Contract manufacturers make products for an original equipment manufacturer, or OEM. The OEM’s name appears on the product when it is sold. Typically the medical device contract manufacture is not credited at all. The contract manufacturing transaction provides two primary benefits for the OEM. First, the OEM is assured that a competent manufacturer is making its medical device. Second, the OEM is freed from the responsibilities of manufacturing and is instead able to concentrate on the business side of things such as distribution and marketing.
The contract manufacturers have the advantage of ensured profit, as the service is contracted. Many pharmaceutical and medical companies utilize contract manufacturing for medical devices. The medical field includes several different categories. Medical devices can be found in the operating room, labor and delivery, nursing homes, intensive care units, home health care, sleep labs and so on and so forth. Medical devices can range from scalpels and suction tubes to stethoscopes and blood pressure monitors to IVs and ultrasound equipment.
Companies in the medical field benefit from contract manufacturing services particularly because their facilities’ focus needs to be on serving the community with innovation and most cost-effective devices rather then taking up space with device production. Also, the quality assurance and quality control achieved by hiring a professional medical device contract manufacturer is necessary and important when peoples’ lives depend on the quality and integrity of a device. Although contract manufacturing has several advantages, it has a few disadvantages, too.
Disadvantages of the contract manufacturing process include possible loss of intellectual property, communication barriers between the OEM and contract manufacturer and loss of control over manufacturing. The communication barriers, both lingual and cultural, are important to think about prior to signing a contract, especially when the contract manufacturer is foreign. This contract agreement, however, has far more advantages than disadvantages.