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Medical Device Outsourcing - Global Market Trajectory & Analytics

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    Report

  • 366 Pages
  • July 2022
  • Region: Global
  • Global Industry Analysts, Inc
  • ID: 1946792

Global Medical Device Outsourcing Market to Reach $149.6 Billion by 2026


Medical device outsourcing is an approach where a third party assumes responsibility of managing device development and manufacturing operations either in part or in entirety. Medical device outsourcing continues to grow in significance led by the increasing need for medical device companies to recalibrate their strategies to reduce costs, accelerate time-to-market and focus on their core competencies. Medical Device Outsourcing involves a third-party operating a part or entire client`s technology assets. Outsourcing typically involves an agreement between the client company and the supplier or the external outsourcing service provider. As per the agreement terms, the supplier takes over the manufacturing means in the form of assets, workforce, and additional resources of the client company. Furthermore, the client company gets hold of the services provided by the supplier as per the contract terms. Medical device manufacturers (original equipment manufacturers or OEMs) sometimes hire a contract manufacturer to perform contract manufacturing services such as product prototype, production, injection molding, silicone compression molding, welding, assembly and packaging in a controlled environment, cleanroom and other auxiliary services such as metal machining. Medical device outsourcing can lower operational costs, increase business efficiency and boost productivity thus providing tangible, bottom line benefits to organizations.

Amid the COVID-19 crisis, the global market for Medical Device Outsourcing estimated at US$105.2 Billion in the year 2022, is projected to reach a revised size of US$149.6 Billion by 2026, growing at a CAGR of 8.4% over the analysis period. Contract Manufacturing, one of the segments analyzed in the report, is projected to record a 9.1% CAGR and reach US$82.6 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Quality Assurance segment is readjusted to a revised 10% CAGR for the next 7-year period.

The U.S. Market is Estimated at $46.3 Billion in 2022, While China is Forecast to Reach $16.2 Billion by 2026


The Medical Device Outsourcing market in the U.S. is estimated at US$46.3 Billion in the year 2022. China, the world's second largest economy, is forecast to reach a projected market size of US$16.2 Billion by the year 2026 trailing a CAGR of 9.5% over the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 6.8% and 7.7% respectively over the 2020-2027 period. Within Europe, Germany is forecast to grow at approximately 8.1% CAGR.

Medical device outsourcing market is set to record steady growth post the COVID-19 pandemic, as medical device companies resume strategies for cost-effective outsourcing solutions that can convert their fixed costs to variable. While optimistic economic outlook will help sustain the market momentum especially in the US market, factors such as ease of implementation and low costs will be prime factors in driving the adoption of medical device outsourcing, in both large and small enterprises. As companies modernize business practices in order to remain competitive and retain critical survival capabilities such as agility and flexibility in a rapidly changing marketplace, contract manufacturing market participants are positioned favorably to tap the emerging opportunities. Several advantages are stacked in favor of medical device outsourcing including dedicated product design teams, manufacturing cost reductions, minimizing number of process steps involved, cost-effective customized products, and improved time-to-market, among others.

Growth is also fostered by the escalating demand for a wide range of medical devices and supplies, particularly to meet the growing medical needs of the world's expanding geriatric population. Rising incidence of diseases specifically such as diabetes, cardiovascular disease, cancer and joint diseases are driving demand for a variety of medical devices, thus stimulating growth in the medical device outsourcing market. Increased spending on healthcare, enhanced disease screening and detection techniques, greater emphasis on cost-effective and minimally invasive therapies, and technological advancements in diagnostics and therapeutics are also stimulating market growth. Rising acceptance of outsourcing among OEMs of ophthalmic, cardiovascular, oncology, neurology and dental devices, and also among providers of medical device design engineering, testing & simulation tools will foster growth in the medical device outsourcing market. The demand for outsourcing is also gaining ground due to the increasing complexities in product engineering and the growing need to comply with stringent quality requirement of various regulatory bodies. With medical device manufacturers facing significant cuts in public spending in the US and several leading EU nations, they are turning towards outsourcing service providers to cut costs. Long-term growth will be fueled by the constantly declining time duration for commercialization of products, as companies look to gain an edge over rivals.

Product Testing & Sterilization Services Segment to Reach $17.5 Billion by 2026


In the global Product Testing & Sterilization Services segment, USA, Canada, Japan, China and Europe will drive the 7.3% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$10 Billion will reach a projected size of US$16.4 Billion by the close of the analysis period. China will remain among the fastest growing in this cluster of regional markets. Led by countries such as Australia, India, and South Korea, the market in Asia-Pacific is forecast to reach US$1.2 Billion by the year 2026.

