NAMSA White Paper: MedTech Outsourcing: Is the Past Any Indication of the Future?

In MRO by Tim Blair

Growing regulatory burdens and increased growth expectations have pushed Pharma and MedTech industries towards high-level consolidations as well as strategic outsourcing partnerships. These strategic moves have reduced costs, improved operational margins, increased flexibility, expanded their offerings, expanded geographical reach, and increased access to both broad and focused areas of expertise.

Strategic partnerships with CROs can of course carry risks, although history suggests that time to revenue, operational flexibility, and cost reductions far outweigh those risks over time. For example, companies should outsource to gain flexibility and expertise, but should not outsource to gain short-term savings or solve workflow/process problems.

The cheapest partner is not always the best; it is important to find potential partners with experience, longevity, and reputation. Choose relationships that suit your company’s strengths, and remember that good strategic partnering is centered on trust, which is built over time and grows as partnership solutions to innovation, cost, performance, and speed prove to be worthy. Set appropriate expectations and create key performance indexes (eg., trust, performance, quality, cost) that speak to shared vision and shared risk. Tactical outsourcing can create some simple efficiencies, and strategic outsourcing can redirect resources toward core competencies and strongest value-creation activities, but “transformational outsourcing” can redefine the way the business operates and can achieve rapid, sustainable improvements by taking advantage of innovation and evolving business models. The economic and regulatory pressures on industry are real, but the evolution toward strategic outsourcing partnerships will ultimately help industry bring bigger and better innovations to the marketplace in a more efficient and effective way.

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Authors:

Timothy Blair is Director of Global Business Development for NAMSA. Mr. Blair has 20+ years of experience in the medical device space, from large Medtech leaders to small start-ups. He comes from the device sales, sales management, distribution, and education disciplines in a variety of therapeutics, with experience in early technology assessments and merger & acquisition due diligence. Today, Mr. Blair focuses on executing NAMSA’s global strategies for growth in services, partnerships, and strategic deal making.