Medical Device Contract Manufacturing Market by Product Type [Diagnostic & Monitoring Devices and Therapeutic Devices], Services [Device Development & Manufacturing Services, Quality Management Services and Final Goods Assembly Services], Application [Cardiovascular, Orthopedic, Diabetes, Pulmonary, Oncology and Diagnostic Imaging] – Global Outlook & Forecast 2021-2031
According to the deep-dive market assessment study conducted by Growth+Reports, the global Medical Device Contract Manufacturing market was pegged at ~US$ 60.6 billion in 2020. The market is expected to witness a CAGR of ~10.3% from 2021 to 2031.
Rising incidence of chronic diseases, increasing R&D activities, growing medical device market, and medical device startups opting for contract manufacturing owing to high capital investment are some of the pivotal factors propelling the growth of the medical device contract manufacturing market. However, consolidation in the medical devices market is likely to restrain the market growth to a certain extent.
Government bodies and numerous organizations across the globe are implementing several initiatives to fast-track the development of medical device contract manufacturing by providing the necessary funding, grants, permissions, clearances & approvals to meet the needs of the healthcare sector. For instance, in Mar 2020, the government of India approved a production-linked incentive (PLI) scheme for promoting domestic manufacturing of medical devices, with financial implications of ₹3,420 crore ($469 million).
Chronic diseases such as cancer, heart attack & stroke, chronic respiratory problems and diabetes are the leading causes of death globally. According to the WHO, an estimated 17.9 million people died from CVDs in 2016, representing 31% of all global deaths. Of these deaths, 85% are due to heart attack and stroke. Whereas, in 2016, an estimated 1.6 million deaths were directly caused by diabetes. Rising prevalence of these diseases coupled with increasing awareness among the people regarding timely diagnosis & treatment of diseases is expected to propel the growth of the medical device market, which in turn is likely to spur the growth of medical device contract manufacturing market.
As the manufacturing of medical devices need high capital investment for set up of production facilities, many new medical companies are turning to third-party contract manufacturers to keep their startup and internal costs down and speed time to market their products. Thereby, propelling the growth of the market.
However, consolidation in the medical devices market is expected to restrain the market to a certain extent. The outsourcing of manufacturing has dramatically shifted in recent years, with a wave of consolidation among medical device companies. Prominent players in the medical device market are continuously acquiring various small players to build a full range of manufacturing capabilities, in order to stay competent in the market. As a result, companies are able to reduce their number of suppliers and simplify the value chain. Smaller and less-strategic contract manufacturers are removed from their approved supplier lists. This factor is expected to hamper the growth of the market.
The Asia Pacific region is projected to be the fastest-growing medical device contract manufacturing market. The high growth of the region can mainly be attributed to developing healthcare infrastructure, rising R&D investments by prominent players to develop break-through medical devices, low labor costs and presence of a less stringent regulatory environment as compared to most developed countries. Countries such as India and China in the APAC region are expected to offer significant growth opportunities owing to increasing prevalence of chronic diseases and rising geriatric population in the region.
Some of the prominent players operating in the medical device contract manufacturing market are Gerresheimer AG, Integer Holdings Corporation, West Pharmaceutical Services, Inc., Benchmark, Plexus Corp, Celestica Inc., NIPRO PHARMA CORPORATION, Sanmina Corporation, TE Connectivity, FLEX LTD, among others.