Medical Device Contract Manufacturing Market Size, Share, Industry, Forecast and outlook (2024-2031)

Medical Device Contract Manufacturing Market is segmented By Device Type (IVD Diagnostics, Drug Delivery Devices, Diagnostic Imaging Devices, Patient Monitoring Devices, Therapeutic Patient Assistive Devices, Minimally Access Surgical Instruments, Others), By Services (Product Manufacturing and Assembly Services, Quality Management Services, Packaging and Sterilization Services, Regulatory Consulting Services, Product Design & Development Services), By Class of Device (Class II Medical Devices, Class I Medical Devices, Class III Medical Devices), By Region (North America, Europe, South America, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031  

Medical Device Contract Manufacturing Market Overview

[150 Pages Report]The Medical Device Contract Manufacturing Market size was valued at USD 70,739.40 million in 2021 and is estimated to reach a compound annual growth rate (CAGR) of 11.30% over the forecast period 2024 to 2031. The Medical Device Contract Manufacturing Market report analyzes the global market size, shares, recent trends, competitive intelligence, and future market outlook. Medical device contract manufacturing involves outsourcing the production of medical devices to specialized manufacturers. The market is driven by the increasing complexity of medical devices and the need for cost-efficient manufacturing processes. In America, the Medical Device Contract Manufacturing Market is experiencing rapid growth. Key players in the market include Company X, Company Y, Company Z, and other prominent players.

A medical device contract manufacturing is the commercial model in which a medical device company outsources certain or the whole production activities of their whole medical device or certain device components to another company with specialized knowledge, technical expertise, and efficient business operations. The medical device contract manufacturer's (MDCMs) services include product design and development, manufacturing and assembly, quality testing services, packaging and sterilization services, and regulatory consulting services.

Medical Device Contract Manufacturing Market Scope

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Medical Device Contract Manufacturing Market Dynamics

The medical device contract manufacturing market growth is driven due to growing disease prevalence, life expectancy, and the geriatric population. Technological advancement has prompted end users to overhaul or update their manufacturing systems. As this is a costly process, they look to contract manufacturing. Moreover, macroeconomic factors such as an increasingly aging population across the globe paired with the increasing prevalence of non-invasive surgical procedures are driving demand for medical devices and the global medical device contract manufacturing market.  In addition to this, the COVID-19 outbreak has accelerated the adoption of advanced diagnostics and patient care devices for better treatment management.

The impact of Industry 4.0 on the medical devices industry is expected to drive growth in the forecast period

Innovation in Class III medical devices is rising, consequent to the growing development and production of complex products such as pacemakers and implantable medical devices. Medical device companies face challenges in manufacturing Class III devices in high volumes, given the complexity of the assembly and test processes. Furthermore, both the devices and processes must meet regulatory compliance for component traceability and verification, storage, and access. With the complexity involved in producing a Class III device in these volumes, automated production and manufacturing are necessary. As a result, OEMs are leveraging the expertise of electronic manufacturing services, seeking automation, high-quality manufacturing systems, and regulatory compliance.

Industry 4.0 technologies—including cloud computing, machine-to-machine communication, and cyber-physical systems—enable advanced automation that helps overcome these production challenges. These technologies increased connectivity and data-gathering capabilities to build high-volume, regulation-compliant manufacturing processes with efficient inventory and production management.

Governments in several APAC countries are encouraging players to integrate 4.0 in their manufacturing processes to boost technologically advanced medical devices further. For instance, Thailand's 4.0 growth model created an innovative center to increase the development and manufacturing of MedTech devices. The Intellectual Property Innovation-driven Entrepreneurship Center (IP-IDE) maintains its data pool and patent information, further shared with small & medium-sized enterprises (SMEs) to develop newer technologies. With the IP-IDE center, the Thai government aims to encourage Thai medical device companies to innovate and expand across domestic and foreign markets.

With the increasing adoption of Industry 4.0 technologies in manufacturing critical and sophisticated medical devices and enhancing the technology pool that it brings to the table, the medical device outsourced manufacturing market is expected to grow significantly during the forecast period.

Consolidation in the medical devices market is likely to hamper the market growth

Big medical device manufacturers actively invest in acquiring small and medium-sized specialized companies to increase their internal capabilities. This may limit outsourcing to CMOs, given that acquirers will have the capabilities to carry out manufacturing in-house. For example, Linden’s acquisition of AvalignTechnologies Medical in December 2018 provided Linden with expanded opportunities for future growth and greatly added to its capabilities.

Other medical device companies are also acquiring CMOs to decrease their expenses for contract manufacturing. This is leading to a shift in medical device manufacturing.

For instance, in 2017, Nordson (US) acquired Vention Medical’s (US) advanced technology business segment. This segment has expertise in designing, developing, and manufacturing minimally invasive interventional delivery devices, catheters, and advanced components. This development will shift a minute share of medical device manufacturing from CMOs to OEMs.

COVID-19 Impact on Medical Device Contract Manufacturing Market Growth

The COVID-19 pandemic has positively and negatively affected major industries worldwide by disturbing production cycles and supply chains across industries. The medical device industry has faced huge challenges in erasing the pandemic, as the number of infections shows no signs of subsiding. Half of the world is currently facing a second wave of the pandemic. The medical device contract manufacturing market is expected to be impacted by the pandemic as the demand for medical devices for elective procedures has decreased. On the contrary, the demand for medical devices such as ventilators and respirators has risen multifold, increasing the growth prospects for medical device contract manufacturers.

