Medical Device Design, Development, and Manufacturing: Considerations when Selecting a Strategic Partner

August 21, 2016 - Jim Reed, Vice President, Business Development and Marketing

Historically, the typical approach to medical device start-up development was to build an internal team of employees. This team completed assigned major development milestones, and following this success, management downsized them. Known colloquially as the “Hire, Develop, and Fire Model”, this approach is not only tumultuous and expensive, but it results in a loss of continuity and key core knowledge and know-how. It also presents challenges in managing spiky, episodic workloads with a team of a fixed size.

Thankfully, a huge structural change has occurred in the start-up and operating company world over the past 20 years. This change is the emergence and evolution of design, development, and manufacturing strategic partners. Such partners have proliferated in a field where building up and maintaining systems, infrastructure, and a team with the right set and breadth of skills is very capital-intensive and time-consuming.

In fact, the array of options and the complexity of that landscape may pose a bewildering challenge for many companies in search of a strategic partner. Regardless, the overall situation is positive, as the breadth of competing vendor solutions means that there are suitable partners for almost any medical device company’s situation.

These design, development, and manufacturing strategic options fall into five general categories:

  1. Individual Design Consultants
  2. Consulting Groups
  3. Design and Development Companies
  4. Contract Manufacturers
  5. Integrated Design, Development, and Manufacturing Companies

Just as no single tool is good for every job, all of these partner options have pros and cons dependent on the start-up or operating device company’s situation. Breaking them down individually, the relative trade-offs could be summarized as follows.

Individual Design Consultants

The typical best use of individual design and development consultants is for “quick and dirty” proof of concept development where early-stage capital conservation and fast execution of concept work are top priority. In such early feasibility or prototyping work, documentation, repeatability, and technical continuity may not be required.

Individual consultants offer many benefits. Talented individuals can be very decisive and time-efficient, with low cost due to the absence of any significant overhead. They are also often able to work quickly, unencumbered by systems.

However, use of individual consultants has its downsides. They can require substantial management/coordination by the device company. By definition, they only offer a single engineering perspective. Their lack of systems can mean that documentation and/or a systematic approach may be lacking. And since they are individual non-employed contributors, they can easily vanish for a different opportunity, leading to a loss of continuity.

In short, individual consultants are often a great technical pathway to proof-of-concept systems or prototypes, but they often cannot guide the customer beyond that point.

Consulting Groups

The typical best fit for consulting groups (CGs) is similar to that of individual consultants: “quick and dirty” development requiring early-stage execution of concept and design work. They are typically well-suited to early feasibility or animal work where documentation, repeatability, and continuity may not be required.

The pros and cons for CGs are essentially the same as for individual consultants. However, depending on the size of the group, they are able to take on larger projects and manage them further than individuals can. CGs may also provide access to a wider range of specialties and enable better continuity. That said, they are typically more expensive than solo consultants given their overhead requirements, even though they are simply amalgamations of individual consultants.

Design and Development Companies

The typical fit for dedicated design and development companies (DDCs) is the development of simpler products, often only for clinical studies, where manufacturing readiness, product reliability, or regulatory preparedness might be less important.

The size, sophistication, and skill set ranges of DDCs are highly variable. Regardless, they are a very reasonable solution for certain design and development challenges. They are generally more systematic than consulting groups and often have greater diversity of technical experience and depth with better continuity. DDCs are also agnostic regarding the selection of the eventual manufacturer and can offer unbiased advice on the subject.

A significant downside of DDCs is the fact that these organizations do not manufacture products and never own real-time feedback loops after design is complete. They are not directly involved with long-term production and maintenance of the products they develop. Design for manufacturability (DFM) generally does not become ingrained in DDCs, and the resulting product designs often require substantial redevelopment or remediation prior to full commercialization.

Contract Manufacturers

Contract manufacturers (CMs) are a good fit for products in which manufacturing is the key driver. These firms typically only do development work to obtain long-term manufacturing. CMs are generally less interested in providing ongoing technical support for customers unless they can drive short or medium-term manufacturing volume. However, they do tend to have quite sophisticated supply chains and are very solid and methodical manufacturers.

One common downside to the CM business model is the limited degree of operational flexibility they can offer. CMs generally have systems, organizations, and facilities optimized to specific volume levels and process flows. Products or customers that vary from that optimal situation are problematic. Interestingly, the growth and capital requirements of the very largest CMs mean that they periodically have to rid themselves of customers that are unable to provide the originally-planned volume. This is an eventuality that start-ups and operating companies should include in their contingency planning.

Integrated Design, Development, and Manufacturing Companies

Integrated design, development, and manufacturing companies (ICs) fit a fairly diverse range of projects and can accommodate device companies across multiple phases of their business life cycles and growth. An IC focuses on acting as a single partner to reliably take requirements, early prototype, or clinical units all the way to commercialization. They generally offer the benefits of a design and development firm as well as those of a contract manufacturer.

ICs typically live with real-time manufacturing-to-develop feedback loops, and thus they tend to be DFM-oriented and systematic in their design and documentation approach. Having an integrated partner also allows customers to minimize or avoid conflicts between developers and manufacturers, who may point to each other when issues arise. The best ICs can also act as virtual extensions of one’s organization and Quality Management System (QMS), managing design history files and even fielding topics specific to FDA, CE, and acquirer diligence audits.

ICs do, however, tend to be poorly suited for very early proof-of-concept units and early prototyping. Their systems and processes, as well as their orientation toward product robustness, often optimize total product cost over time. However, they are typically not the optimal time and cost solution for “quick and dirty” prototype work.

Selecting the Best Partner

Commonly, device firms spend substantial time considering which type of development partner best suits their specific needs. Weighing the options is both daunting and difficult because direct comparisons are nearly impossible, given the wide array of services and differentiating value each presents.

With the diversity of partner choices, device companies should start by considering project objectives and what – if any – value might be lost in each potential contract scenario. Do they need specific consulting services from an expert, or do they need the ability to ramp up/down a large-scale team based on demand? Device companies should consider the value of relative trade-off decisions they will have to make throughout the project. Talking to a small sampling of potential partners typically clarifies what type of strategic partner is best suited to deliver the project goals.

For example, a smart individual design consultant may be able to quickly and inexpensively create a crude but completely functional proof-of-concept device. But documenting the process may not be part of the package, and information may not be easily transferable. A good contract manufacturer may be very good at manufacturing but may be unpracticed (or even uninterested) in ongoing product upgrades, improvements, and support. An integrated design, development, and manufacturing partner offers a systematic, high value, one-stop solution, but may be unsuited or uninterested in very early-stage concept bench work.

Regardless, being spoiled by a range of good strategic design, development, and manufacturing partner choices is one of the best problems one can have. Two decades ago, deciding between partner choices was generally not a challenge. Excellent options either did not exist, or existed in much less refined and evolved forms. Today, being mindful of one’s objectives and preferred trade-offs and talking to a variety of potential partners should quickly make the right solution category apparent.