Medical Device Testing And Certification Market

Market Overview

The global medical device testing and certification market size was valued at USD 9305 million in 2021. It is estimated to reach an expected USD 13,828 million by 2030, registering a CAGR of 4.5% during the forecast period (2022-2030).

Pharmaceutical products and medical devices need to follow standards for quality assurance. Product validation and verification aim to ensure that the product works efficiently per its intended purpose. The increasing demand for the validation and verification of medical devices, the growing consumption of medical devices in developing countries, the harmonization of standards, imposition of rigorous government regulations, and the growing trend of outsourcing medical device testing services and standards are expected to drive the demand for medical device testing and certification over the forecast period.

Market Dynamics

Market Drivers

Increasing Need for Validation and Verification (V&V) for Medical device

Effective and well-documented validation and verification activities are fundamental, as they provide the highest-quality designs and production processes. The rate of mistakes in medical devices is lowered, less redesign is required, and a faster production process can be ensured with the help of validation and verification. These advancements associated with validation and verification are boosting the overall market growth.

The increasing development of medical devices and the growing complexity concerning product designing and engineering are increasing the need for validation and verification (V&V) services. Medical devices are becoming smaller and more complex, owing to the incorporation of software. The complexities in requirements and customer needs have made medical devices more difficult, increasing the demand for validation and verification.

Moreover, the rising prevalence of chronic illnesses, like cancer, is increasing the demand for developing advanced technologies, raising the need for validation and verification. Validation and verification are more standardized than in the past, which has streamlined the manufacturing and approval processes. It is further enhanced by automated testing and powerful diagnostic and data collection tools. Owing to the factors mentioned above, it is evident that the validation and verification process is becoming critical, positively influencing the overall market growth.

Compliance of Standards

Compliance with the standard is essential to protect patient safety, maintain the manufacturer's reputation, and minimize the chances of product recalls due to any adverse effect of the device. Due to many recalls, the government and the manufacturers are strictly following the guidelines for medical devices.

National regulatory authorities of every country expect manufacturers to comply with the standard guidelines and check it by a third-party certification system, which is expected to propel the medical device testing and certification market and increase easy market access. Since guidelines are distinctive in each nation, every medical device manufacturer needs to enroll or get administrative rules of that particular nation, which demonstrates the requirement for approved third parties to enlist their devices.

Hence, from the factors mentioned above, the demand for medical testing and certification increases, which will further propel the growth of the overall market during the forecast period.

Market Restraint

Diversity in Regulation

The standard guidelines of medical devices vary from country to country, which is mandatory for all manufacturers to follow for marketing or selling their products. Regulations are different in every country. The United States follows the FDA guidelines, Europe considers CE approval, Canada needs Health Canada Registration, and India requires the Central Drugs Standard Control Organization (CDSCO) approval. This varied range of supervisory landscape energies the testing and certification market. If a company wants to increase sales to different countries, the various rules and the diversity of regulations hinder the process as it is costly and tedious.

Moreover, excessive regulations, particularly in the domestic context, can also be an obstacle to local innovation of these medical devices. This will potentially hinder domestic innovation by subjecting new technologies to a lengthy and expensive licensing procedure. The excessive regulations will subsequently increase the cost and time that need to spend, in addition to the manufacturing cost of the medical devices.

Hence, all these factors mentioned above, such as excessive regulation and different regulations in different countries, are challenging to launch medical devices globally, further obstructing the overall market growth.

Key Market Opportunities

Acquisition Opportunities

Manufacturers are heavily investing in testing and certification, as these devices need to comply with stringent regulations. In addition, as major pharmaceutical and biopharmaceutical companies have been increasing their focus on developing numerous therapeutics and medical devices to provide effective treatment for various chronic diseases, the need for medical device testing and certification services is expected to grow in the future.

North American Science Associates, a US-based business that offers to test and consulting services to manufacturers of medical devices, was purchased by the French-based private equity group ArchiMed in September 2020. Additionally, in August 2020, Biogroup-LCD stated that it acquired Medisch Labo Medina, a testing and diagnosing medical lab located in Belgium. Further, another business, SGS, disclosed in January 2020 that it had received Stephens & Associates, a US-based provider of contract research, safety, and efficacy testing for pharmaceutical, device, cosmetic, and personal care goods.

Hence, from the development mentioned above, it is evident that medical device testing companies are making acquisitions to broaden their sector coverage. They are continuously involved in strategic investments in medical device testing services, creating tremendous opportunities for overall market growth.

Regional Analysis

By region, the global medical device testing and certification market is segmented into North America, Europe, Asia Pacific, and LAMEA.

North America accounted for the largest market share and is estimated to grow at a CAGR of 4.3% during the forecast period. In the United States, the Food and Drug Administration (FDA) regulates the process of medical device testing and certifications. In February 2019, FDA issued guidance that expanded the Abbreviated 510(k) Program for medical device development and premarket notification submissions. In this expanded guidance FDA has operationalized a new pathway for device approval. In this pathway, a 510(k) eligible device manufacturer could obtain clearance by meeting FDA-identified performance criteria to demonstrate substantial equivalence. Later, in September 2019, the FDA issued several draft guidance identifying performance criteria and testing methodologies for specific devices within four class II device types. These developments and regulations amendment by the FDA has been making the product approval process easy while enforcing devices to meet the validation and verification criteria expected to fuel the market growth.

