Cleveland, Ohio – Medical devices manufacturers are likely to adopt outsourcing as a feasible sustainability measure because of the increasingly complicating reimbursement framework and the patients focusing on the value for money. Stern government rules, such as enforcing additional excise duty on medical devices, are also estimated to trigger the growth of the market by encouraging manufacturers to reduce production costs through outsourcing.
Driven by increasing demand for quality health care services, heightening pressure to reduce production costs, and constant developments in the area of medical and health care technology, the global medical devices outsourcing market is poised to expand at a CAGR of 11.6% during the period of 2012-2018. Spending cuts by major health care enterprises is mounting pressure on the manufacturers of medical devices and equipment.
The oligopolistic nature of the medical devices outsourcing market coupled with the increasing level of awareness in consumers, has compelled manufacturers to hold on to business strategies of continuous research and development investment and introduce of innovative products in the market. These activities increase the expenses of the manufacturers to a large extent, therefore the medical devices manufacturers are increasingly making a switch to outsourcing to curb production costs.
Based on the services, the medical product design market accounted for around 29% share of the overall medical devices outsourcing service industry in 2012, and was considered as the largest market among other segments. The design and development of medical devices is the most capital extensive phase in the production, and therefore, it experiences the maximum rates of medical devices outsourcing.
The product implementation market is emerging as the fastest growing market for medical devices outsourcing services. The increasing adoption of process overlapping as the profitable alternative and the synchronized execution of product design and implementation procedures are some other factors accountable for the rapid growth in this global market.
Class II medical devices: most outsourced market segment
In 2012, the market for class II medical devices dominated the global medical devices outsourcing market based on application. The class II medical devices involve lower risk of possible injury and are less fatal for the patients.
These devices comprise surgical drapes, infusion pumps, powered wheelchairs, and various other medical devices with moderate risk. As compared to class III medical devices, these devices are technically less complicated, hence, are the most outsourced market segment.
The class I medical devices market comprises devices, which are less risky and are generally purchased from external suppliers. The class III medical devices market is the second-largest market for global medical devices outsourcing services in terms of revenue generation.
The rising number of initiatives focused on reducing the incidences regarding product recall and the need for the external expertise are likely to stimulate the development of the class III medical devices outsourcing market. According to market experts, during the period from 2005 to 2009, the number of intended product recalls reached around seven hundred year-on-year.
Medical devices outsourcing market: North America dominates global market
North America dominates the global medical devices outsourcing market. The rapid growth in the manufacturing of medical devices focused on satiating the rising demand for better health care in the region is the major factor propelling the development in this market.
North America spent more than 15% of its GDP on medical and health care sector in 2013. The growing support from the government to reduce health care expenses is also projected to stimulate the growth in the medical devices outsourcing market in North America.
Asia Pacific is expected to register the fastest growth in the medical device outsourcing market. The region is emerging as a manufacturing hub, thanks to the presence of comparatively lower costs associated with labor and infrastructure.
The increasing demand for diagnostic devices in the region owing to the improvement in the health care infrastructure, awareness level in patients, and increasing disposable income is also estimated to offer lucrative prospects to market participants. Accellent Inc., Cirtec Medical Systems LLC, and Creganna-Tactx Medical are some of the major players operating in the global medical devices outsourcing market.
Source: Transparency Market Research