now is not the time to argue about who won, it is the time to stay vigilant that campaign promises are upheld, because an administration’s failure would be failure for all of us. Trump pledged, “to every citizen of our land that I will be president for all Americans, and this is so important to me.” This is ‘so important to me’ as well because how we react and how we treat each other matters. Only tolerance and acceptance – bringing citizens back together – will show if our country has the wherewithal to come together and prosper.

One major campaign platform was bringing jobs back to America, with manufacturing having a huge stake in policy change and reform. The president-elect’s 7-point plan to rebuild and fight for free trade states that he is for “negotiating fair trade deals that create American jobs, increase American wages, and reduce America’s trade deficit.” Manufacturers are likely to welcome his promises to lower taxes and reduce business regulations, but they also know that it needs teamwork.

The National Association of Manufacturers’ (NAM) has shown its want for collaboration and willingness to work together, when more than 1,100 manufacturers and business leaders signed the NAM’s Nov. 9, 2016, letter, Manufacturers: We Are the Solution. Its members expressed their commitment to:

Reunit(e) our country and our people after this particularly difficult election. American families, businesses, and our communities cannot truly prosper and reach their full potential in a country that is divided and distrustful.

We will look for areas upon which we agree and can work productively with your new administration. To be sure, we are aware that there will be times when we disagree on the specifics of important policies, and we will respectfully make our voices heard when we do. We do believe, however, that we can be constructive – both when we agree and when we do not – if we can all approach challenging situations in good faith, guided by an unwavering commitment to a greater purpose.

There will be challenges, and how they are approached will determine progress or stagnation. While factory production has more than doubled since 1979 (see TMD Sept. 2016 editorial: https://goo.gl/oXU3Ag), there’s still work to be done regarding policies that promote reshoring, support R&D, protect intellectual property (IP), and build a strong manufacturing workforce.

Our country can progress, but it’s all about how we treat each other. That means everyone needs to be willing to work together. What are your plans to help manufacturing stay strong and get stronger? Drop me a line and let me know at emodic@gie.net. ~ Elizabeth