Medical Device Outsourcing Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2025 - 2032)

Medical Device Outsourcing Market Trends and Growth Drivers

Rising Need for Swift Marketing of Products Is Major Trend

• 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.

Need for Reduction in Cost of Medical Devices Drives Market

• 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.

Emerging Economies Offer Opportunities

• Multiple international medical device companies choose to source or manufacture their devices in emerging nations such as Asia, owing to several factors such as labor costs.
• For instance, labor costs have risen significantly in China. However, they are still low in Vietnam, India, and Indonesia.
• Moreover, overhead for rent, utilities, medical device components, raw materials, and equipment is often much cheaper in these regions.
• Asia is known for manufacturing low-end medical device products such as drainage bags, surgical tape, and rubber gloves, which has changed gradually.
• Many manufacturers in Asia now produce sophisticated Class III medical devices such as drug-eluting stents.
• Another cost advantage to sourcing in Asia is the rise of special economic and free trade zones, which aims at promoting foreign investment.
• For example, Shanghai’s Waigaoqiao Free Trade Zone offers tax breaks and incentives such as lowered tariffs & duties to foreign companies willing to set up their business there.

Medical Device Outsourcing Market Analysis

Device Type Insights

The class II category accounted for the largest revenue share, of 70%, in 2024, 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.

The class III category is expected to see the fastest growth during the forecast period. This is due to the rising demand for implantable devices, such as pacemakers, implantable cardioverter defibrillators, osseointegration implants, conventional bone implants, and breast implants.

These device types are covered:

• Class I
• Class II (Largest Category)
• Class III (Fastest-Growing Category)

Application Insights

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. As per a study, more than 3.5 million pacemakers are implanted around the world every year. Moreover, as per the University of Cambridge, the number of people who need an artificial heart valve during any given year is at least 1.5 million, globally. Additionally, due to the considerable complexity 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, at 13% CAGR. This can be ascribed to the increasing number of minimally invasive aesthetic surgeries and burgeoning product portfolio for outsourcing. As per the International Society of Aesthetic Plastic Surgery, 1,892,777 breast augmentation procedures were performed worldwide in 2023. 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.

These applications are covered:

• Orthopedics & Spine
• Cardiology (Largest Category)
• Diagnostic Imaging
• In-Vitro Diagnostics
• Ophthalmology
• Plastic Surgery (Fastest-Growing Category)
• Others

Service Type Insights

The contract manufacturing category accounted for the largest revenue share, of 30%, in 2024, 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.

The regulatory compliance category is set to witness the fastest growth during the forecast period. The regulatory process for the commercialization of products has become more intense and stringent owing to the continuous expansion of the medical device industry. Thus, regulatory compliance outsourcing is gaining acceptance because service 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.

These service types are covered:

• Quality Assurance
• Regulatory Compliance (Fastest-Growing Category)
• Design & Development
• Testing
• Implementation
• Upgradation
• Maintenance
• Contract Manufacturing (Largest Category)
• Others

Medical Device Outsourcing Market Geographical Outlook

The North American market was the largest contributor, with a revenue share of around 40%, in 2024, 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.

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.

Moreover, APAC will register the fastest growth in the market, advancing at a CAGR of 14% 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.

The regions and countries analyzed for this report include:

• North America (Largest Regional Market
  • U.S. (Larger Country Market)
  • Canada (Faster-Growing Country Market)
• Europe
  • Germany (Largest Country Market)
  • U.K.
  • France (Fastest-Growing Country Market)
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa
  • U.A.E. (Fastest-Growing Country Market)
  • Rest of MEA

Medical Device Outsourcing Market Share

• The market is consolidated as developing medical devices is a cost-intensive and technically challenging process, right from R&D to prototype production to clinical trials and marketing approval.
• Therefore, only a handful of independent service providers with ample expertise in the field exist.
• Moreover, they have to take care of compliance with the regulations of different countries and not just the one they are manufacturing in.
• Additionally, since companies that outsource various aspects of the process are themselves well-known medical device manufacturers, they scrutinize the service provider on several parameters before outsourcing.
• They not only have a reputation to protect but also people’s safety, as non-compliance can cost them millions of dollars since the product is still marketed under their brand.

Medical Device Outsourcing Market News

• In February 2025, EquipX announced that it will integrate its cloud-based Vizient analytics software with the expertise of Vizient in performance improvement to simply the acquisition, operation, and maintenance of laboratory equipment, imaging systems, and surgical robots.
• In January 2025, TekniPlex Healthcare selected David Schnur Associates to market, sell, and provide design & development services for the former’s interventional devices, including implantable, in North America, Europe, Latin America, Turkey, and Israel.
• In September 2024, Integer Holdings Corporation announced two facility expansion projects in Ireland. The first was a capacity expansion of its medical device development and manufacturing center in Galway’s Parkmore East area by 67,000 square feet, at a cost of USD 30 million, while the other was 80,000-square-foot expansion of its factory in New Ross, County Wexford, with an investment of USD 60 million.
• In September 2024, TE Connectivity Ltd. announced that it has completed the process of shifting its incorporation place to Ireland from Switzerland.