Medical money

With growing demand for medical devices and shrinking healthcare expenditures, product pricing has become a central issue in medical manufacturing.

The limited supply of raw materials, complex regulations, and the lack of sufficient skilled labour are making it increasingly difficult for European manufacturers to tackle the pricing issue. The mounting threat of low-priced products from Asia has made Europeans look to outsourcing and offsite manufacturing as potential solutions.

"Medical manufacturing has witnessed radical change in the last decade"

Almost 80 per cent of medical device companies in Western Europe have either outsourced their products completely or partially, or would do so within the next five years – according to research published by Research and Markets. Many manufacturers have benefited from outsourcing different stages; such as sourcing, production, assembling, packing and sterilisation, and logistics. At the same time, different countries are attracting various types of medical manufacturers.

"Medical manufacturing in Europe has witnessed radical change in the last decade," noted the analyst of this research. "Manufacturing no longer occurs at a single place; from sourcing to assembling to packaging, all these functions are performed at different places in a bid to attain cost efficiency, paving the way for outsourcing and offsite manufacturing."

The global hot spots for medical manufacturing include Poland, the Czech Republic, China, India, and Brazil.

"The euro has boosted imports from low-cost countries"

Limited supply of resources in Europe, escalating and extremely volatile raw material prices, high labour and manufacturing costs in comparison to their Asian counterparts, and new labelling regulations threaten European medical device manufacturers.

"Competition from inexpensive products made by Asian manufacturers, and the lack of sufficient skilled labour have posed significant challenges to medical device manufacturers in Europe," remarked the analyst. "However, regulations promoting trade between EU countries, together with the euro, which is stimulating pan-European trade, will continue to drive market expansion."

EU regulations state that movement of goods and services among the 27 member EU states is permitted freely with only a few minor trade restrictions. This movement is considered to be ‘acquisitions’ and ‘dispatches’ rather than imports and exports, allowing Western Europe easy access to certain raw materials. At the same time, the existence of a single currency has encouraged trade.

The euro has boosted the imports of intermediate goods from low-cost countries, thereby lowering production costs and focussing on the higher value-added stages of the production chain. These trends are supporting the medical manufacturing market in Europe.

www.researchandmarkets.com

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