Medical Device Outsourcing Market Size, Share & Trends Analysis Report By Services (Quality Assurance, Contract Manufacturing), By Therapeutic Area, By Class, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global medical device outsourcing market was valued at USD 117.5 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 12.1% from 2023 to 2030. Increasing demand for medical devices combined with the rising price competition and requirement to reduce the cost is expected to drive the market during the forecast period. In addition, growing difficulties in product engineering along with the increasing number of new entrants are anticipated to shape the future of the market. The demand for medical devices witnessed a steady rise in recent years. For instance, according to Global Data, in Q2 of 2021, there were 1,103 medical devices in the pipeline, whereas in Q3, it increased by 20.0%. The growing demand for novel technologies and the increasing need to make devices patient-friendly are expected to improve the pipeline of medical devices during the forecast period. Owing to strict regulations by regulatory agencies such as the FDA and EMA, medical device companies outsource their medical dealing needs to streamline the regulatory process.

Thus, this is expected to have a positive impact on the medical device outsourcing market growth in the coming years. During COVID-19, the majority of clinical trials were only focused on treating and diagnosing COVID-19. However, during post pandemic, this trend has been changing. As per the Trial trove, as of January 2022, the majority of trials were conducted for oncology and central nervous system diseases.

Implantable Medical Devices (IMDs) are being used increasingly to improve patients’ medical outcomes. Designers of implantable medical devices have to balance complexity, reliability, power consumption, and costs. Consequently, companies are shifting their focus to innovation rather than non-core activities and therefore outsourcing these activities to launch efficient devices.

Amendments in the ISO standards are expected to boost the demand for quality assurance and regulatory affairs service providers in the U.S. and Europe region as Small- and Medium-sized Enterprises (SMEs) would require third-party assistance to comply with new ISO standards.

Subcontractors and Original Equipment Manufacturers (OEMs) in developed countries like the U.S., Canada, Japan, and the EU countries are expected to adopt these new standards earlier than those in developing countries. However, COVID-19 caused a temporary disruption in the supply chain, which led to shortages and a severe slowing of production. It has stressed the need for scalable manufacturing operations among OEMs, particularly those undertaking production associated to test kits & diagnostic systems. However, the pandemic was a booster for product sterilization services.

Service Insights

The contract manufacturing segment led the market and accounted for more than 54.7% share of the global revenue in 2022. Based on services, the market is segmented into quality assurance services, regulatory affairs services, product design & development services, product testing & sterilization services, product implementation services, product upgrade services, product maintenance services, and contract manufacturing services.

Increasing focus on decreasing the cost of production is augmenting the growth of this segment. In addition, increasing complexity in manufacturing is contributing to market growth. Manufacturing high-quality and safe devices for patient care is a major concern of medical device manufacturers. Also, the high level of inspection in developing medical devices has created layers of standards and regulations. Hence, this is creating demand for manufacturing services.

However, the quality assurance services segment is projected to attain the fastest CAGR growth of 14.4% during the forecast period. The maintenance of an effective quality management system is an integral part of the production of every medical device. One such quality management system is ISO 13485, which involves the development, implementation, and maintenance of the products intended for use by medical device manufacturers and suppliers. Medical device manufacturers are outsourcing quality management services to medical device consulting companies to ensure compliance and provide high-quality components alongside safe and effective finished medical devices.

Application Insights

The cardiology segment accounted for the maximum share of 20.8% in 2022 and is likely to remain dominant throughout the forecast period. Based on the application, the market is segmented into cardiology, diagnostic Imaging, orthopedic, IVD, ophthalmic, general & plastic surgery, drug delivery, dental, endoscopy, diabetes care, and others. According to WHO, 17.9 billion people died due to cardiovascular disease in 2019, representing 32% of all global deaths.

This is due to the high prevalence of conditions, such as angina pectoris, myocardial infarction, hypertensive heart disease, rheumatic heart disease, atrial fibrillation, and congenital heart disease. The high prevalence of CVDs globally is increasing the demand for cardiovascular devices.

Moreover, the high complexity of cardiovascular devices and the need for technical expertise, and manufacturing of these devices may also lead to the high cost to the OEMs, which is likely to result in the higher outsourcing of these devices.

General and plastic surgery device outsourcing is anticipated to exhibit the fastest CAGR growth of 13.6% from 2023 to 2030. The availability of competent outsourcing firms, which comply with the regulatory requirements, and the rising demand for cosmetic surgeries are the factors expected to contribute to the growth of this segment. The awareness and consciousness about physical appearance have significantly increased in recent years, which has increased the demand for cosmetic surgeries, globally.

Surgical devices like fixation devices, extremity splints, and epilators require specialized molding and machining processes, which increases the demand for outsourcing these devices. The introduction of minimally invasive and noninvasive surgeries has led to a rise in the number of surgeries performed in a year. This calls for innovative and procedure-specific devices.

Class Insights

Class II type medical devices accounted for the largest market share of 66.0% in 2022 and the segment is expected to register the fastest CAGR of 12.3% over the forecast period owing to the high cost of medical devices, and almost 43.0% of the medical devices fall under this category. Based on the class type, the medical device outsourcing market is segmented into Class I, Class II & Class III.

Class II includes catheters, syringes, surgical gloves, blood pressure cuffs, pregnancy test kits, contact lenses, and blood transfusion kits. These devices have a higher risk involved than Class I devices as these are to be in continuous contact with patients.

