2022 was a big year for innovation in medical technology, and it’s not losing steam any time soon. According to McKinsey, “25% of the total medtech market is projected to grow at 6 percent or more a year” for the next three years.
And already, we expect 2023 will live up to that pattern. It won’t be long before rapid testing, diagnostic software, and digital therapies will all become a fixture of the new normal of healthcare.
All this, thanks in large part to something as simple as better communication. More specifically, the technology that facilitates stronger, more reliable communication between medical device manufacturers and their rapidly expanding partnerships with contract development and manufacturing organizations (CDMOs).
With compressed innovation, comes expanded partnerships
For decades prior to the rise of contract manufacturers (CMs) you would be hard-pressed to refer to these relationships as anything more than transactional. Design, development, and any product optimization activities were largely kept in-house, and the manufacturing of parts or whole products was outsourced usually as a cost-saving measure.
CMs were once generic; they received their specifications and they fulfilled their assignment.
But these were days when the market was steered by the product companies—when the healthcare professionals and even patients themselves didn’t have recourse to seek out the latest innovations. They had what they had.
Now the market is steered by demand—what’s the most convenient, most accurate, and most effective medical device for a particular treatment? What will improve the lives of patients and doctors alike?
The pandemic moved the world to a digital landscape in a breakneck timeframe—years of innovation compressed into a matter of months. With increased innovation comes increased competition—and the medical device industry is feeling the brunt of the pressure.
Hence, the recent meteoric rise of CDMOs. Though they’ve been a staple of the biotech and pharmaceutical industries for years, it’s only recently that medtech and medical device companies have begun to lean much more heavily on CDMO’s unique competencies, specializations, expertise, and resources to further their competitive advantage in the market.
No longer a one-way street
To be clear, product optimization and innovation aren’t automatic benefits of using a CDMO. That’s why we call this a partnership: it requires robust, in-depth communication from the very start of the product development process to be successful.
Now, CDMOs can’t afford to be generic; they deal in the realm of specifics by their very nature. Their partnerships with original equipment manufacturers (OEMs)—in this case, medical device companies—rely on knowledge of the industry landscape and specialization in the field.
With this level of collaboration, CDMOs aren’t simply transactional. The days of a one-way street relationship are behind us, as communication must go both ways in order to deliver a product to market on time, and with greater market share. And of course, to ensure it can make a considerable, potentially life-saving difference in the lives of patients.
What factors to consider in selecting a CDMO
There’s a lot at stake in 2023 if medical device manufacturers are just now embarking on the challenge of selecting the right CDMO for their unique needs. Here are some factors to consider in forging this all-important relationship.
1. Skills and experience: Perhaps an obvious one, but it should be clear that the CDMO has the expertise to manufacture a product not only to your specifications but also to your standards.
2. Certifications: Remember the OEM retains responsibility and regulatory control as the legal manufacturer of the product and must be able to manage audits that arise. Make sure the CDMO is up to par on the certifications you require: ISO 13485, FDA Part 820, Part 11, ISO9001, etc.
3. Risk Mitigation: As much as we may want to let our guard down almost three years after the initial COVID-19 surge, now is not the time to relax on risk. Disruption is still very much a clear and present danger, and your CDMO needs to have strong risk mitigation in place. Consider:
- Their location. Can you avoid off-shoring? Are they in a nearby time zone? Do they speak the same language
- The political ramifications of current events (i.e. an ongoing global war).
- Potential for extreme weather events.
4. Design for Manufacturing (DfM): Depending on how early in the product lifecycle you would like to loop in the CDMO, consider their DfM services. Many CDMOs now offer robust, innovative design capabilities, and are even developing their own products.
5. IP Protection: In a digital marketplace, IP is the new currency. Not to belabor the analogy, but the best relationships are built on trust. A partnership with a CDMO requires the secure sharing of sensitive information. It’s important to note, this also relies heavily on the technology you both use.
6. Modern, cloud-based technology: This is non-negotiable in today’s market. How can you keep up with the ever-accelerating pace of innovation if your CDMO’s technology can’t keep up? Keep reading below to better understand what’s at stake.
