Number of pages: 100 | Report Format: PDF | Published date: March 22, 2023
Historical Years – 2021 | Base Year – 2022 | Forecasted Years – 2023-2031
Report Attribute |
Details |
Market Size Value in 2022 |
US$ 258 billion |
Revenue Forecast in 2031 |
US$ 704 billion |
CAGR |
11.8% |
Base Year for Estimation |
2022 |
Forecast Period |
2023-2031 |
Historical Year |
2021 |
Segments Covered |
Service, Class Type, Application, and Region |
Regional Scope |
North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa |
According to the deep-dive market assessment study by Growth Plus Reports, the global medical device outsourcing market was valued at US$ 258 billion in 2022 and is expected to register a revenue CAGR of 11.8% to reach US$ 704 billion by 2031.
Medical Device Outsourcing Market Fundamentals
Medical device outsourcing refers to contracting with a third-party company to design, manufacture, or test medical devices for the original equipment manufacturer (OEM). This outsourcing can occur at various device development and production stages, including research and development, prototyping, testing, regulatory compliance, manufacturing, packaging, and distribution. The main reasons for medical device outsourcing include reducing costs, improving efficiency, accessing specialized expertise, and increasing flexibility. Outsourcing can also help OEMs to focus on their core competencies while leveraging the capabilities of external partners.
The medical device outsourcing market is rapidly growing, driven by the growing demand for medical devices, the increasing complexity of medical device development and manufacture, and the desire for cost reduction. Manufacturers can concentrate on their core skills, streamline operations, and cut costs by outsourcing some components of the production of medical devices. In addition, advancements in technology, such as artificial intelligence, 3D printing, and robotics, are expected to further drive revenue growth in the market. These technologies offer opportunities for increased efficiency, reduced costs, and improved quality in developing and manufacturing medical devices.
Geographically, North America and Europe are the largest markets for medical device outsourcing due to many established medical device manufacturers and a high level of regulatory compliance. Moreover, Asia Pacific is expected to experience the highest revenue growth rate due to lower labor costs, increasing investment in healthcare infrastructure, and growing demand for medical devices in emerging markets.
However, outsourcing also carries certain risks, such as potential quality issues, communication challenges, and the need to ensure compliance with regulatory requirements.
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Medical Device Outsourcing Market Dynamics
The demand for medical devices is increasing due to several factors, including aging populations, rising chronic diseases, and growing demand for innovative medical technologies. As a result, medical device manufacturers are under pressure to develop and manufacture new products quickly and cost-effectively, driving demand for the medical device outsourcing market. The development and manufacturing of medical devices are becoming increasingly complex due to technological advances, regulatory requirements, and the need for specialized expertise. Outsourcing companies can offer expertise in design, engineering, regulatory compliance, and manufacturing, which helps manufacturers reduce costs and improve quality, increasing the demand for medical device outsourcing. The cost of developing and manufacturing medical devices can be high. Outsourcing services can save costs by leveraging economies of scale, reducing labor costs, and providing access to specialized expertise. Moreover, manufacturers are increasingly outsourcing non-core activities to focus on their core competencies and reduce costs. As the medical device industry becomes more complex, manufacturers realize that handling all aspects of development and manufacturing in-house is not always practical or cost-effective.
Outsourcing services can provide specialized expertise, reduce costs, and improve efficiency, allowing manufacturers to focus on their core competencies. The medical device industry is highly regulated, and manufacturers are under increasing pressure to meet regulatory requirements. Outsourcing companies with expertise in regulatory compliance can help manufacturers navigate complex regulatory frameworks and reduce the risk of non-compliance.
However, the quality concerns associated with outsourcing are restricting the revenue growth of the medical device outsourcing market. Outsourcing medical device development and manufacturing involves sharing confidential and proprietary information with third-party partners, which can increase the risk of intellectual property theft or infringement, hampering the medical device outsourcing market revenue growth.
Medical Device Outsourcing Market Ecosystem
The global medical device outsourcing market is analyzed from four perspectives: service, class type, application, and region.
Medical Device Outsourcing Market by Service
Based on the service, the global medical device outsourcing market is segmented into quality assurance, regulatory affairs services, product design and development services, product testing & sterilization services, product implementation services, product upgrade services, product maintenance services, and contract manufacturing.
