Medical Device Manufacturing Requirements
Sending medical device tooling overseas could cost you more than shipping costs. Outsourcing to other countries will not save you money, and you could be sacrificing your privacy and reputation. Discover how to ensure that your life-saving medical devices will adhere to the strict standards of today’s medical professionals.
American Medical Device Manufacturing
Producing medical devices in the United States is a lucrative endeavor thanks to the growing need for medical care in the aging American population. In 2016, the medical device industry had a value of $147.7 billion with room for continued growth, thanks in part to the Affordable Care Act that required all Americans to carry health insurance.
Though the health care industry landscape has changed since then, the need for medical devices has not. By 2060, the elderly population, which currently accounts for one-third of healthcare use, could become 23 percent of the population. The percentage of healthcare use by the senior demographic will likely rise as the percentage of the elderly in the United States increases. While the population continues to grow and get older, the need for medical interventions in age-related conditions increases.
The medical technology — also called medical devices — industry accounts for 2 million jobs in the United States through direct employment of workers and indirect contracting of parts manufacturers. This sector includes multiple small businesses, with 80 percent of companies in the medical manufacturing industry employing fewer than 50 people.
With such a robust, competitive medical device industry, some companies still insist on sending their production overseas to China or India to save money. But such a move does not save money, and it could put patients’ lives at risk from contaminated products.
Why Manufacture Your Medical Device Parts in the United States?
American manufacturers offer several advantages over foreign companies. By keeping production close, you can gain more control over quality, avoid contamination and keep your intellectual property private.
Quality Assurance of Medical Devices
To ensure quality, the FDA requires for all imported products to meet both FDA regulations and Customs and Border Patrol requirements. Despite these rules attempting to keep poorly made and dangerous products from reaching patients, problems still occur. Even the FDA admits that regulations alone will not stop sup-par products from reaching consumers. To ensure quality, the FDA has programs that seek help from stakeholders in the manufacturing of medical devices in its Case for Quality program.
Additionally, other worldwide regulatory committees can submit reports for the Medical Device Single Audit Program — MDSAP — to allow imports into the United States. The FDA relies on testimonies to showcase the success of the MDSAP, but glowing reviews from a handful of people do not show the full picture. The program is relatively new since the final report of the three-year pilot came out in 2017. Industry professionals will need more time to ensure that these international audits match those of the FDA.
Should a problem occur with the imported materials, you’ll see a dramatic increase in the time it takes to get your devices to market to clear up the issue. Sometimes, FDA inspectors will randomly sample the imported technology. If the inspectors find noncompliant products, the entire shipment gets detained accompanied by a Notice of FDA Action. Detaining the shipment delays the order until the importer can recondition the product and resubmit it for FDA evaluation, which the FDA does not make available in all cases.
Even if devices manufactured overseas pass inspection, they might not meet your company’s requirements, and selling lower caliber products with your company name on them could harm your brand’s reputation. It takes years to build a reputation, but you may need even more time to recover from a bad set of products shipped with your brand name on them. Ensuring the quality of the goods you make overseas will help both the patients you serve and your company’s hard-earned reputation for well-made products.
Combating Contamination in Medical Device Manufacturing
Contamination can occur in foreign markets due to lower manufacturing standards and shipping issues. In some cases, natural disasters can cause problems. For example, in 2011, when a major earthquake caused a nuclear power plant meltdown in Japan, the FDA issued a warning about possible contamination of medical supplies from that country. While the federal regulators knew about the disaster, could some devices or components with defects have slipped through without notice? No one knows.
In 2007 and 2008, 81 people died from contaminated heparin manufactured in a noncompliant facility in China. The FDA regulates both drugs and medical devices imported into the United States. If that regulatory group could not prevent the tainted drugs from reaching patients, how can you be assured that they’ll prevent dangerous medical devices from filling pharmacies and hospitals?
If you keep your manufacturing in the United States, you can rest assured that the facility is compliant with FDA regulations, as inspectors have closer access and can check the plant at regular intervals. A manufacturer that’s closer to your facility will make it easier for you to know whether the process fits your company’s requirements, including if the devices or parts are safe and free of contaminants.
Tightening the Supply Chain
Having devices and parts manufactured around the world increases the cost of shipping and enlarges your supply chain. Small problems on the other side of the globe could halt your production by blocking your receipt of vital components for a medical device. What’s more, a local flood or political movement in another country could stop the export of your parts, setting your operations back days, weeks or months.
Even delays caused by customs screenings could waste valuable time that might cost you market share. You’ll also pay for the cost of shipping goods from overseas — with money and with your company’s time. Depending on the shipping method you choose, it could take weeks for your supplies to reach the United States. Selecting a faster shipping method, such as air, will reduce the time required but cost you more money. Balancing time and money often means choosing a stateside manufacturer.
Selecting medical device tooling in the United States reduces shipping time. You’ll also have the manufacturer in the same country, cutting shipping charges. American manufacturers are ready to discuss your project during your workday, not in the middle of the night, and their experts speak your language without you needing to find a translator.
