Managing Director & Partner
Almost daily, new and innovative biomedical uses for 3-D printing (also known as additive manufacturing) are reported. Scientists are exploring, for example, how to use 3-D printing to produce microrobots that deliver medicine inside the human body, how to create a skin-like material—complete with hair follicles and sweat glands—for skin grafts, and how to print human organs from living cells for transplants.
A growing portion of these news reports are no longer about inventions that are coming but about technology that has arrived. A man in China received a 3-D-printed elbow joint after suffering a major work-related injury. Surgeons in Wales used a 3-D printer to reconstruct the facial bones of a man injured in a motorcycle accident. And a baby in the U.S. is thriving with a 3-D-printed splint that props open his windpipe so he can breathe.
Some health-care sectors are already experiencing the impact of 3-D printing. Dentistry and orthodontics are two examples. More than 19,000 metal copings (used to create crowns and bridges) are now produced on 3-D printing equipment every day. Approximately 17 million clear aligners are created on 3-D printers each year. Audiology has seen even more sweeping changes. Approximately 90 percent of all hearing aids now sold in the U.S. incorporate patient-fitted shells that are produced by 3-D printers.
According to Wohlers Report 2014, biomedical applications now account for about 14 percent of revenues for companies that provide 3-D printing equipment, materials, and services worldwide, and there is an expanding ecosystem of enabling services—such as 3-D imaging, scanning, design, and modeling—that facilitate the preprinting, printing, and postprinting processes.
The health care industry offers numerous opportunities for 3-D printing for several reasons.
Although there are many promising benefits of and emerging applications for 3-D printing, much uncertainty exists about its potential growth in and effect on the health care industry. Will 3-D printing be confined to niche markets or break out to become a game changer?
In this article, we analyze the potential growth and size of the market for 3-D-printed biomedical products, highlight the health care sectors most likely to be affected by 3-D printing, and recommend next steps for health care players. Like all disruptive innovations, 3-D printing presents both risks and opportunities for incumbents. The time for health care companies to weigh the ramifications for their business is now.
Industry analysts agree that 3-D printing is a fast-growing, multibillion-dollar market, but the projections for market growth across industries vary widely, with estimates ranging from $9 billion to $21 billion by 2020. To make these projections, analysts have assessed market growth from the supply side—by evaluating the companies that sell the printers, materials, and services. If we flip this analysis on its head and, instead of focusing on sales of 3-D printing equipment and services, concentrate on the end-use demand for 3-D-printed products, we get a much clearer picture of where this market is heading.
To gauge end-use demand, we interviewed experts from leading medical-technology companies, providers of 3-D printing systems, start-ups, and academic institutions. We also developed a market growth model that projects future revenues from biomedical products that are manufactured using 3-D printing. Our model tracks many applications that are expected to create end-use demand for 3-D-printed products in the midterm, including knee and hip implant solutions, dental screws and abutments, long-term dental temporaries, dental implant suprastructures, clear dental aligners, bone fillers, bioprinted tissue that can be used to test the toxicity of drugs in development, custom surgical guides, and cranio-maxillofacial (CMF) implants.
On the basis of our analysis, we expect that revenues from 3-D-printed biomedical products could reach $5 billion by 2020. (See Exhibit 1.) Clear aligners, an established 3-D-printed orthodontic application that has been around since the late 1990s, will continue to be an area of major growth. Clear aligners are currently the only example of what we would call a killer app—a product that persuades medical professionals to switch to a 3-D-printed application because patients highly value the product and buy it in high volumes or because the product requires customization that is not well suited to traditional manufacturing. With no other killer apps on the horizon, the overall commercial opportunity for 3-D-printed products in health care would likely be limited in the near future.
However, in the next five to ten years, we expect that orthopedic and dental products, biological scaffold materials, and bioprinted cell culture and tissue will have a moderate but meaningful effect. And biomedical companies have extremely robust product pipelines and rapidly maturing R&D, which have the potential to increase exponentially the long-term end-use demand for 3-D-printed products. In particular, the significant amount of R&D that is currently being conducted in the areas of tissue engineering, innovative pharmaceuticals, microfluidic chips, and diagnostics could boost the market for 3-D-printed biomedical products over the long term.
Although 3-D printing earned its stripes as a rapid-prototyping tool, the technology’s greatest potential lies in the industrial end-product space. (See “Why Advanced Manufacturing Will Boost Productivity,” BCG article, January 2015.) A small number of equipment manufacturers dominate the marketplace today, with Stratasys and 3D Systems controlling approximately 75 percent of the market, followed by about 35 smaller players. Although their business models have historically been focused on the sale of printers, materials, and services, a competitive advantage will come from building a platform that enables other businesses across the 3-D printing ecosystem to connect and flourish.
This fact is not lost on the 3-D printing companies or the investors in this space. In an analysis of approximately 200 companies that have received investments for 3-D printing since 2011, we found that a large share of these investments are earmarked for novel and enabling technologies in areas adjacent to the printing process, such as design services, software solutions, and 3-D imaging and scanning. (See Exhibit 2.) This indicates that the end game will be decided by companies that can offer 3-D printing and these services. In other words, the future is not in the equipment. The future is in the platform.
Like any emerging technology, 3-D printing faces some fundamental barriers to adoption in the health care sector. These barriers include the limitations of materials science; the high costs of 3-D printing, compared with the costs of traditional manufacturing processes, such as injection molding, casting, or milling; quality concerns; and the acceptance by health care providers, payers, and patients.
Regulatory concerns have not been a significant hurdle thus far. The U.S. Food and Drug Administration has approved approximately 80 medical devices with parts that were created by 3-D printers. Most devices were approved through 510(k) premarket notifications or emergency-use pathways. The agency plans to release guidelines for 3-D printing in 2015. The new European Medical Device Directive is expected to cover 3-D printing under its “custom-made devices” category, which has a low regulatory burden. Although 3-D printing hasn’t raised any regulatory red flags, this could change if we see a significant uptick in decentralized manufacturing (for example, if hospitals were to begin printing their own implants).
So what should health care companies do to prepare for the ways 3-D printing may transform their sector? The following checklist identifies the critical steps companies should take to capture value from 3-D printing.
As an entire ecosystem accretes around the 3-D printing industry, health care companies have an opportunity to create new products that have never been seen before—and 3-D printing will capture its fair share of the manufacturing landscape. Current 3-D printing technology has the potential to help slash costs associated with product supply chains, overhead, shipping, and facilities; more important, 3-D printing can be used to improve clinical outcomes and increase patient access to care. Forward-thinking businesses are already envisioning innovative models for the design, manufacturing, and delivery of novel, groundbreaking products. Planning today will create a competitive advantage tomorrow.