Medical Device Miniaturization & Shortening of Product Lifecycles Drive Growth


The unfolding new device design possibilities as a result of continued miniaturization of electronic components is driving demand for specialized outsourced device manufacturing services. The growing demand for minimally invasive surgical procedures is encouraging the medical device miniaturization trend. The trend highlights the need for expertise in medical device micromachining, micromolding, microextrusion, and microfluidics technology and OEMs in this regard are increasingly leveraging the expert services of third party service providers. In other words, the miniaturization trend is driving usage of smaller electrical components and smaller flexible circuits, which in turn require smaller PCBAs (printed circuit board assemblies). Integrating components is a primary design challenge, as it requires integration of mechanical and electrical components into single micro-electromechanical system or incorporating more functions into a single microprocessor. Small, on-body devices are becoming disposable or/and conformable. Elastic flexible-circuit boards and housing materials need to be custom developed that adds to the cost of acquiring and maintaining skilled personnel and infrastructure in-house. In the technology intensive medical device industry, the miniaturization trend is stepping up the pressure on device OEMs to develop low cost products with improved aesthetics and functionality, superior efficacy and performance. OEMs, in this regard, are outsourcing design and manufacturing of devices to outsourced service providers, as an effective means to keep pace with demand. The cost advantages are additionally supporting the trend of increased outsourcing of these processes to supplier partners, as against in-house development.

Device manufacturers attempt to focus on continuous innovation in technologies to justify higher margin. Rapid technological obsolescence and technical parity within competing devices makes time-to-market critical for most of the device product lines. When technical innovation occurs, older technologies will be used in commodity items while new technologies fuel growth through premium pricing strategies. Therefore, OEMs are accelerating product developments and are treading new paths to get their products to more quickly to market, in order to gain first mover advantages. Selection of qualified third party contractor with capability of developing formulations, prototyping, and offering comprehensive manufacturing services, will shorten development and scale-up times essential for production. And with contract manufacturing fitting the bill in every aspect, the business case for the same stands exemplified.

Select Competitors (Total 74 Featured):

  • Benchmark Electronics, Inc.
  • Cadence, Inc.
  • Celestica, Inc.
  • Creganna Medical
  • Flex Ltd.
  • HCL Technologies Limited
  • ICON plc
  • Integer Holdings Corporation
  • Intertech Engineering Associates, Inc.
  • Memry Corporation
  • Millstone Medical Outsourcing, LLC
  • Nortech Systems, Inc.
  • Phillips-Medisize Corporation
  • Plexus Corporation
  • Providien, LLC
  • Sparton Corporation
  • Tecomet, Inc.
  • Thermo Fisher Scientific, Inc.
  • Viant
  • West Pharmaceutical Services, Inc.
  • WuXi AppTec Co., Ltd.

What`s New for 2022?

  • Global competitiveness and key competitor percentage market shares
  • Market presence across multiple geographies - Strong/Active/Niche/Trivial
  • Online interactive peer-to-peer collaborative bespoke updates
  • Access to the digital archives
  • Complimentary updates for one year