The contract manufacturing segment dominates the medical device outsourcing market with the largest revenue share. Medical device manufacturers can achieve significant cost savings by utilizing contract manufacturing, eliminating the need for expensive equipment and facilities. Through economies of scale, contract manufacturers can produce medical devices at a lower cost, ultimately reducing the manufacturer’s capital expenditures and operating costs. Contract manufacturers specialize in medical device manufacturing and have extensive experience and expertise in this field. They employ skilled personnel and utilize advanced technologies to guarantee high-quality products, regulatory compliance, and efficient production processes. Contract manufacturing allows medical device manufacturers to adjust production volume and product mix to meet changing market demands. This means manufacturers can quickly respond to market changes by outsourcing small or large batches of products to contract manufacturers. Medical device manufacturers can then concentrate on their core competencies, such as research and development, while outsourcing their manufacturing operations to contract manufacturers. This approach accelerates product development and reduces time-to-market. Contract manufacturers have a wealth of knowledge in navigating complex regulatory frameworks and can help medical device manufacturers comply with regulations. They possess expertise in quality management systems, product testing, and documentation, which reduces the risk of non-compliance and product recalls.
Medical Device Outsourcing Market by Class Type
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Based on the class type, the global medical device outsourcing market is segmented into classes I, II, and III.
The class II segment accounts for the highest revenue share of the medical device outsourcing market. The dominance of the Class II segment in the medical device outsourcing market is because these devices are subject to moderate to high regulatory control, requiring significant expertise and resources for development and manufacture. Outsourcing the production of Class II medical devices to specialized contract manufacturers enables medical device companies to benefit from the manufacturer’s expertise and resources, leading to increased efficiency and cost savings. Class II medical devices, including surgical gloves, infusion pumps, and cardiac monitors, are in high demand and have many applications. This high demand results in a large Class II medical device manufacturing market segment. Outsourcing to contract manufacturers can help medical device companies meet this demand more efficiently. In addition, Class II medical devices often require customization and design input, which can be complex and time-consuming. Contract manufacturers have the necessary skills, experience, and technology to design and manufacture Class II medical devices more effectively. This allows medical device companies to benefit from their expertise through outsourcing.
Medical Device Outsourcing Market by Application
Based on the application, the global medical device outsourcing market is segmented into cardiology, diagnostic imaging, orthopedic, IVD, ophthalmic, general and plastic surgery, drug delivery, dental, endoscopy, diabetes care, and others.
The cardiology segment accounted for a significant medical device outsourcing market revenue share. Cardiovascular diseases are one of the leading causes of mortality and morbidity globally. As a result, the demand for medical devices used to diagnose, treat, and manage cardiovascular diseases is high. According to the WHO, estimated 17.9 million deaths are caused due to cardiovascular diseases each year. The development and manufacturing of cardiovascular medical devices require a high level of expertise, technology, and resources. Contract manufacturers specializing in cardiology have the necessary skills and resources to design, develop, and manufacture these devices with high precision and efficiency, resulting in cost savings and improved time-to-market for medical device companies.
The cardiology segment includes a wide range of medical devices, such as pacemakers, defibrillators, stents, and catheters, which are essential in diagnosing and treating cardiovascular diseases. These devices require high levels of quality and regulatory compliance. Outsourcing their manufacturing to specialized contract manufacturers can help medical device companies meet these requirements more efficiently. The cardiology segment has a high rate of innovation, with new technologies and treatments constantly being developed. Contract manufacturers can help medical device companies keep pace with these developments by offering their design, development, and manufacturing expertise.
Medical Device Outsourcing Market by Region
Geographically, the global medical device outsourcing market has been segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.
The North America region accounted for a significant market revenue share in 2022. North America dominates the medical device outsourcing market due to its established medical device industry, which includes many leading medical device companies and a strong supplier ecosystem. The region’s well-developed regulatory environment demands strict safety, quality, and performance compliance. Contract manufacturers in North America are well-versed in navigating these regulatory requirements and are experienced in meeting industry needs. Moreover, North America is a hub for medical device innovation. Outsourcing to contract manufacturers can provide companies with the resources they need to accelerate product development and bring innovative products to market more quickly. Additionally, the North American market for medical devices is large and growing, driven by factors such as population growth, aging demographics, and the prevalence of chronic diseases, creating a significant market opportunity for contract manufacturers that can cater to the needs of medical device companies.
Medical Device Outsourcing Market Competitive Landscape
The prominent players operating in the global medical device outsourcing market are:
Medical Device Outsourcing Market Strategic Developments
The global medical device outsourcing market is expected to reach US$ 704 billion by 2031.
North America accounts for the largest market revenue share, followed by Europe. Asia Pacific is expected to be the fastest-growing region during the forecast period.
The prominent players operating in the global medical device outsourcing market are SGS SA, Eurofins Scientific, Laboratory Corporation of America Holdings, Pace Analytical Services, Inc., and Intertek Group plc.
The contract manufacturing segment dominates the global medical device outsourcing market.
Some market restraints include the quality concerns associated with outsourcing and the increased risk of intellectual property theft.
*Insights on financial performance are subject to the availability of information in the public domain