Posted in Contract Manufacturing Services by Qmed Staff on December 3, 2014
Medical device companies are increasingly turning to outsourcing companies with “one-stop shop” strategies, and the result might be a consolidation wave among contract manufacturers and suppliers, according to a report in European Medical Device Technology.
Reasons for the trend include pricing pressures caused by slim healthcare budgets, ever-shorter product lifecycles and rising complexity, and a more demanding regulatory landscape.
“The continually increasing sophistication of electronics within medical devices will encourage OEMs to utilise broad service EMS providers as part of their business and manufacturing strategies,” Amy To, pharmaceutical and medical devices analyst at the research company Visiongain told EMDT. “To meet these demands, EMS providers are increasing their service offerings to include design, testing, assembly, distribution, customer service, logistics and post market surveillance.”
Mark Bonifacio, principal and owner of Bonifacio Consulting Services (Natick, MA), said much of the same to Qmed early this year. Bonifacio suspected the need for added capabilities, along with larger geographic footprints, is fueling plenty of business partnerships and mergers among small suppliers with around $20 million-a-year in revenue.
“If you are an injection molder, what else can you do? Can you put the parts together? You have to offer more services. ‘Now we can do assembly. And we also do packaging. And we do sterilization.’ You have to offer more capabilities,” Bonifacio says.
