Outsourced R&D has become a necessary strategic tool in medical device development instead of merely a capacity supplement. When it’s used effectively, it lets device makers de-risk innovation, accelerate timelines, and maintain flexibility in rapidly evolving regulatory and technological environments.

Enlisting an R&D partner involves hiring specialized third-party firms for activities like design, testing, regulatory compliance, and manufacturing support. It allows companies to reduce costs, speed time-to-market, access expertise, and manage risk by utilizing external capabilities and remaining current with rapidly evolving technologies.

Successfully transitioning from R&D into manufacturing remains one of the most challenging aspects of medical device development. This strategic partnership helps to focus internal teams on core innovation while ensuring high-quality, compliant product development, a trend that’s growing because of the medical device industry’s digital transformation and global market pressures.

Parts or the Whole

The medical device industry is quite diverse, addressing a wide variety of clinical needs that necessitate an equally broad range of competencies.

“Customers that seek R&D services range from startups to Fortune 500 companies,” said Karthik Ranganathan, Ph.D., chief business officer at NOVO Engineering, a San Diego, Calif.-based provider of product development engineering services to medtech and life sciences companies. “Therefore, the services that customers seek are also diverse, ranging from specific technical competencies needed to complement internal teams all the way to full, turnkey product development for customers without a large internal staff.”

Each client and product is different—the first step is to understand the specific challenge a client is aiming to solve. That way, R&D providers can bring together the right team with the right mix of skills and experience to solve it.

“While purchasing professionals like the idea of a vertically integrated supply chain and working with a single supplier, R&D leaders at OEMs would prefer to talk to subject matter experts (SMEs) who can solve the most challenging designs or application cases,” said Dharm Patel, director of engineering, new product development at Wytech, a Rahway, N.J.-based manufacturer of precision medical wire and stainless steel tubing components.

The breadth of R&D services being outsourced depends on the customer’s development journey and their device’s complexity. Many utilize outside partners for targeted needs like early feasibility prototyping, verification planning, human factors, or regulatory strategy—especially when aiming to de-risk a certain milestone or funding event.

At the same time, there’s a growing preference for fewer, more strategic partners who can be accountable through development and into manufacturing. This is especially true for more complex, higher risk programs. A flexible model is key so customers can leverage end-to-end design, development, and manufacturing capabilities, or they can selectively engage for specific workstreams.

“Internally, we think about projects in tiers,” said Mike Perillo-Gentile, chief commercial officer at Cordica Medical, a Knoxville, Tenn.-based provider of end-to-end solutions for advanced medical device design and manufacturing. “A Tier 1 engagement may be a multi-year PMA-level program where we execute end-to-end design controls and support clinical and regulatory submissions. A Tier 4 engagement may be much narrower in scope—early feasibility prototypes, focused engineering studies, or targeted regulatory consulting. That flexibility allows us to meet customers where they are, while still supporting long-term scale when they are ready.”

Some customers do seek end-to-end product development support, from early user needs and specification through to concept generation, detailed design, and verification and validation. But more often, clients use an outsourced R&D partner for targeted support in a broader development program.

“Sometimes, we offer engagement at several different points throughout the development process,” said Jesse Carlson, VP of sales and marketing at Resolution Medical, a Fridley, Minn.-based company that designs, develops, and manufactures complex products like catheter-based systems, implantable devices, and custom components. “Concept, formal PDP development, new product introduction (NPI), clinical builds, and full manufacturing. My job is to engage with clients, so we always have the correct number of clients in all these business units. Some clients only need one prototype in our concept group, while others look for help with full scale low-medium-high volume clean room manufacturing and don’t have a need for anything design related.”

The company’s LifeTec BioSimulation technologies involves using its lab for a study as a service. Using the lab this way is usually the first step, then clients can lease the simulators after familiarization during one or more experiments at its lab. A lease agreement runs from a minimum of three months and allows the customer to use the system at their own lab whenever they need. The tech can also be purchased to support longer running experiments at the client’s own lab.

Many engagements begin with focused engineering support before transitioning into later-stage prototyping or manufacturing scalability. An effective design services organization—internal or external—has the necessary capacity, capability, and flexibility to support its customers.

