Medical Device Outsourcing Market

The global medical device outsourcing market size was USD 99.88 Bn in 2022 and is estimated to reach USD 226.95 Bn by 2031, expanding at a CAGR of 11% during, 2023–2031. increasing demand for medical devices and rising price competition globally are fueling the market.

Medical device outsourcing is a supply chain management phenomenon that focuses on contracting with a third-party for prototyping, testing, production, product design, packaging, and verification of medical equipment in a sterile and regulated environment. Outsourcing usually entails a contract between the client company and the supplier or outsourced service provider. It enables device manufacturers to concentrate on their core operations, such as product development and marketing.

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It aids in lowering the overall cost and time required to bring a product to market. Medical device outsourcing has a number of benefits, including shorter manufacturing time, early product release, and quality check certifications that meet regulatory requirements. Medical device outsourcing is famous among original equipment manufacturers.

Outsourcing reduces manufacturing time, which ensures early entry of products into the market and the need to meet regulatory standards.  The impact of COVID-19 pandemic has been positive on the medical device outsourcing market. During the pandemic, the demand for single-use medical instruments and Personal Protective Equipment (PPE) is projected to spur. The majority of clinical trials were focused on treating and diagnosing COVID-19.

According to Trialtrove, in January 2022, several trials were conducted for central nervous systems diseases and oncology. The pandemic caused a disruption in the supply chain, which slowed the pace of production This resulted in scalable manufacturing operations among OEMs, especially those producing diagnostic systems and test kits. Moreover, the COVID-19 pandemic drives product sterilization services.

Medical Device Outsourcing Market Dynamics

Major Drivers

Increasing geriatric population globally and high prevalence of chronic diseases are projected to boost the market during the forecast period. Moreover, the market is growing due to the increased pressure on manufacturers to reduce overhead and operational costs while maintaining the quality of healthcare services. Rising number of healthcare devices, primarily in hospitals is expected to boost the market in the coming years.

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Existing Restraints

The lack of reimbursement options for medical device outsourcing is expected to hamper the market during the forecast period. Reimbursement options successfully commercialize the product and help to propel the market. Thus, reimbursement policies are important for medical devices to gain optimal outcomes for the business. Moreover, the reimbursement policies vary from one country to another.

Emerging Opportunities

Development of technologically advanced solutions for supply chain management is projected to create significant opportunities for the market players. Supply chain monitoring is supported by advanced technologies such as Robot Process Automation (RPA), Augmented Reality (AR), Computing & Machine Learning (AI/ML), and the Internet of Things (IoT) to increase efficiency and transparency in the processes.

Scope of Medical Device Outsourcing Market Report

The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Medical Device Outsourcing Market Segment Insights

On the basis of service, the market is segmented into product testing & sterilization, product implementation, product upgrade, product maintenance, quality assurance, contract manufacturing, regulatory affairs services, and product design & development. The contract manufacturing segment is classified as device manufacturing, component manufacturing, assembly manufacturing, and accessories manufacturing.

The regulatory affairs services segment is categorized as legal representation, regulatory writing & publishing, and clinical trial applications & product registrations. The product design & development segment is divided into packaging, molding, machining, and designing & engineering.

The contract manufacturing segment is projected to expand at a considerable CAGR during the forecast period, due to a growing focus on decreasing the cost of production. Increasing complexities in manufacturing contribute to market expansion. Medical device manufacturers focus on manufacturing high-quality and safe devices for patient care. Medical devices go through a high level of inspection, which creates layers of regulations and standards.

The quality assurance segment is anticipated to account for a major market share during the forecast period. Medical device manufacturers are offering high-quality components and ensuring compliance with safe and effective finished medical devices. Maintenance of an effective quality management system is an integral part of the production of every medical device. For instance, ISO 13485 is a quality management system, which involves the development, maintenance, and implementation of the products that are used by medical device manufacturers and suppliers.

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Based on application, the market is divided into cardiology, diabetes care, endoscopy, dental, drug delivery, general & plastic surgery, ophthalmic, IVD, orthopedic, and diagnostic imaging. The cardiology segment is expected to hold a significant share of the market in the coming years. In 2019, as per the WHO, 17.9 billion people died due to cardiovascular diseases, representing 32% of all global deaths.

