IVD Devices Segment Bolsters Medical Contract Manufacturing Market Growth

According to our new research study on "Medical Contract Manufacturing Market Forecast to 2031 - Global Analysis - by Service Type and Device Type", the market was valued at US$90,010.13 million in 2024 and is projected to reach US$1,88,655.12 million by 2031; it is estimated to register a CAGR of 11.2% during 2025-2031. The medical contract manufacturing market report highlights the prevailing trends in the global market, as well as the drivers and deterrents influencing its growth.

The rising demand for medical devices, increasing costs associated with in-house production, growing regulatory compliance requirements, and the expertise of contract manufacturers contribute to the ever-increasing size of the medical contract manufacturing market. However, the shortage of skilled labor hampers the growth of the market. Furthermore, miniaturization of devices will introduce new trends in the medical contract manufacturing market in the coming years.

Growing Regulatory Compliance and Expertise of Contract Manufacturers Bolsters Medical Contract Manufacturing Market Growth

Regulatory compliance plays a pivotal role in driving the growth of the medical contract manufacturing market in the US by ensuring device safety, effectiveness, and quality throughout the product lifecycle, building stakeholder confidence, and facilitating market expansion. The FDA's Quality Management System Regulation (QMSR) Final Rule, effective February 2, 2026, amends the current good manufacturing practice (CGMP) requirements under 21 CFR Part 820 by incorporating ISO 13485:2016, harmonizing US standards with international ones to promote consistency and reduce duplicative efforts for contract manufacturers. This alignment enables contract manufacturers to leverage a single set of requirements for inspections and audits, minimizing the burden of complying with both domestic and global standards, and facilitating faster market access for devices. The QMSR integrates risk management across clauses such as 4.1, 7.1, and 8.2 of ISO 13485, ensuring that contract manufacturers address risks in design, production, and post-market activities. This enhances product reliability and reduces recalls, sustaining market trust and driving demand.

This compliance framework directly contributes to growth by reducing operational costs and enhancing competitiveness. The FDA estimates annualized net cost savings of ~US$532 million through reduced training, documentation, and audit redundancies, allowing contract manufacturers to allocate resources toward innovation and scaling production. Programs such as the Medical Device Single Audit Program (MDSAP) support this by accepting certain audits as substitutes for FDA surveillance inspections, streamlining compliance for exporters and importers, and facilitating timelier patient access to high-quality devices.

The medical contract manufacturing market analysis has been conducted by considering the following segments: service type, device type, and geography. 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.

Based on device type, the medical contract manufacturing market is segmented 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.

The geographic scope of the medical contract manufacturing market report includes assessing the market performance in North America, Europe, Asia Pacific, the Middle East and Africa, and South and Central America. North America is expected to dominate the market in 2024. The medical contract manufacturing market in North America is segmented into the US, Canada, and Mexico. OEMs are increasingly outsourcing production to focus on core competencies such as research, development, innovation, and marketing. This shift reduces capital expenditures on in-house facilities, minimizes operational risks, and leverages specialized expertise from contract manufacturers (CMOs). The trend is amplified by the complexity of modern devices, making it challenging for OEMs to maintain full-scale production internally.

The escalating cost pressures and need for cost-effective production, as in-house manufacturing demands substantial capital for facilities and research and development prompting OEMs to outsource to specialized CMOs for economies of scale and reduced overheads; for instance, in November 2024, Taiwan-based Medeologix acquired three US medical device companies to form a comprehensive outsourcing service group, enabling cost savings through integrated supply chains and streamlined operations.

The rising prevalence of chronic diseases and an aging population, which heightens demand for advanced Class II devices such as cardiovascular and diagnostic tools, overwhelming internal capacities and necessitating scalable outsourcing; the FDA's approval of over 30 high-risk devices such as the TriClip G4 System in early 2024, many relying on CMOs for rapid production to meet surging needs. Thus, high prevalence of chronic diseases, rising in-house manufacturing costs, and high demand for medical devices drive the US market growth.

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