Rising Prevalence of Diseases Encouraging Medical Device Manufacturers to Outsource Production
The World Health Organization (WHO) estimates that nearly 1,000,000 people in India and around 173,000 children in Bangladesh are severely or moderately burnt every year. Further, the organization states that over 808,000 children below the age of 5 were killed by pneumonia in 2017. It also reports that approximately 9.3 million cancer-related deaths and 4.1 million respiratory-disease-related fatalities are recorded each year. This grim scenario reflects an extensive requirement for affordable treatment, owing to which medical device manufacturers are outsourcing their production.
Essentially, the increasing focus of medical device manufacturers on reducing the production cost and time will help the medical device outsourcing market advance at a CAGR of 9.7% during the forecast period (2017–2023). The market revenue is projected to surge from $44.9 billion in 2016 to $84.9 billion by 2023. Outsourcing different phases of manufacturing to different contract manufacturing organizations (CMOs) reduces the development time for novel products. Additionally, the distribution of production rights quickens the manufacturing process and results in the development of cost-effective medical devices.
The application segment of the medical device outsourcing market is categorized into radiology, cardiovascular, orthopedic and spine, general medical devices, and others. Under this, segment, the cardiovascular category is expected to register the fastest growth throughout the forecast period due to the rising cases of cardiovascular diseases (CVDs). As per the WHO, they account for nearly 17.9 million deaths every year, and one-third of these fatalities occur prematurely in people below 70 years of age.
According to P&S Intelligence, North America accounted for the largest share in the medical device outsourcing market in 2016 due to the presence of umpteen medical device manufacturers in the region, who are making efforts to increase the availability of such products. Whereas, the Asia-Pacific (APAC) market is expected to demonstrate the fastest growth in the forecast years owing to the availability of less-expensive infrastructure and labor as compared to the developed nations.
Therefore, the surging prevalence of chronic and acute diseases, increasing adherence to quality standards by CMOs, and rising need to reduce the production cost and time of medical devices will encourage their manufacturers to avail of outsourcing services.