Global Medical Devices Contract Manufacturing Market Size, Segmentation, Trends and Growth Analysis Forecast by 2030

Medical Devices Contract Manufacturing Market Overview and Analysis:

As of 2022, the global market size for medical device contract manufacturing stood at USD 70.01 billion, with expectations of a robust compound annual growth rate (CAGR) of 12.1% from 2023 to 2030.

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Medical device contract manufacturing involves the delegation of tasks such as design, development, manufacturing, assembly, and testing of medical devices to external entities or contract manufacturers. Under this arrangement, original equipment manufacturers (OEMs) or medical device companies collaborate with specialized contract manufacturers, drawing upon their expertise, facilities, and resources to bring medical devices to market.

The specialization of many contract manufacturers in particular types of devices or manufacturing processes allows OEMs to benefit from precision and quality in the production of their devices. Moreover, outsourcing to specialized facilities frequently results in cost savings for OEMs, as contract manufacturers often possess economies of scale, efficient production processes, and well-established supply chain networks that contribute to overall cost-effectiveness.

Medical Devices Contract Manufacturing Market Trends:

The medical device industry is witnessing rapid technological advancements, and contract manufacturers are leveraging innovations such as additive manufacturing, robotics, and smart technologies to enhance precision and efficiency in production. The trend of outsourcing medical device manufacturing is growing as more original equipment manufacturers (OEMs) recognize the benefits of collaborating with specialized contract manufacturers. This allows OEMs to focus on core competencies like research, development, and marketing. Contract manufacturing firms are forming strategic partnerships and engaging in mergers and acquisitions to expand their service offerings, increase their global footprint, and enhance their capabilities. These collaborations aim to create synergies and strengthen the overall competitiveness of the market. Thus, these market trends are expected to drive the growth of the studied market over the forecast period.

Market Segmentation: The Medical Device Contract Manufacturing Market is Segmented by Device (IVD Devices, Diagnostic Imaging Devices, Cardiovascular Devices, Drug Delivery Devices, Endoscopy Devices, Ophthalmology Devices, Orthopedic Devices, Dental Devices and Other Devices), Service (Device Development and Manufacturing Service, Quality Management Service and Assembly Service) and Geography (North America, Europe, Asia-Pacific, Middle East and Africa, and South America). The report offers the value (USD million) for all the above segments.

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Market Drivers:

Outsourcing for Cost Efficiency

A key catalyst propelling the medical device contract manufacturing market is the pursuit of enhanced cost efficiency. Delegating the manufacturing processes to specialized contract manufacturers offers medical device companies advantages such as economies of scale, reduced labor costs, and shared infrastructure. Contract manufacturers excel in optimizing production procedures and streamlining supply chain management, yielding considerable cost savings for original equipment manufacturers (OEMs).

In the highly competitive medical device industry, where cost-effective production is paramount for market success, outsourcing to contract manufacturers becomes a strategic imperative. The expanding medical device market serves as a pivotal driver for the industry's growth. For instance, the World Health Organization's 2022 update highlights approximately 2 million medical device varieties across over 7000 generic device groups. Additionally, in June 2021, Rosti Romania secured a new contract for its medical device manufacturing facility, underscoring the global uptrend in the demand for contract manufacturing services. Furthermore, some companies lack in-house capabilities for medical device manufacturing, further fueling the growth of the contract manufacturing market.

Access to Specialized Expertise and Technologies

Numerous medical device companies find themselves without specific specialized expertise or access to advanced technologies necessary for certain aspects of device manufacturing. Contract manufacturing emerges as a viable solution, providing these companies with entry to the specialized knowledge and cutting-edge technologies offered by contract manufacturing partners. This becomes especially pertinent in industries where technological advancements occur rapidly, and maintaining a position at the forefront of innovation is imperative. Through collaboration with contract manufacturers, medical device companies can harness the expertise and capabilities of these specialized partners without necessitating substantial internal investments in equipment, technology, or training.

Initiatives aimed at expanding the use of medical devices further underscore the significance of such collaborations. In October 2021, the Indian government, for example, revealed plans to formulate a new bill encompassing drugs, cosmetics, and medical devices to enhance the global market acceptability of medical devices. Additionally, SpinaFX Medical Inc. reported entering into a commercialization contract manufacturing agreement with StarFish Product Engineering Inc. in October 2021, signifying a strategic move within Canada's largest medical device design, development, and manufacturing services organization.

Market Restraints:

Strict Regulatory Standards and Quality Assurance Requirements

The medical device industry is subject to strict regulatory standards and quality assurance requirements. Contract manufacturers must adhere to these regulations to ensure the safety and efficacy of medical devices. Navigating complex and evolving regulatory landscapes can be challenging, and compliance failures can lead to delays in production and additional costs. Both original equipment manufacturers (OEMs) and contract manufacturers need to invest time and resources to stay abreast of regulatory changes and maintain compliance. Intellectual property (IP) protection is a significant concern in the medical device contract manufacturing landscape. When outsourcing manufacturing processes, OEMs may share proprietary information and technologies with contract manufacturers. Protecting intellectual property and ensuring confidentiality is a complex challenge. OEMs must carefully manage contracts, employ robust confidentiality agreements, and implement measures to safeguard their proprietary information. The risk of IP leakage or unauthorized use poses a restraint on some companies considering contract manufacturing.