Language barriers, time differences, shipping distances and other small factors make juggling a global supply chain difficult. These elements offset the small amount of money you’ll save from low foreign labor costs.
In addition to costing you time and money, a stretched supply chain could put your company’s intellectual property at risk. Having multiple servers and computers at sites around the world and companies with unvetted workers increases the chances of having your trade secrets stolen, costing you your unique position in the marketplace.
Keeping Your Production Private
Your intellectual property, whether it’s for individual components or the assembled device, is at risk when you send your manufacturing to other countries. The best ways to protect your company’s trade secrets are by securing all computers and servers with the data and screening employees who have access to it with background and credit checks.
If you have a manufacturer in the United States making proprietary components for you, such screenings are much simpler. If you outsource to another country, on the other hand, you lose access to the workers who see your product information.
The Office of the United States Trade Representative, USTR, has a listing of countries that fail to fix problems with theft of trade secrets, hacking, counterfeiting, online piracy and other IP-related issues.
China and Intellectual Property Problems
China is among the top countries listed on the USTR’s 2018 priority watch list. This country has not shown that it will take measures to prevent and prosecute theft of trade secrets or other intellectual property.
The matters hit close to the medical device industry considering the 2019 case of the Chinese national Wenfeng Lu, who stole trade secrets from a cardiac device manufacturer in California. He intended to use them to open his own manufacturing company for cardiac and vascular devices in China. Lu pled guilty to the charges and received 27 months in federal prison. The judge looked harshly on the taking of trade secrets to China, noting that the secrets were “at great risk of being stolen.”
Hong Kong and China imported 77 percent of the value and 87 percent of the counterfeit goods seized by Customs and Border Patrol in 2017. Additionally, the USTR recommends that China seek to prevent information disclosed confidentially to government authorities from leaking to corporations and other entities in the country who could use the information for profit.
Another problem for American companies is China’s lack of trademark laws to protect established brands. Many companies in China have trademarks that are identical to those of American brands, which the country allows due to their lax laws. By selling products under the names of established companies, these fake brands undercut the profits and reputation of the original company.
Problems With Manufacturing in India
Like China, India is another large nation that many American companies outsource manufacturing to. Unfortunately, the USTR also listed India as a member of its priority watch list. Counterfeit products and trademarks are top concerns for this country.
Counterfeit products in Indian markets, both online and in the real world, are troubling. Up to 58 percent of software and 30 percent of pesticides for sale in the country are likely counterfeit. India also makes up the origin of 55 percent of the world’s counterfeit pharmaceutical seizures.
The Indian legal system does not offer adequate means of protecting trade secrets, making it difficult for companies to guard their innovations. For those seeking redress of problems, only two courts for addressing intellectual property cases exist. While much better than in the past, this court system still requires evaluation to determine its efficiency.
The problems with India and China represent just a few of the issues medical device makers face when trying to outsource tooling of their devices or parts. You can protect yourself from the cost and hassle of overseas manufacturing without breaking your budget. The answer is to work with an American tooling company that will keep an eye on maintaining high efficiency while lowering costs as much as possible.
Partner With an American Medical Device Manufacturer
Sending your work out of the country poses too many risks. When you partner with an American manufacturer for your device needs, you can talk directly to the company representatives to outline what you need. Should any issues or questions arise, the company can quickly email or phone you during your regular business hours. In fact, you’ll want to find a company that will reach out to you with questions or concerns — that type of manufacturer puts the customer’s needs first.
When you shrink your supply chain, you’ll reduce transportation times, which can lower the shipping costs of your products. Even if labor charges are higher, the lower shipping rates can make up for the difference. Additionally, you can reduce your inventories if needed and have the manufacturer on call to create parts you need quickly. After the initial creation of dies, large-scale production of parts can occur faster than if you needed to order newly customized components every time.
If you have a proprietary brand, you can keep your information safer in America than if you had to send it to another country for manufacturing. The United States has strict laws governing trade theft and honoring patents. You’ll also be able to conduct background checks on workers with access to your protected data if they work for an American company. Because this country has strong IP laws, stealing trade secrets is difficult, and using that information at another business is almost impossible.
Clearly, American companies can solve most problems by working in America, but not all companies are the same. You’ll need to find a tooling company to suit your specific device manufacturing needs while keeping costs low by using the latest technology for greater efficiency.
Why Trust DIE-TECH for Your Medical Device Tooling?
Keeping your medical device manufacturing stateside offers you numerous benefits, but once you know you’ll work with an American company, how do you select the best one?
At DIE-TECH, we have decades of experience in metal tooling and can help you solve your problems with overseas manufacturing. For medical manufacturing solutions, we are ISO 9001:2008 certified and produce parts that have no burrs while helping you to cut costs. We helped one medical manufacturer create error-free customized stent activators that were smaller than a paperclip. The company used our stamped parts to seek FDA approval for their innovation.
When you need a company that caters to your needs, continually improves operations and adopts the newest technology, you want DIE-TECH. Get in touch with one of our experts today to see how we can help you create your medical devices while adhering to the strict regulations for such products.