Global Medical
Device Outsourcing Market Will
Grow To Over $12 Billion By 2018
According to Millennium Research
Group (MRG), the global authority on medical technology market intelligence,
medical device brand owners in many countries are facing increasing budgetary
pressures due to factors such as the ongoing debt crisis in Europe and the
implementation of the medical device excise tax in the United States. As a
result, there will be rising demand for medical device outsourcing and contract
manufacturers (CMs) as brand owners aim to cut down on production costs,
particularly for high-volume and low-margin devices such as endoscopes and
surgical instrumentation.
Additionally, some brand owners,
especially small and midsize companies, work with CMs when they are looking to
launch new products but do not have the resources for large-scale manufacturing.
As a result, the penetration of medical device outsourcing is fairly high in the
spinal implant market, in which many smaller companies with innovative products
compete.
“Rising interest in emerging
markets, such as in Brazil, India and China, is also greatly impacting medical
device outsourcing,” said MRG Analyst Julia Wall. “Working with local CMs can
help foreign brand owners avoid high import and shipping costs. They can also
more easily navigate local regulations and distribution networks.”
Despite the benefits of working
with local CMs, brand owners do face some risks. For example, there have been
recent controversies surrounding product recalls of devices produced from
offshore manufacturing. Consequently, there has been somewhat of a shift back to
US-based manufacturing due to concerns regarding quality control.
Another trend in the medical
device outsourcing market is the increasingly collaborative and long-term
relationship between brand owners and CMs. Building an established partnership
encourages accountability and helps the CM become more invested in the design
process. Brand owners are thus working with CMs earlier in the design process to
optimize and streamline manufacturing processes. In addition, more brand owners
prefer working with fewer CMs to better manage quality control. In response, CMs
are broadening their range of products and services through acquisitions of
smaller CMs and organic growth to address the increasingly diverse needs of
brand owners.
(Ref:
http://www.mrg.net/News-and-Events/Press-Releases/Global-Medical-Device-1-14-2014.aspx
)
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