Class I type medical devices are also anticipated to register significant growth during the forecast period. These devices are noninvasive. Currently, 47.0% of the devices fall under this category and 95.0% of the devices in this category are exempt from regulatory procedures due to low-risk levels. Class I devices are the easiest and fastest to purchase from the market due to the low risk to the patient and rarely provide critical to life-sustaining care. The majority of Class I devices are exempt from FDA's premarket notification (510k) and Premarket Approval Requirements (PMA).

Regional Insights

Asia Pacific dominated the global market in 2022 with the largest revenue share of 41.7%. The presence of market players and competitive pricing are the other supporting factors that are anticipated to drive this regional market. Also, the increasing demand for medical devices owing to the growing patient population suffering from chronic and infectious diseases is fueling the market growth in this region. For instance, during the first wave of COVID-19, there was a growing demand for CT scanners in India to detect pneumonia.

North America is also anticipated to register significant growth during the forecast period. This is owing to the well-established manufacturing hubs for high-end, consistent, and complex medical devices. Also, the existence of the technologically advanced electronic sector is helping North America edge over other regions. This region is also home to numerous medical device companies, which are outsourcing part of their regulatory and consulting functions to regulatory service providers, thereby contributing to the growth of the regional market.

Key Companies & Market Share Insights

Many new companies are anticipated to venture into this space due to the increasing demand for medical devices around the globe. This is projected to boost the competition level in the global arena. In addition, collaborations among existing players and niche service offerings to boost quality are likely to fuel the market growth during the forecast period.

Established players in the market are expected to broaden their portfolio and provide one-stop solutions to withstand aggressive competition. For instance, in January 2021, SGS SA received the FDA approval to participate & provide services for third-party 510(k) premarket submissions for medical devices. Market players are also adopting the strategy of acquisition to enhance their service portfolio.

For instance, in December 2021, the life sciences company, Laboratory Corporation of America Holdings, acquired a CRO, Toxikon Inc., to expand its offerings by providing testing services for medical devices, pharmaceuticals, and other industries. Also, during the pandemic, players continued to work hard to serve the industry since the beginning of COVID-19.

For instance, in April 2020, Eurofins announced that its laboratories in Europe, U.S., and Asia are providing worldwide service offering for inspection, testing, and regulatory services focused on medical gowns, gloves, & face masks along with respiratory protective devices & equipment, its component & materials to serve the mounting demand due to the pandemic. Some of the prominent players in the global medical device outsourcing market include:

• SGS SA

• Laboratory Corporation of America Holdings

• Euro fins Scientific

• Pace Analytical Services, Inc.

• Intertek Group plc

• WuXiAppTec

• North American Science Associates, LLC

• TÜV SÜD

• Sterigenics U.S., LLC (GTCR, LLC)

• Charles River Laboratories

• Medical Device Testing Services (Element Minnetonka)

• RJR Consulting, Inc.

• Mandala International

• Freyr

• Global Regulatory Partners

• PAREXEL International Corporation (EQT Private Equity and Goldman Sachs Asset Management)

• Emergo (UL LLC)

• Bioteknica

• Accell Clinical Research, LLC

• Genpact

• Criterium, Inc.

• Promedica International

• Med pace

• ICON plc.

• IQVIA Inc.

• Integer Holdings Corporation

• Tecomet Inc. (Charles bank Capital Partners, LLC)

• Jabil Inc.

• FLEX LTD.

• Celestica Inc.

• Sanmina Corporation

• Plexus Corp.

• Phillips Medisize (Molex, LLC)

• Cantel Medical Corp. (STERIS plc)

• West Pharmaceutical Services, Inc.

Medical Device Outsourcing Market Report Scope

Global Medical Device Outsourcing Market Segmentation

This report forecasts revenue growth at global, regional & country levels and provides an analysis on the industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global Medical Device Outsourcing Market based on the service, application, class, and region:

• Service Outlook (Revenue, USD Million, 2018 - 2030)

  • Quality Assurance

  • Regulatory Affairs Services

    • Clinical trials applications and product registrations

    • Regulatory writing and publishing

    • Legal representation

    • Other

  • Product Design and Development Services

    • Designing & Engineering

    • Machining

    • Molding

    • Packaging

  • Product Testing & Sterilization Services

  • Product Implementation Services

  • Product Upgrade Services

  • Product Maintenance Services

  • Contract Manufacturing

    • Accessories Manufacturing

    • Assembly Manufacturing

    • Component Manufacturing

    • Device Manufacturing

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Cardiology

    • Class I

    • Class II

    • Class III

  • Diagnostic imaging

    • Class I

    • Class II

    • Class III

  • Orthopedic

    • Class I

    • Class II

    • Class III

  • IVD

    • Class I

    • Class II

    • Class III

  • Ophthalmic

    • Class I

    • Class II

    • Class III

  • General and plastic surgery

    • Class I

    • Class II

    • Class III

  • Drug delivery

    • Class I

    • Class II

    • Class III

  • Dental

    • Class I

    • Class II

    • Class III

  • Endoscopy

    • Class I

    • Class II

    • Class III

  • Diabetes care

    • Class I

    • Class II

    • Class III

  • Others

    • Class I

    • Class II

    • Class III

• Class Outlook (Revenue USD Million, 2018 - 2030)

  • Class I

  • Class II

  • Class III

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Switzerland

    • Netherlands

    • Sweden

    • Belgium

    • Russia

  • Asia Pacific

    • Japan

    • China

    • India

    • Australia

    • South Korea

    • Singapore

    • Malaysia

    • Thailand

    • Taiwan

    • Indonesia

    • Philippines

  • Latin America

    • Brazil

    • Mexico

    • Argentina

    • Colombia

    • Chile

  • Middle East and Africa (MEA)

    • South Africa

    • Saudi Arabia

    • Israel

    • UAE

    • Egypt