Europe is the second largest region. It is estimated to reach an expected value of USD 3,435 million by 2030, registering a CAGR of 4%. Germany has an advanced and robust medical equipment market. The established companies such as Siemens, Carl Zeiss, and Draegerwerk. Germany claims to have the third-largest medical technology market in the world, behind the United States and Japan.

Additionally, it is by far Europe's largest market. The demand for testing and certifications is anticipated to rise as the size of the medical device market also does. All medical devices marketed in Germany must pass medical device testing and certification procedures. Medical device sales in Germany are subject to strict safety, certification, and directive requirements set forth by German and European Union (EU) directives, standards, and safety rules. In May 2021, the EU Medical Device Regulation (MDR)) is expected to come into force, further increasing medical device testing, certification, and compliance requirements in Germany.

 The Asia Pacific is the third largest region. China represents one of the major medical device industries in the Asia-Pacific Region. The Chinese government requires each medical device to undergo proper testing and standard compliance procedures before the commercial launch in the Chinese market. The National Medical Products Administration (NMPA), formerly the China Food and Drug Administration, requires in-country testing and extensive clinical data for most medical devices. The Chinese State Council passed new Medical Device Regulations. The new regulations have strengthened post-market scrutiny on product safety and have imposed penalties on the manufacturers. The new guidelines have also increased liabilities for non-compliance with the standards. For example, manufacturing and distributing unapproved medical devices can lead to fines of 15-30 times the sales value. This regulation will further increase the demand for medical testing and standard certifications, as manufacturers will increase their focus on safety and risk assessment before commercializing medical devices in China.

Segmental Analysis

The global medical device testing and certification market are segmented by service type, sourcing type, device class, technology, and region. 

On the Basis of Service Type

By Service Type, the global medical device testing and certification market is segmented into testing services, inspection services, and certification services. The testing services accounted for the largest market share and is estimated to grow at a CAGR of 4.2% during the forecast period. The rising initiatives by the market players will boost segment growth. For instance, EAG Laboratories added a new facility in St. Louis, Missouri, in May 2021 to increase its capacity for testing medical devices. The new lab will help meet the needs of the medical device sector. It enhances EAG's analytical capabilities, permits quicker turnaround times, and aids in meeting changing FDA and EU Medical Device Regulations standards (MDR).

The global medical device testing and certification market is segmented by sourcing type into in-house and outsourced. The in-house segment accounted for the largest market share and is estimated to grow at a CAGR of 4% during the forecast period. The benefits associated with in-house testing are:

Ownership: The medical device testing process grants a company control over the whole project, from technical insights and cost through timing and submission decisions, etc., and handling projects internally allows organizations to avoid competing with other companies.

Direct lines of communication: Internal communications may be easier and more efficient because it eliminates outside involvement, and they could shorten response time.

Owing to the abovementioned factors, this market segment is expected to grow significantly during the forecast period.

On the Basis of Device Class

By Device Class, the global medical device testing and certification market is segmented into Class I, Class II, and Class III. Class II accounted for the largest market share and is estimated to grow at a CAGR of 3.8% during the forecast period. The FDA has identified product code-specific guidance documents and Recognized Consensus Standards for many Class II devices as part of their unique controls. These types of FDA guidances and standards are referred to as "vertical" because they pertain to a particular kind of device, such as a dental implant, as opposed to a general device characteristic, like sterilization, according to the FDA's Recognized Consensus Standards. Moreover, companies, such as EKG Labs, provide various analytical solutions to support 510(k) filing by helping to determine product equivalency. They have experience working with Class II and Class III medical devices and combination products that incorporate a pharmaceutical component. Thus, owing to the factors mentioned above, this segment of the market studied is expected to grow positively during the forecast period.

On the Basis of Technology

By technology, the global medical device testing and certification market is segmented into active implant medical devices, non-active medical devices, active medical devices, in vitro diagnostic medical devices, ophthalmic medical devices, orthopedic and dental medical devices, vascular medical devices, and other technologies. The active medical device accounted for the largest market share and is estimated to grow at a CAGR of 3.8% during the forecast period. According to the Medical Device Regulation (MDR), an active medical device is any apparatus whose operation relies on an energy source other than that produced by the human body for that purpose and alters the density or transforms that energy. In 2021, TÜV SÜD presented at this year's MedtecLIVE as a one-stop shop for medical device testing services. The company's services cover electrical and functional safety testing, cybersecurity and software, EMC, and biocompatibility. Thus, the factors mentioned above, along with the growing awareness among the population, may fuel the growth of the studied segment.

Recent Developments

August 2022 - TÜV Rheinland has granted the world's first certification for a drone following the new EU regulation for civil unmanned aircraft systems (UAS) as an official Notified Body.

June 2022 - Conenergy and TÜV Rheinland have partnered to increase services along the whole hydrogen value chain and to aid clients in their transition to a more sustainable energy source.