“We primarily work with physician-inventors who have an initial concept and want to transform it into an FDA-cleared medical device,” said Stephane Gobron, president of Medical Device Innovation Corp., an Irvine, Calif.-based management consulting firm for medical device companies. “These engagements typically span the full breadth of R&D—from early concept development and prototyping through verification of functional feasibility—until the first major milestone is reached: a validated working prototype. At that stage, clients generally choose between two paths: securing intellectual property and licensing or selling the invention to an established medical device company, or continuing development as a startup venture. In the latter case, we support business planning and fundraising efforts, beginning with friends and family or angel investment rounds to advance the device toward FDA clearance and prepare for larger financing rounds.”

Established companies of all sizes, on the other hand, usually look for targeted, project-specific support. Their engagement focuses on a defined need instead of full-cycle development. This is to most commonly resolve technical challenges, offer design or regulatory expertise, or lead project management for specific development phases.

The Goals of an R&D Partnership

Most clients looking to an outside firm for R&D services share the same goal—to successfully bring a medical device to market. The reasons for outsourcing R&D services as part of the process can vary, however.

“A common driver is reducing risk around the technical, usability, or regulatory aspects of taking that device to market,” said Mike Quinn, VP of design and development North America at Ensera Design, a design consultancy focused on market-ready medical, pharmaceutical and consumer health product innovation. “Achieving this requires ensuring the voice of the user is included throughout development to ensure that device is safe, intuitive, and effective in real-world use.”

For some, the decision to outsource arises from gaps in the company’s internal expertise. For example, a team might develop core electronics and firmware under their own roof, but need support with industrial design, mechanical housings, or human factors validation. Others outsource because of constraints on internal bandwidth, especially when timelines are aggressive or multiple programs are going simultaneously.

Outsourcing R&D enables device makers to move more quickly without committing to permanent headcount or capital investments. It helps to unearth technical and regulatory risks earlier in the development process when they’re still manageable, instead of later on when they become more expensive.

“It’s about time and focus. Smaller companies usually need access to experienced engineers and facilities they haven’t built yet,” said Eddie Anderson, VP of product development at Switchback Medical, a N. Brooklyn Park, Minn.-based partner for innovative medical device prototyping, development, full program management, and manufacturing. “Larger organizations often have those capabilities, but they’re stretched thin or moving slower than the project demands. Outsourcing gives them a way to move faster without committing to permanent headcount or capital investments. Just as importantly, it helps surface technical and regulatory risks earlier, when they’re still manageable rather than expensive.”

One important dynamic to note is the transition from R&D into manufacturing. This is often where programs succeed or struggle—early design decisions directly impact yield, validation timelines, and supply continuity. Customers are increasingly seeking partners who can make those decisions with scale in mind from the project’s first day.

“Small projects can divert attention from larger, high-value initiatives,” said Ralph Cardinal, SVP of technology at Quasar Medical, a St. Paul, Minn.-based CDMO that delivers minimally invasive medical devices and components, including catheters, medical balloons, and EM-micro sensors. “Leveraging resources for a specific part of the project can offer flexibility, as they do not need to be retained after the project concludes. Cost savings for various tasks are another benefit, achieved through testing and verification in lower-cost R&D regions, such as Costa Rica and India.”

A firm providing R&D services will be enlisted for their specialized knowledge the customer doesn’t have—for example, materials processing. Specialized biomaterials, for instance, is a multidisciplinary field that encompasses design, development, and application of materials engineered to interact with biological systems.

This expertise is critical to create a wide range of medical devices and therapies, from implants and diagnostic tools to advanced tissue engineering.

“Processing Poly-Med’s high-performance absorbable biomaterials into precise components requires deep material science, processing, and device-level manufacturing expertise,” said Corey Seacrist, manager of sales and marketing at Poly-Med, an Anderson, S.C.-based developer of high-performance absorbable biomaterials and implantable medical devices. “Most OEMs are reluctant to invest in the infrastructure and process know-how needed to handle these materials reliably, given the significant time, cost, and cGMP requirements involved.”

Intellectual Property (IP) Management

IP management in the R&D stages is the strategic process to identify, protect, and leverage innovations from research to align with business goals. It involves R&D teams, IP experts, and tools to capture ideas, secure patents and trade secrets, manage portfolios, and enable commercialization.

This ultimately drives investment and competitive advantage. The strategy aims to move beyond simple filing to embedding IP strategy within the innovation lifecycle for better outcomes.

“Our philosophy is straightforward: If the customer funds a device’s development and specifications, they should own that innovation,” said Perillo-Gentile. “Device designs, specifications, and project-specific deliverables developed for the customer belong to the customer.”

