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Compliance In Focus
Posted by John Lehmann on Mon, Mar 4, 2013

Medtech Views Outsourcing as a Necessity

Recently released by MD+DI and ITG Market Research, the "Medical Device OutsourcingMedtech Views Outsourcing as a Necessity Landscape Study" found that 41% of the 853 medical device professionals that responded expect their companies will “increase use of contract services” over the next five years. Another MD+DI article referenced that many believe the industry is headed for change and uncertainty.  Medical device companies are facing increasing pressure in cost, time to market, and a tougher regulatory environment.

These pressures have led many companies to view outsourcing as a way to help combat these pressures.  MD+DI surveyed its readership to gain their views on outsourcing habits and how it might impact their practices moving forward. Traditionally, manufacturing has been the area contracted out most but there is an expected upswing in using outside contractors for more “legal, regulatory and design services”.

Some key findings from the report include:

  • 52% of device professionals identified regulatory pressures as the most concerning issue
  • 49% are concerned about time to market and the impact the aforementioned regulatory pressure have
  • 30% of respondents characterize the medical device tax as very concerning
  • 28% have concerns over Obamacare

Because of the concern for time to market, a majority (62%) feel that outsourcing can save both cost and time.  They also feel this approach can help speed time to market.  The report also indicates that almost half of the respondents have seen an increase in outsourcing services.

There is a sense that the types of services being contracted are changing from manufacturing services to legal and idea-driven services.  This outsourcing trend has had a positive impact on the U.S. economy, as nearly 73% of respondents have contracted with U.S. based firms.

Some key findings from the report include: With the ramifications of the new Medical Device Excise Tax and Obamacare not yet known, device companies are on high alert for ways to cut cost, increase efficiency and quicken time-to-market.  A recent IMARC posting identified some of the advantages of outsourcing certain services.

With the continued growth of the medical device sector, the increase in outsourcing means new opportunities for contractors.  What contracted services do you see an increased need for? How should contractors beef up their service offerings in order to keep up with the growing demand for outsourced services? 

What’s your take on this report?  Does your firm embraced outsourcing?  If so, what types of services are outsourced and what type of vetting process is in place.   We look forward to your response b below.

Photo Credit: murph11

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Topics: Outsourcing, Medtech Industry, ITG Market Research, MD+DI

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