when time or money spent on developing a product becomes an
issue internally. These companies provide the expertise necessary when bandwidth or monetary resources don’t exist for the
OEM, and can be quite valuable due to their specialized knowledge and dedicated teams.
Further, according to recent Advanced Medical Technology
Association and Medical Device Manufacturers Association sur-
veys, R&D investments are at a high point, due in a large part to
the suspension of the medical device tax. So far, it seems funds
not lost on the tax are being allocated where they should: to in-
novation. The surveys found:
• 83 percent of the respondents reported increased R&D
funding, or avoided reducing R&D funding.
• 33 percent invested in a new research facility, lab, or
• When asked how much they had increased their R&D
budget, the average increase was 19 percent.
Perhaps most notably, approximately 75 percent of the respon-
dents said they would make additional investments in both job cre-
ation (dedicated research and development teams, perhaps?) and
R&D activities if the device tax were permanently repealed, rather
than temporarily suspended. In short, the extra funding resulting
from the tax suspension is beginning to broaden the capabilities
of firms to use R&D time and money effectively. Though at the
moment it’s a temporary reprieve for device manufacturers, many
are already noticing the effects—beyond simply the survey results.
“Medical device R&D is growing faster than ever,” noted Jar-
ed Pack, a product development engineer for Morrisville, N.C.-
based contract design and manufacturing firm EG-GILERO.
The increased emphasis on the early-stage processes is having a
favorable impact on patient outcomes and cost of treatment as well.
“There is an ever-growing demand for higher quality and
more cost-effective devices, and being able to provide these de-
vices is a win-win for everyone involved,” Pack continued. “Better
patient outcomes means lower malpractice risk, and that reduced
cost can be carried through to the treatment cost for the patient.”
“A significant source of R&D growth has been the result of merg-
ers, acquisitions, and strategic partnerships,” illuminated José Wong,
senior director of engineering and program management for Hol-
lis, N.H.-based Farm, a full-service product development company.
“Many companies see that organic growth or in-house efforts may
be slower because of cost, company culture, and competing commit-
ments. The model is moving increasingly toward acquiring or part-
nering with other specialized groups. Product development firms are
in a great position to support organizations that need the creativity
and expertise to innovate and grow. Collaboration also reduces risk,
is cost-effective, and helps get the product to market more quickly.”
“Despite being under significant pressure from the business environment (i.e., reduced levels of venture capital funding and a high
degree of merger activity reducing the number of large OEMs), I am
Strong clinical and medical aptitude is key for translating customer needs into a successful development program. Image courtesy of Freudenberg Medical.