19 February 2019, The global medical device outsourcing market is expected to witness robust growth in coming years owing to increasing in the number of companies manufacturing medical equipment. Companies are producing such devices at lower costs in order to gain competitive edge in the market. Outsourcing of such equipment to third party manufacturers helps in reducing operational and overhead expenses for original equipment manufacturers (OEMs). It also reduces production time and allows early availability of equipment in the market. Hence, most of the OEMs outsource such equipment to provide affordable healthcare equipment and maintain quality of healthcare services.
Availability of quality medical devices has resulted in increase in demand for affordable healthcare services among patients. Rising cases of chronic health problems, such as diabetes and cancer, are expected to increase demand for medical equipment. Integration of information technology into medical equipment can also compel OEMs to outsource production of technologically advanced equipment. For instance, Cytori Therapeutics, Inc., a leading pharmaceutical company of United States, recently announced that it has successfully outsourced an essential assembly portion of production process to Viant Medical. The company has received approval for the celution cell therapy system consumables.
Growing health problems, such as diabetes, arthritis, and respiratory issues, among geriatric population is a key driving factor in the market. This has resulted in increased requirement of regular body diagnosis in order to avoid major health issues. Complex diagnostic tests are expected to fuel demand for technologically advanced and affordable devices offering quick and accurate results. Rising demand for quality healthcare equipment can impel OEMs to outsource their production processes to third party manufacturers. For instance, emerging market players are outsourcing designing of medical devices in order to meet consumer demand. Stringent regulatory policies to maintain quality of devices are also likely to boost the market growth in the forthcoming years.
However, threat of information loss and lack of reimbursement policies can hamper market growth in the coming years. OEMs are likely to share sensitive information related to collaboration, product, and agreements to third party vendors while outsourcing. This may, in turn, result in theft or loss of crucial information, which could further have an impact on businesses of OEMs. Reduction in adoption of medical device outsourcing among OEMs is likely to hinder the market growth.
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The market can be segregated on the basis of services, product, device type, application, and region. Based on product, the market can be categorized into electronics, raw materials, and finished goods. Major device types in the market include class 1, class 2, and class 3. Leading applications in the market might include Radiology, cardiovascular, orthopedic, and general medical devices. Finished device manufacturing, prototype development, assembly and packaging, and testing and regulatory support are the major services offered in the market.
Asia Pacific is a leading region in the market owing to availability of cheap infrastructure and labor in countries, such as India, China, and Japan. Rising cases of chronic disorders, such as cardiovascular disorders and cancer, is anticipated to propel demand for affordable medical equipment. In addition, improvement in technical knowledge and low overhead costs are expected to drive the regional market growth. Streamlining of manufacturing processes as per ISO standards by local manufacturers and service providers is also likely to gain traction among major companies, such as Boston Scientific and Johnson & Johnson.
North America is a prominent region in the market owing to presence of manufacturing companies offering high-quality and reliable medical devices. Growing need for advanced equipment to offer quality healthcare services is also likely to augment outsourcing activities in the region. Increasing number of mergers and acquisitions among OEMs and electronic manufacturing service providers can further boost the market growth. For instance, GE Healthcare, a leading manufacturing company of medical equipment and diagnostic products, recently acquired Novia Strategies, Inc., to order to expand its healthcare consulting business in United States. The company’s aim is to provide outcomes-based solutions, help healthcare organizations to meet demand for enhanced product quality, and reduce healthcare costs for patients.
Some of the leading companies operating in the medical device outsourcing market are Heraeus Holding, Creganna, Integer Holdings Corporation, Flextronics International Limited, and Sanmina Corporation.
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