Switch of stakeholders`role intelligently in medtech field

The medical device industry rewards agility. Today, stakeholders like contract designers, contract manufacturer, private labeller, distributors, or investors can act as legal manufacturers by outsourcing design and production—retaining control while avoiding costly infrastructure. Here’s how to leverage this model for profit:

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1. Who Can Be a Legal Manufacturer?

 

You don’t need factories or labs. Examples include:

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• Contract Designers (startups): Outsource production but retain regulatory control.

• Contract manufacturers: there are tons of contract manufacturer places respective devices into market and produces same devices for global player

• Private labeller: This is very usual in US, as well repackager.

• Distributors: Rebrand outsourced devices as your own, managing compliance.

• Investors: Acquire designs or production partners to launch under your brand.

• Consultants: Offer turnkey regulatory services as the legal manufacturer.

 

Profit Tip: Private-label a surgical tool manufactured overseas, mark up prices by 40%, and handle post-market surveillance in-house. Be aware that legal manufacturer has liability for the device and is contact person by authority or agency.

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2. Key Requirements for Success

 

To thrive as a legal manufacturer via outsourcing:

• ISO 13485 Compliance: Mandatory for quality systems international (even if you outsource production).

• Own Technical Documentation: Control, own and maintain design files, risk reports, and clinical evidence.

• Audit Partners: Ensure suppliers meet requirements in different markets as FDA, EU MDR, MDSAP and Chinese NMPA.

 

Critical Documents to Own:

• Design History File (DHF)

• Device master record

• Design transfer (from R&D to production)

• Risk Management Report

• Quality Assurance Agreement

• Validation Reports (process/machine)

• Post-Market Surveillance Plan

 

3. Design Transfer: Bridging the Gap

 

Seamless handovers between stakeholders are key:

• From Designer to Manufacturer: Formalize workflows, inspection criteria, and change management.

• From Manufacturer to Legal Entity: Maintain traceability for materials, labeling, and non-conforming products.

 

Case Study: A U.S. startup outsourced production to Malaysia but retained DHF ownership. They achieved FDA 510(k) in 6 months and sold the device at a 50% premium.

 

4. Manufacturer registration

 

Where to have legal manufacturer is a gamp for win. Because of tax, regulatory hurdle, manpower it is worthy to seek a not strict but economic well-known countries.

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From our practise you should make sure which kind of entity is typical. In China: foreign manufacturer usually registers as a WFOE (Wholly Foreign-Owned Enterprise).

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Depending by role of stakeholders, the legal manufacturer is under monitoring by local authority.

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Where legal manufacturer registers medical device or IVD, he must register himself as in FDA besides clearance of medical device.

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Example: EU manufacturer have a subsidiary as legal manufacturer in US to escaping MDR. The production is in Vietnam and testing is done in China

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5. Profit Strategies

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• Bundle Services: Offer regulatory + distribution support for a 20% revenue boost.

• Target Niche Markets: Use outsourcing to launch low-volume, high-margin devices (e.g., custom implants).

• Monetize IP: License your design to multiple legal manufacturers in different regions.

 

Example: A German distributor became the legal manufacturer for a Chinese-made IVD kit, capturing 35% margins in the EU by managing MDR compliance in-house.

 

Key Takeaway: Outsourcing lets you focus on high-value tasks—compliance, branding, and market strategy—while partners handle production. The legal manufacturer controls the profit.a