Table of Contents

I. METHODOLOGYII. EXECUTIVE SUMMARY
1. MARKET OVERVIEW
  • Influencer Market Insights
  • World Market Trajectories
  • Impact of Covid-19 and a Looming Global Recession
  • Global Surgery Cancellation Rate (%) Feb to May 2020
  • Exposure of Leading Medical Device Companies to COVID-19 Pandemic
  • Providers of Critical Medical Supplies Gain Traction
  • Medical Device Outsourcing - Global Key Competitors Percentage Market Share in 2022 (E)
  • Competitive Market Presence - Strong/Active/Niche/Trivial for Players Worldwide in 2022 (E)
  • Medical Device Outsourcing: An Introduction
  • Quality Remains Guiding Factor
  • Medical Device Outsourcing Services
  • Classification of Medical Devices
  • Medical Device Outsourcing Market by Device Category: 2020E
  • Market Outlook
  • Asia-Pacific Emerges as a Preferred Outsourcing Destination
  • Class II Devices: Important Device Category
  • Improving Healthcare Expenditure to Bode Well for Market Growth
  • World Healthcare Expenditure (In US$ Billion) for the Years 2017-2023
  • Per Capita Healthcare Spending (in US$) in Select Countries (2019)
  • Competitive Landscape
  • Market Share of Major Players in the Global Medical Contract Manufacturing Market for Finished Goods: 2020E
  • Market Share of Leading Players in the Global Medical Contract Manufacturing Market for Electronics Manufacturing Services (EMS): 2020
  • Consolidation Continues to Mark the Industry
  • World Brands
  • Recent Market Activity
2. FOCUS ON SELECT PLAYERS
3. MARKET TRENDS & DRIVERS
  • Focus on Core Competencies: A Major Objective of Contract Manufacturing
  • Global Medical Contract Manufacturing Market (2020E): Percentage Breakdown of Revenues by Segment
  • An Effective Strategy for Small & Mid-Size Companies
  • Offshoring Model Paves Way for Medical Device Market Growth in Emerging Nations
  • Contract Manufacturing Gains Importance as a Brand Promotion Channel
  • Onshoring Trend Gains Ground
  • Rise in Disease Incidences and Access to Modern Therapeutics Foster Growth
  • Global Cancer Incidence: Number of New Cancer Cases in Million for the Years 2018, 2020, 2025, 2030, 2035 and 2040
  • World Diabetes and Population Statistics (2019, 2030 & 2045)
  • Expanding Role of Outsourcing Partners and Rising Demand for Full-Service Providers
  • Contract Manufacturers Look to Innovations in Medical Devices
  • Design Engineering to Make Gains
  • Product Design & Development Services: High in Demand
  • Myriad Benefits Offered Drive Demand for Product Design & Development Services
  • R&D and After-Market Engineering Support Services for Medical Devices on the Rise
  • CRO Outsourcing Picks Up Momentum
  • Product Testing & Certification Services Gain Traction
  • OEMs Queue Up for Product Implementation and Supply Chain Services
  • Outsourced Regulatory Consulting Services Emerge as New Driving Force
  • Outsourcing of IVD Device Manufacturing Gains Momentum
  • Orthopedic Contract Manufacturing Market: Favorable Growth Potential
  • Global Orthopedic Devices Market by Category (2020):
  • Medical Electronic Manufacturing Services Providers See Increased Opportunities
  • Top 10 Selection Criteria for EMS Partner Ranked by Order of Importance
  • Medical Device Miniaturization Drives Demand for Outsourcing Services
  • Shortening of Product Lifecycles, Speed to Market to Drive Outsourcing Trend
  • A Brief Overview of Major Challenges
4. GLOBAL MARKET PERSPECTIVEIII. MARKET ANALYSIS
UNITED STATES
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in the United States for 2022 (E)
  • Market Overview
  • Impact of Covid-19
  • Medical Device Industry Dynamics
  • Growth in EMS Outsourcing
  • Medical Device Outsourcing in the US: The Largest Regional Market Worldwide
  • US-based Medical Device OEMs Move towards Onshoring Services
  • Competitive Scenario
  • Market Share of Leading Players in the US Medical Device Outsourcing Market: 2020E
  • Market Analytics
CANADA
JAPAN
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in Japan for 2022 (E)
  • Growing Demand for Medical Devices to Spur Medical Device Outsourcing
  • Market Analytics
CHINA
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in China for 2022 (E)
  • Market Overview
  • China: High Growth Market for Medical Device Outsourcing
  • Market Analytics
EUROPE
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in Europe for 2022 (E)
  • Market Overview
  • Regulatory Scenario Favors Medical Device Outsourcing
  • Market Analytics
FRANCE
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in France for 2022 (E)
GERMANY
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in Germany for 2022 (E)
ITALY
UNITED KINGDOM
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in the United Kingdom for 2022 (E)
SPAINREST OF EUROPE
ASIA-PACIFIC
  • Medical Device Outsourcing Market Presence - Strong/Active/Niche/Trivial - Key Competitors in Asia-Pacific for 2022 (E)
  • Market Overview
  • South Asia: Transforming into a Preferred Destination for Medical Device Outsourcing
  • India Emerges as a Lucrative Outsourcing Destination
REST OF WORLD
  • Latin America
  • Brazil: ANVISA Brings Forward New Medical Device Modification Rules
  • Market Analytics
IV. COMPETITION
  • Total Companies Profiled: 74

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Benchmark Electronics, Inc.
  • Cadence, Inc.
  • Celestica, Inc.
  • Creganna Medical
  • Flex Ltd.
  • HCL Technologies Limited
  • ICON plc
  • Integer Holdings Corporation
  • Intertech Engineering Associates, Inc.
  • Memry Corporation
  • Millstone Medical Outsourcing, LLC
  • Nortech Systems, Inc.
  • Phillips-Medisize Corporation
  • Plexus Corporation
  • Providien, LLC
  • Sparton Corporation
  • Tecomet, Inc.
  • Thermo Fisher Scientific, Inc.
  • Viant
  • West Pharmaceutical Services, Inc.
  • WuXi AppTec Co., Ltd.