Medical Device Outsourcing Market Predicted to Grow at a Moderate Pace Through 2026
Medical device outsourcing market is the phenomenon that emphasize on contracting with third party for product design, manufacturing, packaging, validation, prototyping and verification of medical devices in sterile and controlled environment for supply chain management. Outsourcing not only saves the resources and decreased the operating cost but also offers the opportunities for core activities. Medical device industry has the huge pain point in terms of vendor management and relationships. The medical device outsourcing are mainly controlled by the rising demand for quality of medical products and healthcare services. The manufacturers are looking for the option to outsource their medical device manufacturing processes to the third party medical contract manufacturers, thus the medical device outsourcing market is experienced to grow upward on a global level.
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Medical Device Outsourcing Market – Drivers
Increasing prevalence cardiovascular diseases drives the growth of medical device outsourcing market. According to the American Heart Association, 2016, cardiovascular diseases account for 17.3 million deaths every year globally, where an estimated 23.3 million people are expected to die from CVD by 2030, thus illustrating the rising need to adopt devices. Also, according to American Heart Association, in 2019, 48% i.e. nearly half of all adults in U.S. have some type of cardiovascular diseases.
Moreover, manufacturers are developing well established strategies by undergoing acquisition to become the leading supplier minimally invasive medical device delivery and access devices which serves medical devices original equipment manufacturers (OME). For instance, in 2016, TE Connectivity Ltd., announced that it has entered into the agreement to acquire the Creganna Medical Group. The acquisition of Creganna Medical is a part of well-established strategy to expand the leadership position of TE connectivity in harsh environment. Medical device outsourcing provides the instant insights about health status thereby, providing significant opportunities in improving medical device outsourcing. For instance, the key players in developing countries of Asia Pacific and Latin America produce the considerable increase in the revenue due to the growth in the opportunities which is offered by these regions.
However, the inadequate reimbursement policies and threat of information loss to the original equipment manufacturers (OEM) are some factor that hinder the growth of the market. OEM in medical devices are linked to share the information related to their product, collaboration, agreements and outsourcing to the third party. This will lead to form the data loss or theft which hold the business of OME. Hence, as a means of cost reduction, OMEs are unsure to adopt the medical device outsourcing, which will directly hampers the medical device outsourcing products.
Medical Device Outsourcing Market – Competitive Landscape
Some of the key players operating in the global medical device outsourcing market include Onex Corporation, Cardinal Health, Inc., Integer Holdings Corporation, TE Connectivity Ltd., Flex Ltd., Heraeus Holding GmbH, Plexus Corporation, Sanmina Corporation, West Pharmaceutical Services, Inc.
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Medical Device Outsourcing Market – Market Taxonomy
On the basis of service type, the global medical device outsourcing market is segmented into:
- Quality Assurance
- Regulatory Affairs Services
- Product Design And Development
- Product Testing And Sterilization
- Product Implementation
- Product Upgrade
- Product Maintenance
On the basis of application, the global medical device outsourcing market is segmented into:
- Diagnostic Imaging
- Diabetes Care
Medical Device Outsourcing Market – Regional Insights
On the basis of region, the medical device outsourcing market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East, and Africa. North America holds dominant position in the Medical Device Outsourcing Market, owing to existence of advanced technological electronic sector, large number of medical device manufacturers. Increasing demand for medical devices like wearable devices, owing to increase prevalence of chronic diseases that fuels the regional market growth. According to the National Health Council, 2015, chronic diseases affect over 70 million individuals in the U.S., which accounts for over 75% of the healthcare expenditures equaling to around US$ 2 trillion. Moreover, rising economic burden with increasing incidences of chronic diseases is expected to increase the adoption of medical device outsourcing, in order to efficiently prevent and treat the diseases. According to the Center for Advanced Life Cycle Engineering, University of Maryland, 2015, the treatment expenditure and loss of productivity is projected to be around US$ 790 billion and US$ 3.363 trillion, respectively in the U.S. in 2023.
Asia Pacific is expected to gain the fastest growth in demand for medical device outsourcing during forecast period, as it consists of tax breaks and incentives such as lower tariffs and duties to foreign companies in this nations offer an opportunity for market growth.