Disabilities and deaths due to cardiovascular disease are rising across the globe. Thus, various devices are used in the treatment of cardiovascular diseases. The complexity of cardiovascular devices, the need for technical expertise, and the rising manufacturing of these devices are anticipated boost the cost to the OEMs, which is projected to increase the need for outsourcing.

The general & plastic surgery segment accounts for a significant share of the market, owing to the availability of competent outsourcing firms, which comply with the regulatory requirements and the rising demand for cosmetic surgeries. People who are not happy with their physical appearance opt for cosmetic surgeries, thereby boosting the segment.

Noninvasive surgeries and minimally invasive surgery are performed through minute openings without the need for large incisions. As per the Aesthetic Society, plastic surgery increased by 55%. Rise in the number of surgeries performed drives the demand for procedure-specific and innovative devices.

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On the basis of class type, the global market is segregated into class I, class II, and class III. The class II segment is anticipated to expand at a substantial CAGR during the forecast period, owing to the high cost of medical devices. The class II segment includes catheters, syringes, surgical gloves, pregnancy test kits, contact lenses, blood pressure cuffs, and blood transfusion kits. 

The class I segment is expected to hold a significant share of the market. Devices that fall under this segment are noninvasive. These devices are fast and easy to purchase from the market, as these devices cause no harm to the patient. Class I devices are exempted from Premarket Approval Requirements (PMA) and the Food and Drug Administration’s (FDA’s) premarket notification (510k).  

In terms of region, the global medical device outsourcing market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market during the forecast period, owing to competitive pricing and the presence of market players in the region.

The patient population suffering from chronic and infectious diseases is rising in the region and thus, increasing the demand for medical devices. For instance, growing demand for CT scanners to detect pneumonia in India. The market in North America is anticipated to expand at a rapid pace during the forecast period, due to rooted manufacturing hubs for consistent, high-end, and complex medical devices.

The region has several prominent market players, which outsource part of their consulting and regulatory functions to regulatory service providers, contributing to the market in the region. Continuous evolution of technology and increase in awareness about medical devices among healthcare professionals propel the market in North America.

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Segments

The global medical device outsourcing market has been segmented on the basis of

Service

• Product Testing & Sterilization
• Product Implementation
• Product Upgrade
• Product Maintenance
• Quality Assurance
• Contract Manufacturing
  • Device Manufacturing
  • Component Manufacturing
  • Assembly Manufacturing
  • Accessories Manufacturing
• Regulatory Affairs Services
  • Legal Representation
  • Regulatory Writing & Publishing
  • Clinical Trials Applications & Product Registrations
• Product Design & Development
  • Packaging
  • Molding
  • Machining
  • Designing & Engineering

Application

• Cardiology
• Diabetes Care
• Endoscopy
• Dental
• Drug Delivery
• General & Plastic Surgery
• Ophthalmic
• IVD
• Orthopedic
• Diagnostic Imaging

Class Type

• Class I
• Class II
• Class III

Region

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Toxikon, Inc.
• North American Science Associates, Inc.
• Charles River Laboratories International, Inc.
• PAREXEL International Corp.
• IQVIA
• SGS S.A.
• Eurofins Scientific SE
• Pace Analytical Services, LLC
• Intertek Group plc
• WuXi AppTec, Inc.

Competitive Landscape

Key players in the global medical device outsourcing market are Charles River Laboratories International, Inc.; Eurofins Scientific SE; Intertek Group plc; IQVIA; North American Science Associates, Inc.; Pace Analytical Services, LLC; PAREXEL International Corp.; SGS S.A.; Toxikon, Inc.; and WuXi AppTec, Inc.

Some of the above mentioned companies use various organic strategies including product launches, mergers, partnerships, and collaborations to increase their market share and global presence. Key players are actively engaged in R&D programs and aim at the expansion of manufacturing units to expand their consumer base and increase their product portfolio.

Major players in the market are projected to boost their global presence and offer one-stop solutions to increase market share.

• In January 2021, SGS SA received the FDA approval to participate & provide services for third-party 510(k) premarket submissions for medical devices.
• In December 2021, Laboratory Corporation of America Holdings acquired Toxikon Inc., a CRO, to expand its offerings by providing testing services for pharmaceuticals, medical devices, and other industries.  
• In April 2020, Eurofins announced that its laboratories in countries in Europe and Asia and the US, are providing worldwide service offerings for testing, inspection, and regulatory services focused on medical gloves, gowns, and face masks along with respiratory protective devices & equipment.