Medical Device Outsourced Manufacturing Market

The global Medical Device Outsourced Manufacturing Market is valued at USD 29.8 Billion in 2022 and is projected to reach a value of USD 76.8 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 14.5% between 2023 and 2030.

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According to a February 2022 report from the Centers for Disease Control and Prevention (CDC), 4.6% of people have ever been diagnosed with coronary heart disease. Additionally, according to statistics from the National Cancer Institute (NCI), in 2020, there will be 1,806,590 new instances of cancer identified in the country, and by 2030, there will be 2.2 million cancer survivors. Rising demand for medical equipment used in diagnosing and treating chronic diseases is being caused by the predicted rise in their burden. The demand for contract manufacturing services is therefore anticipated to increase. Diagnostic medical tools used in vitro on biological samples to ascertain a person's health state. In vitro diagnostics (IVDs) cover a wide range, from simple self-tests for pregnancy and blood glucose checks for diabetics to complex diagnoses carried out in clinical laboratories. The segment is growing because of the implementation of strategic initiatives by several market participants. For instance, Tecan purchased Paramit, a global contract manufacturing and development firm primarily focused on medical devices and instruments for the life sciences, in August 2022. Tecan's position in life sciences and in-vitro diagnostics (IVD) solutions is anticipated to be further strengthened by purchasing Paramit.

Key Highlights

• By Device Type, the high demand for the IVD devices segment will increase in the market from 2023 to 2030.
• By Service Type, the Device Development & Manufacturing Services segment dominated the largest market share globally from 2023 to 2030.
• By Class of Device, the Class II medical devices segment holds the largest share globally from 2023 to 2030.
• In 2022, North America dominated the market with the highest revenue share of 42.1%.
• The Asia Pacific region is expected to grow at a high CAGR from 2023-2030.

The expanding medical device industry significantly influences the market's expansion. For instance, the WHO update from 2022 estimates that there are 2 million various types of medical devices, which are divided into more than 7000 generic device groupings. Additionally, Rosti Romania obtained a fresh medical device contract in June 2021 for its brand-new production plant. This demonstrates the expansion of the global market for medical devices, which is driving up demand for contract manufacturing services. Additionally, some businesses lack the internal resources necessary to produce medical equipment. Contract manufacturing is therefore chosen to produce such products, thereby fostering the expansion of the market.

Economic Insights

Governments in numerous APAC nations are pressuring manufacturers to adopt Industry 4.0 to accelerate the creation of cutting-edge medical products. For instance, Thailand's 4.0 growth model led to the establishment of an inventive center to boost medtech device development and production. To help small and medium-sized businesses (SMEs) create newer technologies, the Intellectual Property Innovation-driven Entrepreneurship Center (IP-IDE) maintains its own data pool and patent information. The Thai government hopes to inspire Thai medical device companies to develop and expand into both domestic and international markets with the IP-IDE center. The increased use of medical equipment in hospitals, diagnostic labs, pharma, biotech companies, and academic and research institutions is another effect of the APAC region's expanding healthcare spending. Governments in this region have also introduced new healthcare programs, including Healthy China 2030 in China and the Ayushman Bharat - National Health Protection Scheme (AB PMJAY) in India.

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Top Market Trends

1. Increased Demand for Cost-effective Manufacturing: The global market is expected to grow significantly due to the increased demand for cost-effective manufacturing of medical devices. Outsourcing manufacturing operations allows companies to reduce costs and improve product quality by leveraging the expertise of specialized contract manufacturing organizations (CMOs). The rising cost pressure on medical device manufacturers, coupled with the need for advanced manufacturing technologies and regulatory compliance, is driving the outsourcing trend in the market. CMOs offer several advantages, including reduced time-to-market, improved manufacturing efficiency, and access to a skilled workforce. Additionally, the growing complexity of medical devices, such as advanced implants and diagnostic devices, requires specialized manufacturing capabilities that may not be available in-house. Outsourcing enables manufacturers to focus on core competencies, such as research and development, while leaving the manufacturing process to experienced partners.
2. Growing Complexity of Medical Devices to Augment Growth: Medical devices are becoming more advanced and sophisticated, requiring specialized manufacturing processes and expertise. However, many medical device companies lack the necessary resources and capabilities to handle the manufacturing in-house, leading to an increasing trend of outsourcing these operations. Outsourced manufacturing allows medical device companies to leverage contract manufacturers' specialized knowledge and capabilities, ensuring that the devices are manufactured to the highest quality standards. Additionally, outsourcing helps companies to reduce costs, increase efficiency, and focus on their core competencies. As the complexity of medical devices continues to increase, the demand for outsourced manufacturing services is expected to grow further in the coming years.

Market Segmentation

The global Medical Device Outsourced Manufacturing market can be categorized as Device Type, Service Type, Class of Device, and Region. Based on Device Type, the market can be categorized into IVD Devices, Diagnostic Imaging Devices, Cardiovascular Devices, Drug Delivery Devices, Orthopedic Devices, Ophthalmology Devices, Diabetes Care Devices, Dental Devices, Respiratory Care Devices, Surgical Devices, Gynaecology/ Urology Devices, Personal Care, Neurology Devices, and Other Devices. Furthermore, based on the segment Service Type, the market can be split further into Device Development & Manufacturing Services, Quality Management Services, Packaging & Assembly by Type, and Other Services. Additionally, based on the Class of Device, the market can be categorized into Class I Medical Devices, Class II Medical Devices, and Class III Medical Devices. Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on the Device Type

IVD Devices to Accommodate Maximum Market Share Due to Increasing Demand for Diagnostic Testing and Monitoring Devices

In 2022, IVD devices dominated the market. IVD devices play a crucial role in diagnosing diseases and are widely used in hospitals, clinics, and laboratories. The increasing prevalence of chronic diseases, growing demand for point-of-care testing, and advancements in healthcare infrastructure are driving the adoption of IVD devices. Outsourced manufacturing allows medical device companies to focus on research and development and reduce manufacturing costs. Therefore, IVD devices are expected to accommodate the maximum market share in the global market.

