Medical Device Outsourcing Market Size and Share Analysis by Device Type (Class I, Class II, Class III), Application (Orthopedics & Spine, Cardiology, Diagnostic Imaging, In-Vitro Diagnostics, Ophthalmology, Plastic Surgery), Service Type (Quality Assurance, Regulatory Compliance, Design & Development, Testing, Implementation, Upgradation, Maintenance, Contract Manufacturing) – Global Industry Demand Forecast to 2030

Market Overview

The global medical device outsourcing market accounted for the size of $112.1 billion in 2022, and this number is expected to reach $273.0 billion by 2030, advancing at a CAGR of 11.8% during 2022–2030. This can be attributed to the continuous advancements, rise in R&D investment in the healthcare sector, the growth in demand for medical devices, the increase in price competition, the necessity to reduce the cost, and the surging number of CMO/CDMOs across the globe.

Moreover, the ongoing changes in the regulatory landscape, rising aging population, and inclination towards outsourcing services, such as product implementation, quality assurance, and regulatory consulting, are the key factors responsible for the market demand.

Demand for outsourcing of finished goods is increasing across the globe. This can be ascribed to the mushrooming demand for affordable medical products and increasing cost pressures on the manufacturers. Furthermore, the high rate of advancement and innovative technology in the healthcare sector and high investment by players are driving the market growth.

Rising Need for Swift Marketing of Products Drives Growth

Contract manufacturing has become a conventional method for outsourcing medical devices. Although access to cheap labor is often the reason manufacturers outsource production, the prime factor for contract medical product manufacturing is less time taken to market the products. Moreover, outsourcing multiple phases of production to multiple partners reduces the time it takes to develop new products or devices.

Moreover, as the safety and quality of such devices are better to ensure from outside in case of outsourcing, the time taken to bring people and then train them on how to operate is saved. For example, most of the medical device manufacturing equipment are made in Taiwan, China, and Korea. Moreover, instead of bringing equipment to manufacture medical devices or products, it is preferable to outsource production entirely. In addition, engaging full-service contract manufacturers in the design and development phase helps shorten launch timelines.

Class II Generates Majority of Revenue

The class II category accounted for the largest revenue share, around 70%, in 2022 and it will maintain its position in the coming years. This can be attributed to the increasing number of surgical procedures globally. Moreover, the class II medical devices primarily include non-invasive devices, X-ray machines, picture archiving and communication systems (PACSs), infusion pumps, powered wheelchairs, surgical and acupuncture needles, suture materials, and surgical drapes. These products require special labeling, maintenance of performance standards, and post-market surveillance, owing to the design complexity.

In addition, the class I category will have considerable growth in the coming years. This is due to the fact that devices in this category are noninvasive, exempt from regulatory procedures due to low-risk levels, and simple to acquire from the market due to low risk to patients.

Increasing Adherence to Quality Standards Boosts Market

Regulatory process for the commercialization of products has become more intense and stringent, owing to the continuous expansion of the medical device industry. The regulatory compliance outsourcing is gaining acceptance in the global outsourcing market because the providers help medical equipment manufacturing companies to get quick and timely approval/launch of their products with several other advantages, such as reduced cost, more time for the organization’s staff towards core activities, and easy market penetration in other countries.

Cardiology Holds Largest Share Sales

The cardiology category holds largest share in the market. This is owing to the escalating number of cardiovascular disorders, such as myocardial infarction, atrial fibrillation, angina pectoris, rheumatic heart disease, hypertensive heart disease, and congenital heart disease; and growing surgical procedures. Additionally, due to the considerable complexities of cardiovascular devices, surging need for technical expertise, and production of such products may lead to high cost to the OEMs, which results in the higher outsourcing.

The category of plastic surgery is expected to witness fastest growth during the forecast period. This can be ascribed to the increasing number of minimally invasive aesthetic surgeries and burgeoning product portfolio for outsourcing. Additionally, the availability of skilled outsourcing providers that adhere to regulatory criteria and the growing demand for cosmetic procedures are prime factors responsible for the category demand.

