The medtech outsourcing industry represents a dynamic global pool of CDMOs with a wide range of capabilities, technology specialties, and end markets. Despite continual macroeconomic challenges, the global medtech CDMO market reached $81.5B in 2023, growing over 11% in the past year. Revenues accrued by over 600 CDMOs across European and United States (US) markets cumulatively represent over half of the global CDMO industry.

Our 2024 Global Medtech Contract Manufacturing Report provides details on global trends and investment activity, as well as an in-depth analysis of the European outsourcing market.

Global Medtech Industry Performance & Outsourcing Trends

The global medtech industry closed out 2023 with notable successes amidst an overall tumultuous economic backdrop. 2022 was characterized by global supply chain disruption and inflation of material and labor costs, while in 2023, the medtech industry faced challenges pertaining to procedure volumes and adverse capital markets with restricted early-stage funding.

Some market restraints affecting medtech outsourcing will likely persist in 2024, with pressures driven by regulatory changes, recessionary spending cuts, and variability of demand. Nevertheless, as the effects of inflation begin to ease, shipping costs diminish, and interest in near-shoring grows, both the medtech industry and its corresponding CDMO sector may be able to realize opportunities to bounce back amidst challenging market conditions.

Underscoring its resilience, the global medtech industry has continued to innovate across high-demand service areas. In 2023, the cardiovascular, surgery, and orthopedic subsegments experienced the strongest growth, spurred by interest in new procedures and equipment such as robotic-assisted surgery and minimally invasive surgery solutions, innovative implant materials, and single-use kitting. As these new devices are developed and later commercialized, manufacturers seek flexible, qualified CDMOs with whom they can grow in long-term partnerships.

European Medtech CDMO Market

This year’s analysis expands on prior CDMO research, centered upon the US, by delving into the European medtech CDMO sector, its performance compared to global trends, and its distinctive economic drivers.

The European medtech CDMO market is estimated at approximately $18.5B in 2023, growing 8.9% from 2022. The US market is slightly larger and growing moderately faster (grew over 12% in 2023, reaching $26.3B in value). The two markets differ in size and growth due to the historical fragmentation of European CDMOs, which are commonly smaller firms focused on serving domestic original equipment manufacturer (OEM) clientele.​

Regional Trends and Capabilities in Key European Countries

We analyzed 336 medtech CDMOs with operations in Europe and then evaluated regional macrotrends, specialties, and end markets within the United Kingdom, Germany, Italy, France, Switzerland, the Nordics (Denmark, Finland, Sweden, Norway), and Ireland. Data shows that most manufacturers in these countries are confined to national borders, though recently several larger firms from the US have expanded there to cater to European markets.

The footprint of medtech CDMOs across Europe varies significantly due to the differing economic environments, historical manufacturing skills, and established OEMs in each region. While not all CDMOs in a region behave the same, we have found that each country has honed core competencies and technical expertise over time, allowing them to be widely recognized on the world stage.

Mergers and Acquisitions (M&A) and Investment Activity in Global Medtech CDMOs​

Around the world, medtech CDMO M&A activity remained robust in 2023. More than half of the deals identified had cross-border connotations involving US, European, and Asian players, showing an increasing interest in global expansion. Deals were driven by record private equity (PE) capital allocation worldwide; recent multi-billion-dollar PE-backed acquisitions indicate a growing appetite for large-cap secondary buyouts. Inorganic vertical integration continues to be the preferred avenue for growth, especially for buyers seeking to gain a foothold by providing highly technical segments like injection molding and design and development services.

Looking ahead to 2024, we expect that the medtech outsourcing market will remain hungry to seize more growth opportunities. European CDMOs, boasting highly specialized services across the value chain, represent a promising frontier for global industry consolidation. US-headquartered CDMOs with a footprint in Europe have already realized the value of securing geographic expansion where demand for services is high. ​Which industry leaders will follow suit?