Your CDMO partnership can only be as effective as your technology
Today, as CDMOs get more involved in product design, they need a single system that allows them to own the design and development in addition to manufacturing and process. More than that, the right platform would also offer them more control.
Because CDMOs are integrated into more of the product lifecycle, OEMs cannot be choosy about what systems they modernize and need to be going even further with their modernization. Both the QMS and PLM have to be held to a higher standard in terms of their technological capability (ideally flexible, accessible, and future-proof).
As mentioned, the CDMO relationship is not one-and-done anymore; there are many more cycles of collaboration required in an integrated partnership. Plus, communication needs to be rapid to meet the go-to-market delivery pressure within the medical device industry.
In practice, this means with every change order, supplier corrective action request (SCAR), suggested enhancements, or quality issue, all stakeholders from both the OEM and CDMO sides are instantly notified and the necessary actions can be taken in real-time.
Security and Risk Mitigation
Keep in mind, while all this sharing and collaboration takes place between the two parties involved, the entire process must be kept secure.
Believe it or not, many device manufacturers say they don’t even get access to a bill of materials (BoM), the CM holds onto the critical information. How are the device manufacturers expected to keep track of crucial lifecycle factors such as cost, availability, and supply chain risk?
The OEM medical device company still owns the product as the legal manufacturer throughout the lifecycle which means they need robust visibility into the CDMO activities. The platform therefore also must offer access for all stakeholders to see critical information as it evolves by showing the state of control.
Furthermore, many platforms aren’t capable of allowing OEMs to send materials selectively to their CDMOs. What ends up happening is the device manufacturer is forced to either share more information than is necessary or circumvent the system entirely to send select documents (via email or ftp, for example), both of which present security risks.
Medical device manufacturers should therefore look for platforms that allow them to pick and choose which subsystems to send to their CDMO, so only the relevant information need ever be shared—down to specific BOMs, AML, and components.
The clear benefit here is that regulatory teams are involved early in the new product development process and can stay on top of quality issues throughout, rather than waiting until the final stages of development to gain access to the CDMO’s activity.
As nonconformances get addressed in real-time, medical device manufacturers see reduced quality costs and, more importantly, are able to offer better patient outcomes.
The new tool for CDMO communication
The best partnerships between CDMOs and OEMs have open collaboration between each parallel team: regulatory teams on both sides working in parallel, security teams working in parallel, engineering teams, etc. But many of the biggest players in industry cloud solutions are missing a major connection point: the commercial teams.
With commercial teams such as sales, marketing, branding, and field service, brought into the fold with full visibility from the start of the product lifecycle, go-to-market efforts can start much earlier, which ensures compressed cycle times and speedier time-to-revenue.
In the medical device industry, regulatory information is central to sales and marketing. Healthcare institutions, healthcare professionals, and patients alike all need reassurance first and foremost that the product is safe and meets FDA standards. With product value management (PVM), the OEM commercial team has full visibility and contextual collaboration with the CDMO regulatory team.
This particular piece of the puzzle is only offered by a PVM platform. It loops in every relevant stakeholder from the device manufacturer and the CDMO onto a shared system for coordinated and timely launches.
And it goes both ways. All insights from post-market activities are looped back to the CDMO development team for continuous optimization in each iteration of the product.
Lastly, with the CDMO working in the same system as the OEM—and that one system includes QMS, PLM, and go-to-market activity—risk is significantly reduced. Enhanced collaboration with PVM enables the medical device manufacturer and the CDMO to plan for and be better prepared for future disruptions and keep all sensitive materials together within the same system.
Best-in-class PVM providers such as Propel Software include secure supplier management portals that allow medical device manufacturers to view what their CDMOs are doing throughout every step of the process. With this level of collaboration, communication between the CDMO and the OEM is effectively a closed loop—and that’s about as strong as a partnership can get.
This article is part two of our series on CDMOs in medtech. We invite you to check out part one, “How CDMOs are Evolving to Enrich Medical Device Manufacturing.”