Based on the Service Type

Device Development and Manufacturing Services to Express Dominion Owing to the Increasing Demand for Customized Medical Devices

Between 2023 and 2030, the device development and manufacturing services category is anticipated to grow fastest. These services are essential for developing and producing medical devices, ensuring their quality and regulatory compliance. Additionally, device development and manufacturing services help companies reduce costs and improve efficiency by leveraging the expertise and resources of outsourcing partners. Thus, they are in high demand in the global medical device industry, leading to their dominant market share.

Based on the Class of Device

Class II Medical Devices to Accommodate Maximum Market Share Due to the Growing Demand for Advanced Medical Devices and Technological Advancements in Healthcare

Class II medical devices, including products such as X-ray machines, insulin pumps, and MRI scanners, require a higher level of control and regulation than Class I devices, making outsourcing the manufacturing process more beneficial for companies. The global market is expected to grow significantly in the coming years, with Class II devices accounting for a major share. Factors such as cost-effectiveness, the expertise offered by outsourcing partners, and technological advancements are driving the demand for outsourced manufacturing of Class II medical devices on a global scale.

Based on Region

North America to Lead Global Sales Owing to Changing Lifestyles and Increasing Popularity

The presence of a well-developed healthcare infrastructure, technologically advanced manufacturing facilities, and many outsourcing companies in the region has fueled the demand for vegan protein powders in North America. Additionally, The United States is the major contributor to the market growth in North America, driven by factors such as high healthcare expenditure, favorable government policies, and a strong focus on research and development. Furthermore, the increasing demand for quality medical devices, cost-effectiveness, and the need for efficient manufacturing processes are also propelling the growth of the medical device outsourcing market in North America.

In 2022, the market in Asia-Pacific was growing rapidly. This can be attributed to factors such as the increasing demand for medical devices, favorable government policies, low production costs, and a skilled labor force. Countries like China, India, and Japan are key players in this region and are attracting major outsourcing contracts due to their advanced manufacturing capabilities. Additionally, advancements in technology and the growing need for personalized healthcare solutions are further driving the market growth in the Asia Pacific region.

Competitive Landscape

The global market is highly competitive, with several key players focusing on strategies such as mergers and acquisitions, partnerships, and collaborations to strengthen their market position. Some prominent players in the market include SGS SA, Laboratory Corporation of America Holdings, Euro fins Scientific, Pace Analytical Services Inc., Intertek Group plc, WuXiAppTec, North American Science Associates, LLC, TÜV SÜD, and Sterigenics U.S., LLC (GTCR, LLC). These companies focus on expanding their manufacturing capabilities and geographical presence to gain a competitive edge in the market.

The key players in the global Medical Device Outsourced Manufacturing market include - SGS SA (Switzerland), Laboratory Corporation of America Holdings (U.S.), Euro fins Scientific (Luxembourg), Pace Analytical Services Inc. (U.S.), Intertek Group PLC (UK), WuXiAppTec (China), North American Science Associates LLC (U.S.), TUV SUD (Germany), Sterigenics U.S. LLC (GTCR LLC) (U.S.), Charles River Laboratories (U.S.), Medical Device Testing Services (U.S.), RJR Consulting Inc. (U.S.), Mandala International (France), FreyrGlobal Regulatory Partners (U.S.), PAREXEL International Corporation (U.S.), Emergo (UL LLC) Bioteknica (U.S.), Accell Clinical Research LLC (U.S.), Genpact (U.S.), Criterium Inc. (U.S.), Promedica International (U.S.), Med Pace (U.S.), ICON PLC (Ireland), IQVIA Inc. (U.S.), Integer Holdings Corp. (U.S.), Tecomet Inc. (Charlesbank Capital Partners LLC) (U.S.), Jabil Inc. (U.S.), FLEX Ltd. (Singapore), Celestica Inc. (Canada), Sanmina Corp. (U.S.), Plexus Corp. (U.S.), Phillips Medisize (Molex, LLC) (U.S.), Cantel Medical Corp. (STERIS PLC) (U.S.), West Pharmaceutical Services Inc. (U.S.) among others.

Recent Market Developments

• October 2022: The reputable U.K. company Eakin Surgical, which is based in Cardiff, South Wales, and manufactures single-use surgical instruments, recently announced that it is expanding its contract manufacturing services to help medical device OEMs cut costs, meet rising sterile packaging demand, and address supply shortages.
• June 2022: To provide a cutting-edge and quick turnaround method for 3D printed medical devices, Belgian contract maker Amnovis and medical device service provider BAAT Medical teamed up.
• July 2022: Materic, a custom manufacturer of unique materials, and Baltimore MD LaunchPort, LLC, a medical device venture center and GMP contract manufacturing operation, have established a cooperation to promote the use of cutting-edge materials in developing cutting-edge medical device technologies.

Segmentation of the Global Medical Device Outsourced Manufacturing Market