The medical contract manufacturing market is projected to reach US$1,88,655.12 million by 2031 from US$90,010.13 million in 2024. The market is estimated to register a CAGR of 11.2% during 2025-2031. Major factors driving the market growth include the rising demand for medical devices, increasing costs associated with in-house production, growing regulatory compliance requirements, and the expertise of contract manufacturers are propelling the acceptance of medical contract manufacturing. Further, surging demand for personalized and home healthcare devices will likely boost the market during the forecast period. However, shortage of skilled labor, high barriers to technological advancement and investment, dependence on imported raw materials and supply chain vulnerabilities are among the market deterrents.

In the US, the rising costs associated with producing medical devices in-house are prompting manufacturers to seek more affordable outsourcing options through contract manufacturing. This shift is largely driven by original equipment manufacturers (OEMs) striving to remain competitive. A report from the National Center for Biotechnology Information (NCBI), published in June 2025, reveals that Class III medical devices, such as pacemakers and implants, incur the highest production costs due to stringent safety and regulatory standards. These costs have skyrocketed owing to supply chain issues and inflation in material prices. According to the US Bureau of Labor Statistics' Producer Price Index, published in 2024, a broader trend is showing input costs on the rise as of August 2025. While final demand prices have decreased by only 0.1%, the medical equipment sector is grappling with increased expenses for labor and raw materials, estimated to rise by 4-6% annually. A landscape analysis from the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) published in January 2025 reveals that these mounting costs contribute to shortages of medical devices, prompting OEMs to seek out contract manufacturers for better economies of scale. Additionally, funding for research and development in the medical device sector is increasing to US$201.9 billion in FY2025, as reported by Congress. Companies such as Medtronic have turned to outsourcing assembly work to save on the hefty maintenance costs of in-house facilities, which can exceed US$50 million per year for cleanroom operations. Thus, the rising cost of in-house production propels the global medical contract manufacturing market growth.

The comparative company analysis evaluates and categorizes the Medical Contract Manufacturing market based on product portfolio (product satisfaction, product features, and availability), recent market developments (merger & acquisition, new product launch & enhancement, investment & funding, award, agreement, collaboration, & partnership, recognition, and expansion), and geographic presence that aids better decision-making and understanding of the competitive landscape. The report profoundly explores the recent significant developments and innovations by the leading vendors in the global medical contract manufacturing market. The key market players are MICRO, Freudenberg Group, Flex Ltd, Jabil Inc, SMC Ltd, TE Connectivity Ltd, Heraeus Group, Cirtec Medical, Integer Holdings Corp, and Tegra Medical.

In terms of service type, the medical contract manufacturing market is segmented into full-device manufacturing, sub-assembly and components, and materials-specific services. The full-device manufacturing segment held a larger market share in 2024, owing to higher productivity, superior quality control, faster time-to-market, and reduced costs option that is leading the medical contract manufacturing market.

Based on device type, the medical contract manufacturing market is categorized into IVD devices, diagnostic imaging devices, cardiovascular devices, drug delivery devices, orthopedic devices, respiratory care devices, ophthalmology devices, surgical devices, diabetes care devices, dental devices, endoscopy and laparoscopy devices, gynecology and urology devices, neurology devices, patient assistive devices, and others. The IVD devices segment accounted for the largest share of the medical contract manufacturing market in 2024. Full-device manufacturing also enhances scalability and risk management, as contract manufacturers control the entire supply chain from raw materials to shipping, reducing errors and accelerating production. This segment is experiencing high demand because it offers significant advantages such as higher productivity, superior quality control, faster time-to-market, and reduced costs.

Companies operating in the medical contract manufacturing market adopt various organic and inorganic strategies. The organic strategies mainly include product launches and product approvals. Inorganic growth strategies witnessed in the market are acquisitions, collaborations, and partnerships. These growth strategies allow the market players to expand their businesses, enhance their geographic presence, and contribute to the overall market growth. Furthermore, acquisitions and partnerships helped strengthen their customer base and extend their product portfolios. A few significant developments by key Medical Contract Manufacturing market players are listed below.

In August 2025, Flex announced a new power shelf system to fast-track 800 VDC power architectures and support the growing demands of AI infrastructure and AI factories. The Flex power shelf system provides industry-leading efficiency for NVIDIA GB300 NVL72 systems while preparing for the transition to 800 VDC data center power infrastructure to support the deployment of 1 megawatt IT racks.

In September 2024, Freudenberg Medical redefined manufacturing by combining Virtual Reality (VR) and Artificial Intelligence (AI) to enhance training, streamline production, and drive efficiency across its global sites, including those in the US, Ireland, and Costa Rica.