Increased pricing pressure on medical device OEMs and the consequent rise in demand for medical device outsourcing is the highest impact-rendering driver of the medical device outsourcing market.
That’s according to a Grand View Research report, “Medical Device Outsourcing Market Analysis By Application (Class I, Class II, Class III), By Services (Consulting, Product Design & Development, Product Testing, Product Implementation, Product Upgrade, Product Maintenance Services) And Segment Forecasts To 2020.”
A press release on the report provided the following insights:
Spending cutbacks by major healthcare establishments is the primary reason attributing to this rise in pricing pressure. Moreover, with reimbursement framework getting complicated and payers and patients focusing on the value of money, medical device manufacturers are expected to adopt outsourcing as a viable sustainability tool. Implementation of stringent government initiatives such as the imposition of an additional excise duty of 2.3% on medical devices is also expected to drive market growth by encouraging manufacturers to curb costs through outsourcing. The global medical device outsourcing market was valued at USD 23.56 billion and is expected to grow at a CAGR of 11.5% during the forecast period.
Changing dynamics of the healthcare industry has heightened the importance of practitioners and patients in buying decisions. Oligopolistic nature of most medical device markets coupled with increasing buyer awareness levels has forced manufacturers to adhere to business strategies involving constant R&D investments and new product innovations. These endeavors significantly increase expenditure levels and medical device OEMs are therefore, rapidly adhering to outsourcing as an effective cost-curbing tool. Statistics suggest that medical device outsourcing help OEMs reduce cost of production by approximately 15%.