Major players in the market have ensured that there are minimal supply chain disruptions to their clients. To ensure their safety, companies have also implemented more rigorous cleaning and disinfection procedures, enforcing visitor guidance and screening, restricting business travel, and setting up remote working arrangements and strict quarantine measures.

Medical Device Contract Manufacturing Market Segment Analysis

The IVD devices segment is expected to hold the largest share in this market segment

The large share of this segment can be attributed to the increasing volume of IVD tests performed globally, the COVID-19 pandemic, the increasing availability of IVD kits and reagents, the growing number of hospitals & clinical laboratories in developing countries, automation & technological advancements in instruments with high-throughput capabilities, and advances in life sciences research.  In addition, the growing adoption of point-of-care testing coupled with the adoption of fully automated instruments and automation in laboratories is expected to support the growth of IVD devices in years to come.

For instance, On April 11, 2019, to fight against cancer, Sophia Genetics announced the CE-IVD marking of its solid tumors solution (STS), which detects different types of solid tumors such as lung, colorectal, skin, and brain cancers.

Moreover, On November 9, 2019, Lexent Bio signed a partnership with Illumina, Inc. to develop a next-generation sequencing IVD kit to diagnose cancer.

The product manufacturing and assembly services segment is expected to hold the largest share in this market segment

Product manufacturing and assembly services are the most widely applied solutions for medical devices. Outsourcing the manufacture and assembly of medical devices has greatly helped OEMs to manage costs, and save time and effort. These services are growing due to several advantages, including obtaining specialized expertise, increasing time to market, leveraging a strong supply chain, and solving capacity limitations. Services offered through contract manufacturing can resolve quality standards and regulatory compliance, especially in the healthcare and environmental segments.

The class II medical devices segment is expected to hold the largest share in this market segment

The growth of this segment can be attributed to the large number of medical devices that fall under this device class and their greater utilization (compared to other classes) by end-users and caregivers in the healthcare industry. In addition, due to the outbreak of COVID-19, governments minimized the regulatory compliance on these devices and issued Emergency Use Authorizations (EUA) for diagnostics and PPE kits, thereby boosting market growth.

For example, according to the Wheelchair Foundation, there are about 131,800,000 adults or teens globally that have medical conditions requiring the use of a wheelchair. For those with access to an electric wheelchair, the challenges of mobility are virtually eliminated. The electric wheelchair is an example of a Class 2 medical device. Like all medical devices, these devices are regulated by the Federal Drug Administration (FDA) and other standards organizations. These regulations are in place to protect the patient or user from harm when using the device. They also help ensure that the electronics and PCBs' development process adhere to quality and risk management requirements.

Medical Device Contract Manufacturing Market Geographical Share

North American region holds the largest market share of the global medical device contract manufacturing market

North America is expected to be the leading regional market for medical device contract manufacturing during the forecast period, owing to a highly developed healthcare sector, an increase in awareness among healthcare providers about medical devices, and the continuous evolution of advanced medical device products. North America is also an attractive region of the market in terms of revenue. The rise in government initiatives and laws and the increase in population drive the region's medical device contract manufacturing market. For instance, in July 2020, Channel Medsystems announced that it had obtained FDA clearance for its next-generation Cerenecryotherapy product to treat menstrual bleeding. With the COVID-19 pandemic, the company also states that convenient and secure in-office treatment is more vital to patients and gynecologists than ever before.

Medical Device Contract Manufacturing Companies and Competitive Landscape

The global medical device contract manufacturing market is highly competitive with the presence of global companies. Some of the key players which are contributing to the growth of the market include Flextronics International, LTD., Jabil Inc., Benchmark Electronics, Inc., Integer Holdings Corporation (Greatbatch), West Pharmaceutical Services, Inc., Tecomet, Inc., Nortech Systems, TE Connectivity (Creganna Medical), Forefront Medical Technologies, Sanmina Corporation, and Nipro Corporation. The major players are adopting several growth strategies such as product launches, acquisitions, and collaborations, which are contributing to the growth of the market globally. For instance, in January 2019, Venclose Inc and Viant announced a collaboration for the development of Venclose's next-generation Venclose Radiofrequency (RF) ablation catheter.

Medical Device Contract Manufacturing Market Key Companies to Watch

Sanmina Corporation

Overview: Sanmina designs, manufacture, and repairs some of the world's most complex and innovative optical, electronic, and mechanical products. Recognized as a technology leader, they operate in the Electronics Manufacturing Services (EMS) industry and manage operations as two businesses: Integrated Manufacturing Solutions (IMS) and Components, Products, and Services (CPS). They were founded in Silicon Valley in 1980 with Corporate Headquarters in San Jose, California, with approximately 37,000 employees worldwide.

Product Portfolio: The Company provides comprehensive offerings primarily to original equipment manufacturers, or OEMs, in the industries like industrial, medical, defense and aerospace, automotive, communications networks, and cloud solutions.

Key Developments: On November 26, 2019, Sanmina Corporation, a leading integrated manufacturing solutions company, announced that it had achieved the IATF 16949:2016 certification at its manufacturing facility in Chennai, India.