Increasing demand for medical devices combined with rising price competition and the requirement to reduce cost, high prevalence of chronic disorders, availability of low-cost labor and comparative less expensive infrastructure cost are key factors contributing to high CAGR during the forecast period.
According to the current analysis of Reports and Data, the global medical device outsourcing market was valued at USD 106.40 Billion in 2019 and is expected to reach USD 229.40 Billion by the year 2027, at a CAGR of 10.1%. Medical devices outsourcing is the process of contracting a third party for business purposes, which includes manufacturing, product designing, prototyping, and supply chain management. This process enables the original equipment manufacturers to reduce the labor cost and production time-scale, thus increasing its demand in the market. Outsourcing mainly allows companies to focus on core activities, which results in industrial development. However, the threat of loss of confidential information is expected to dampen industrial growth.
Regulatory bodies emphasize on the quality of the healthcare devices provided to the public, encouraging industry players to offer various services like regulatory consulting. The budget scrutiny in developed countries, pricing pressure, and changes in reimbursement schemes are some of the major factors which help to increase the adoption of cost containment measures by the Original Equipment Manufacturers and thus is expected to boost this industryto emerging countries like India and China. More focus on research and development is one of the key growth models that companies receiving outsourced services in the global medical devices outsourcing industry are employing for business development. The threat of loss of confidential information and inadequate reimbursement policies can be a restraint to this industry.
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The World Health Organization (WHO) declared the severe acute respiratory syndrome novel coronavirus 2 (SARS-CoV-2) outbreak in Wuhan, China, as a worldwide pandemic in December 2019. SARS-CoV-2 infection is classified as a novel coronavirus disease by the WHO. COVID-19 has infected more than 150 million people worldwide, resulting in more than 3 million deaths. COVID-19 has had a big influence on the healthcare business, causing major disruptions throughout the supply chain, from raw materials to manufacture and delivery. The global demand for medical ventilators has prompted manufacturers to increase demand by up to 40% to 50%. Producers have also collaborated in order to meet rising demand. Governments and a variety of organisations, as well as other industry personnel, are all working hard to address the global problem. Leading personnel are active in research and development operations, strategic alliances and collaborations, and creative product releases in order to meet consumer demands for pharmaceuticals, vaccines, diagnostics, and medical equipment such as ventilators. Without a doubt, this is the first time in contemporary history that the diagnostics industry has been given such prominence. Participants in the healthcare business have abruptly shifted from under the carpet to above the carpet's demand. The world has acknowledged the necessity for early warning systems in the healthcare sector, currently for COVID-19, but this pattern will continue in the future for other sorts of diagnostics.
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Key Players covered in this report are
Product (Revenue, USD Million; 2017–2027)
- Finished goods
- Raw Materials
Devices (Revenue, USD Million; 2017–2027)
- Class I Devices
- Class II Devices
- Class III Devices
Application (Revenue, USD Million; 2017–2027)
- Diagnostic imaging
- General and plastic surgery
- Drug delivery
- Diabetes care
Services (Revenue, USD Million; 2017–2027)
- Contract manufacturing
- Quality Assurance
- Regulatory Affairs Services
- Product Design and Development Services
- Product Testing Sterilization Services
- Product Implementation Services
- Product Upgrade Services
- Product Maintenance Services
Based on Region market is segmented into:
- North America
- South America
- Middle East Africa
Further key findings from the report suggest
- In August 2016, Cirtec Medical completed the acquisition of Stellar Technologies, Inc., a healthcare machining and component manufacturer, based in Minnesota, the U.S. The acquisition was made to enhance the technology, specifically for the customers in the high-growth neuromodulation industry.
- The major factor leading to the growth of the medical device outsourcing industry is the need to curb the rising cost of medical equipment and high-quality products that clears the stringent regulatory requirements.
- The geriatric population is more prone to chronic and age-related diseases as well as musculoskeletal injuries, hence the considerable increase in geriatric population is creating demand for medical device outsourcing products.
- The medical device outsourcing market has shown growth by Class II equipment that primarily includes non-invasive and include x-ray machines, PACS, infusion pumps, powered wheelchairs, surgical needles, and suture material, surgical drapes, and acupuncture needles.
- The landscape of manufacturing has rapidly changed over the past few years, as major OEMs have combined complementary skills to gain greater market share. OEMs are choosing to outsource technical and production services to trusted partners to reduce their manufacturing footprint. Outsourcing the production of various allows manufacturers to be more dynamic and cost-effective in their production.
- Contract manufacturing led the service segment in 2019 owing to the growing trend of outsourcing by OEM to third-party manufacturers, especially in emerging countries.
- Based on service, Quality assurance is projected to exhibit the fastest CAGR of 12.5% over the forecast period.
- In the longâ€�term, firms expect growth opportunities to be driven by aging populations around the world. This fundamental change in population demographics will increase the need for healthcare and healthcare-related procedures, as people are living longer and are demanding a higher quality of life. Furthermore, although overall growth in more established markets in the U.S. and Europe has slowed, the emerging 'BRIC' countries of Brazil, Russia, India and China, and their growing numbers of middleâ€�class, are now ramping up demand for medâ€�tech products and services. All of these factors are contributing to a positive outlook for the medical device outsourcing industry.
- Asia Pacific region is showing the fastest growing segment, which is expected to reach 42.8 billion in 2027 with CAGR of 9.9% due to lower cost and increased availability of skilled human resources.
- Product testing and sterilization are valued at 11.9 billion in 2019 and expected to reach 24.7 billion in 2027.
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