Originally Published MX May/June 2004

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

With an ever-expanding menu of services, full-service outsourcing firms are reshaping medtech's vendor community.

Steve Halasey and Courtney Harris

The use of outside vendors has a long history among medical device manufacturers. As often as not, the fabled founders of today's medtech megacorporations pulled together the earliest prototypes of their devices using off-the-shelf materials and components purchased from specialized suppliers. And when it came time to produce the prototypes in large quantities, many of those entrepreneurs sought out the expertise of contract vendors with experience in manufacturing and assembly.

Today, nearly three decades after the device industry first became regulated, the importance of outside suppliers persists—but with a twist. As cost pressures on the healthcare system have mounted over the past decade, an increasing number of medtech manufacturers of all sizes have been forced to take a long look at the cost-efficiency of their own operations. And many such companies have come to the same conclusion: outsourcing is the way to go.