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Reduction in Cost of Medical Devices Flourishes Demand

One of the major reasons OEMs prefer outsourcing medical devices is due to the increase in pressure to reduce the cost of products. For instance, key companies are focusing on the effective reuse of technology to ensure low production costs. Most of the OEMs are actively involved with contract manufacturing partners to monitor quarterly cost savings in several areas, such as standard electronic components, custom electronic components, printed circuit board costs, sheet metal/enclosure fabrication costs, box build/systems integration/mechanical assembly work, and contract manufacturer rates for assembly & test.

Contract Manufacturing Category Holds Majority Share

The contract manufacturing category accounted for the largest revenue share, around 30%, in 2022, and it is expected to maintain its position during the forecast period. This is due to the rising need for medical components for numerous applications, growing preference for high-quality and safe equipment for patient care, and mounting need for services, such as laser processing, insert molding, precision grinding, stamping, and milling & turning to design a complete device.

Growing Incidence of Various Health Disorders Propelling Demand

Globally, the incidence of chronic and acute disorders is increasing. Moreover, about 20% to 25% of the adult population suffers from structural heart defects in the U.S. In addition, according to the Heart Failure Society of America around 6.5 million people over the age of 20 have suffered heart failure; it accounts over 8% of all heart disease death in the U.S. Furthermore, around 960,000 new cases of heart failure are diagnosed annually. These statistics clearly highlight the need for affordable cardiac and other treatment devices; thus, providing an impetus to outsource medical devices.

North America Dominates Market

The North American market was the largest contributor, with a revenue share of around 40%, in 2022, and it is predicted to maintain its position during the forecast period. This can be attributed to the widespread usage of cutting-edge technology, the existence of several medical device manufacturers that outsource some of their regulatory and consulting functions to regulatory service providers, increasing minimally invasive and noninvasive procedures, and the rise in capital expenditure on healthcare.

Moreover, the region has strong manufacturing hubs for reliable, complex, and high-end medical equipment. Furthermore, the growing trend of OEMs shifting towards procuring products from electronics manufacturing service providers owing to the increase in the usage of electronic materials in the manufactured products.

Moreover, APAC will register the fastest growth in the market, advancing at a CAGR of around 15% during the coming years. This is due to the rising cases of chronic diseases, growing elderly population, increasing awareness of consumers regarding medical device outsourcing, growing trend of medical tourism, and surging healthcare expenditure. Furthermore, the availability of low-cost labor and less-expensive infrastructure as compared to other developed countries are the factors responsible for this growth. Emerging economies, such as China, India, and South Korea, are majorly contributing to the market owing to the high demand for healthcare services and products.

Moreover, the increasing healthcare expenditure in such economies is creating ample growth opportunities for the market players. Furthermore, the healthcare sector is undergoing rapid changes in these economies due to the snowballing government expenditure, increasing number of hospitals, growing surgeries, rising healthcare awareness, and advancement in reprocessing technologies. Thus, people prefer surgeries and treatment for diagnosed diseases, which will further contribute to the market.

Top Providers of Medical Device Outsourcing Are:

• Flex Ltd.
• Integer Holdings Corporation
• TE Connectivity Ltd.
• Heraeus Group
• Onex Corporation
• IQVIA Inc.
• Sanmina Corporation

Medical Device Outsourcing Market Size Breakdown by Segment

This fully customizable report gives a detailed analysis of the market from 2017 to 2030, based on all the relevant segments and geographies.

Based on Device Type

• Class I
• Class II
• Class III

Based on Application

• Orthopedics & Spine
• Cardiology
• Diagnostic Imaging
• In-Vitro Diagnostics
• Ophthalmology
• Plastic Surgery

Based on Service Type

• Quality Assurance
• Regulatory Compliance
• Design & Development
• Testing
• Implementation
• Upgradation
• Maintenance
• Contract Manufacturing

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • U.K.
  • Italy
  • Spain
• Asia-Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia
• Latin America
  • Brazil
  • Mexico
• Middle East and Africa
  • Saudi Arabia
  • South Africa