COVID-19 Impact on Medical Devices Contract Manufacturing Market:

The pandemic has disrupted global supply chains, affecting the procurement of raw materials, components, and other resources needed for medical device manufacturing. Lockdowns, travel restrictions, and logistical challenges have led to delays and shortages, impacting the production capabilities of contract manufacturers. Many medical device contract manufacturing facilities experienced production slowdowns or temporary shutdowns due to lockdown measures, workforce limitations, and health and safety considerations. This resulted in delays in fulfilling orders and contributed to a backlog in production schedules. As of October 2020, Relay Medical Corp. and Fio Corporation, in collaboration with Fidonet Rapid Response Group, announced their partnership with the U.S.-based FDA-approved contract manufacturer, KeyTronic. The aim was to produce the Fionet pandemic response devices, leveraging KeyTronic's turnkey services and global capabilities. Notably, Relay Medical Corp. has been actively involved in manufacturing COVID-19-related medical devices. Furthermore, according to an October 2020 update from the National Institutes of Health (NIH), the organization is engaged in a collaborative effort with the Biomedical Advanced Research and Development Authority (BARDA). This collaboration includes the third round of contract awards focused on scaling up and manufacturing new COVID-19 testing technologies. These instances underscore the positive impact of the COVID-19 pandemic on driving growth within the medical device contract manufacturing market.

Segmental Analysis:

IVD Devices Segment is Expected to Witness Significant growth over the Forecast Period

The IVD devices segment is poised to claim a substantial market share, driven by several factors. The increasing number of hospitals in developing countries, the ongoing development of healthcare infrastructure, a global rise in IVD test volumes, and the prevalence of chronic diseases collectively contribute to the prominence of this segment. In vitro diagnostic medical devices encompass a wide array of tests conducted on biological samples to ascertain an individual's health status. Ranging from self-tests for pregnancy to sophisticated diagnoses performed in clinical laboratories, IVDs play a pivotal role in modern healthcare. The adoption of IVD devices is on the rise in medical facilities, with end users exhibiting a higher rate of acceptance. The growth of the segment is further propelled by the demand for point-of-care devices, offering capabilities in monitoring, diagnosing, and preventing diseases. The market for IVD devices is anticipated to flourish, driven by an escalating demand for personalized, advanced, and rapid diagnostic solutions.

Device Development Segment is Expected to Witness Significant growth over the Forecast Period

Device development in the medical industry involves the design, creation, and production of a wide range of innovative and life-enhancing medical devices. From diagnostic tools to therapeutic instruments, the process of bringing a medical device to market is intricate and necessitates a comprehensive approach. Medical device contract manufacturing plays a pivotal role in this journey, offering specialized services to bring these devices from concept to reality. This symbiotic relationship between device development and contract manufacturing is crucial for fostering innovation, ensuring quality, and meeting the diverse needs of the healthcare sector. Device development typically begins with conceptualization, where ideas are transformed into design concepts. The design phase involves creating detailed specifications and prototypes, considering factors such as functionality, user experience, and regulatory compliance. Thus, owinng to such advatnges, the segment is expected to witness significant growth over the forecast period.

North America Region is Expected to Witness Significant growth over the Forecast Period

In North America, particularly the United States, a substantial market share has been maintained, driven by factors such as increasing healthcare expenditure, the prevalence of chronic disorders, and the strong presence of key market players. For example, based on a February 2022 update from the Centers for Disease Control and Prevention (CDC), 4.6% of adults in 2020 had been diagnosed with coronary heart disease. Furthermore, according to 2020 statistics from the National Cancer Institute (NCI), an estimated 1,806,590 cancer cases were diagnosed in the United States in 2020, with the number of cancer survivors projected to reach 2.2 million by 2030. The rising burden of chronic diseases is fueling substantial demand for medical devices employed in the diagnosis and treatment of such conditions, consequently driving the need for contract manufacturing services.

Additionally, market growth is bolstered by strategic initiatives from industry players. In September 2021, TE Connectivity, a global leader in connectors and sensors, bolstered its position by acquiring three companies specializing in microfluidic cartridge and blister reagent package development, usability testing, clinical research, and manufacturing. One of these acquisitions includes Toolbox Medical Innovations, based in Carlsbad, California, USA, offering services for the development and manufacturing of Point of Care IVD products. Consequently, the market is poised for significant growth during the forecast period due to these noteworthy developments. Thus, the region is expected to witness significant growth over the forecast period.

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Competitive Landscape:

The medical device contract manufacturing market is moderately competitive and consists of several significant players. In terms of market share, a few major players dominate the market. And some prominent players are vigorously making acquisitions of other companies to consolidate their global market positions. Some companies currently dominating the market are:

• Jabil Inc.
• Synecco
• Gerresheimer A
• Celestica Inc.
• Nordson Corporation
• Teleflex Incorporated
• Integer Holdings Corporation
• Nipro Corporation
• SteriPack Group Ltd
• TE Connectivity Ltd
• Celestica International
• Nortech Systems, Inc.
• Invetech
• Biofortuna Limited

Recent Developments:

1) In June 2022, Belgian contract manufacturer Amnovis and medical device service provider BAAT Medical teamed up to offer an innovative and rapid turnaround process for 3D printed medical devices.

2) In May 2022, Biomerics, one of the leading vertically integrated medical device contract manufacturers serving the interventional device market, opened a 2,000 sq. ft. balloon and balloon catheter center of excellence in Galway. This is Biomerics' first facility in Europe and the second facility outside the United States after Costa Rica.

Frequently Asked Questions (FAQ) :

Q1. What was the Medical Devices Contract Manufacturing Market size in 2022?

Q2. At what CAGR is the Medical Devices Contract Manufacturing Market projected to grow within the forecast period?

Q3. Which Region is expected to hold the highest Market share?

Q4. Who are the key players in Medical Devices Contract Manufacturing Market?