Medical Devices Outsourcing Market Analysis

Medical device outsourcing market is the phenomenon that emphasize on contracting with third party for product design, manufacturing, packaging, validation, prototyping and verification of medical devices in sterile and controlled environment for supply chain management.

The global medical devices outsourcing market is estimated to account for US$ 50,775 Mn in terms of value in 2020 and is expected to reach US$ 109,818.8 Mn by the end of 2027.

Global Medical Devices Outsourcing Market: Drivers

Increasing prevalence of chronic diseases is expected to propel growth of the global medical devices outsourcing market over the forecast period. For instance, according to the American Cancer Society, in 2019, there will be an estimated 1,762,450 new cancer cases diagnosed and 606,880 cancer deaths in the U.S.

Moreover, stringent government regulations for acquiring quality certifications are also expected to aid in growth of the market. Class II medical devices require pre-market approvals and 510(K) clearance, obtaining which involves a lengthy procedure. Medical device manufacturers are increasingly engaging consulting services to understand the regulations and the documentation required to obtain pre market approvals. 

Product Design And Development held dominant position in the global medical devices outsourcing market in 2019, accounting for 27.6% share in terms of value, followed by Regulatory Consulting and other services, and Product maintenance, respectively.

Figure 1: Global Medical Devices Outsourcing Market Share (%) Value, By Region, 2019

Global Medical Devices Outsourcing Market: Restraints

Adoption of multiple outsourcing partners is expected to hinder growth of the market.  Healthcare companies such as Boston Scientific and Johnson and Johnson are outsourcing medical device manufacturing services to multiple service providers. Due to the lack of end-to-end service providers, different outsourcing partners are used for different processes such as part manufacturing, product design, process validation, and regulatory consultation. This may hinder the growth of the market for medical devices. Multiple outsourcing also causes time constraints and requires effective coordination to ensure enhanced and optimized productivity.

Moreover, confidential data security issues are also expected to limit the market growth. Services such as product designing, product prototyping and process validation involve intellectual property right concerns. Outsourcing R&D services requires extensive data sharing between a medical device manufacturer and service provider. Many medical device manufacturers are reluctant to outsource such services for fear of losing their trade secrets.

Laser Vision Correction Market Report Coverage

Report Coverage	Details
Base Year:	2019	Market Size in 2019:	US$ 45,491.2 Mn
Historical Data for:	2016 to 2019	Forecast Period:	2020 to 2027
Forecast Period 2020 to 2027 CAGR:	11.7%	2027 Value Projection:	US$ 109,817.8 Mn
Geographies covered:	North America: U.S., Canada Latin America: Brazil, Argentina, Mexico, Rest of Latin America Europe: Germany, U.K., Spain, France, Italy, Russia, Rest of Europe Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, Rest of Asia Pacific Middle East: GCC Countries, Israel, Rest of Middle East Africa: South Africa, North Africa, Central Africa
Segments covered:	By Service Type: Product Design And Development, Regulatory Consulting and other services, Product maintenance, Product upgrade, Product testing and certification, Product implementation. By Device Class: Class I, Class II, Class III. By Application: Cardiology, Neurology, Radiology, Anesthesia, Orthopedic, Others.
Companies covered:	Onex Corporation, Cardinal Health, Inc., Integer Holdings Corporation, TE Connectivity Ltd., Flex Ltd., Heraeus Holding GmbH, Plexus Corporation, Sanmina Corporation, West Pharmaceutical Services, Inc., Accellent Inc., Active Implants Corporation, CIRTEC Medical Systems LLC, Mdmi Technologies Inc., Micro Systems Engineering GmbH, Creganna-Tactx Medical, and Avail Medical Product.
Growth Drivers:	Increasing prevalence of chronic diseases requiring medical intervention Increasing research and development
Restraints & Challenges:	High research and development costs Confidential data security issues

Global Medical Devices Outsourcing Market: Opportunities

Increasing trend of outsourcing IT services is expected to offer lucrative growth opportunities for players in the global medical devices outsourcing market. IT solutions such as SAP, ERP, and CRM have improved the performance of various industries by streamlining the processes and reducing the scope of error. The demand for IT-enabled solutions has also improved with the growing demand for medical devices and the increasing production capacity of medical device manufacturers. IT solutions also help manage outsourcing partners effectively. This offers huge opportunities for firms offering supply chain management solutions such as SAP and ERP. 

Moreover, several countries in Asia Pacific are encouraging outsourcing by setting up special economic zones. The lower taxes in these zones help reduce the cost of medical devices manufactured in the area. This in turn is also expected to aid in growth of the market. 

The global medical devices outsourcing market was valued at US$ 45,491.2 Mn in 2019 and is forecast to reach a value of US$ 109,817.8 Mn by 2027 at a CAGR of 11.7% between 2020 and 2027.

Figure 2: Global Medical Devices Outsourcing Market Value (US$ Mn), 2016 – 2027

Market Trends/Key Takeaways

Major players in the market are focused on investing in R&D. For instance, in June 2020, Integer Holdings Corporation started The Galway Research and Development (R&D) Innovation Centre in Ireland to enhance Integer’s capability to provide high-quality medical devices and technologies.

Major players in the market are also focused on adopting M&A strategies to expand their product portfolio. For instance, in April 2019, Cardinal Health acquired mscripts, a company that delivers patient adherence and engagement solutions through an easy-to-use mobile and web-based health management platform.

Global Medical Devices Outsourcing Market: Competitive Landscape

Major players operating in the global medical devices outsourcing market include, Onex Corporation, Cardinal Health, Inc., Integer Holdings Corporation, TE Connectivity Ltd., Flex Ltd., Heraeus Holding GmbH, Plexus Corporation, Sanmina Corporation, West Pharmaceutical Services, Inc., Accellent Inc., Active Implants Corporation, CIRTEC Medical Systems LLC, Mdmi Technologies Inc., Micro Systems Engineering GmbH, Creganna-Tactx Medical, and Avail Medical Product.

Global Medical Devices Outsourcing Market: Key Developments

Major players in the market are focused on adopting partnership strategies to expand their product portfolio. For instance, in April 2020, Electrochem Solutions, an Integer Holdings Corporation company, signed a technology licensing partnership with Nanoramic Laboratories that allows Electrochem to manufacture, sell and distribute Nanoramic’s FastCAP EE Series ultracapacitors worldwide.

Major players in the market are also focused on adopting M&A strategies to expand their product portfolio. For instance, in February 2020, Heraeus Medical Components, a part of Integer Holdings Corporation, acquired Contract Medical International.