“At the same time, we are careful to clearly define background IP on both sides. We retain ownership of its pre-existing methods, tools, and manufacturing know-how, while the customer retains theirs,” Perillo-Gentile went on. “Agreements are structured so customers have the rights they need to commercialize and scale their product, while both parties’ core intellectual property is protected. This clarity upfront allows teams to move quickly without ambiguity later in the program.”

There are multiple ways intellectual property can be handled. Typically, details on the approach to manage IP and ownership are decided at the very early stages of the relationship between the client and outsourcing provider. This includes documentation with signed agreements.

“If the client has a specific idea and needs to have it brought to life through 3D, models, detailed drawings and prototypes, the client owns the IP, and we serve as the work for hire,” said Victoria Trafka, president and principal engineer at Engineering & Quality Solutions, a Colorado Springs, Colo.-based consulting firm that supports medical device projects. “In other cases, we work together to craft a new design with novel features and then the IP is shared between us and the client, according to the signed agreements. This is why it’s very important to work out these circumstances before any design activities begin, and to discuss IP regularly.”

For idea capture and evaluation, submissions should be encouraged using specialized search tools to find patentable areas and assess potential value early in the R&D process. There should also be a unified approach where IP goals directly support business objectives, in order to ensure that R&D focuses on commercially viable innovations.

“Where appropriate, we support clients in documenting and protecting new IP, including contributing to patent drafting when innovations arise during development,” said Kerry Briggs, VP of design and development Europe at Ensera Design. “We do not develop proprietary IP independently of client projects, which provides clarity and confidence for clients engaging in external R&D support.”

For protection and enforcement, clients should file patents, trademarks, and copyrights to enforce rights against infringement, often using IP management software. IP managers working closely with R&D teams can provide intelligence and keep them informed throughout the development process.

“Most customers approach us with existing intellectual property or established design concepts centered on the intended medical device,” said Seacrist. “We then develop and manufacture the implantable device using Poly-Med’s proprietary biomaterials and specialized processing capabilities. Poly-Med’s intellectual property portfolio primarily centers on novel materials, polymer architectures, and unique processing techniques that enable specific performance profiles.”

Cyberattacks targeting IP involve stealing valuable digital assets like trade secrets, designs, and research for economic gain, competitive advantage, or espionage. These attacks exploit digital vulnerabilities to steal data, which can lead to counterfeit products, lost revenue, and long-term damage.

This necessitates robust cybersecurity measures like encryption, access controls, and employee training to protect the crucial assets.

“IP security should be managed in a way that mirrors how the customer would handle it internally,” said Cardinal. “This requires IT systems to be resilient against cyber-attacks. We establish clear IP ownership between the company and the customer, diligently keep projects separate to prevent cross-contamination of IP, and use strong contractual language to protect both parties. Additionally, confidential data, including products, drawings, and related information, must always be handled securely.”

Medtech’s Digital Shift

The digital shift in medical device manufacturing has rewired engineering and R&D in several ways. It began with adopting digital modeling and virtual prototyping, which allowed quicker concept development and reduced risk in early-stage development. Online professional networks then expanded, broadening access to specialized expertise.

This has led to more niche models of consulting that lets companies quickly engage the skills needed for specific technical challenges.

“The digital shift has not fundamentally changed the types of problems clients ask consultancies like ours to solve, but it has significantly raised expectations around how medical devices function and how users interact with them,” said Briggs. “Digital interfaces, connectivity, and software now play a major role in usability and safety, whether devices are used by patients in the home or clinicians in healthcare settings. Getting this right can improve outcomes and enable patients to take a more active role in managing their care.”

The digital shift has changed what customers expect from a design and development partner. More programs are involving connected devices, embedded software, sensors, and data flow. This requires closer integration across mechanical, electrical, software, and systems engineering.

Clients are beginning to change their workflows and allocation of resources because of the trend of using more digital solutions. One item that is receiving more adoption is the use of digital quality management systems (QMS).

“They are changing what were solidly paper based systems to digital for all items or documents as possible—no more paper forms to fill out, sign, and store,” said Richard Brown, VP and principal engineer at Engineering & Quality Solutions. “The system moves the documents through the processes, collecting feedback and signatures as needed. It also centralizes the repository for all documents, reducing the silos of engineering, document control, purchasing, etc., having their own file cabinets full of documents—or even their own digital drives holding documents that other areas need access to perform their portions of the work. This allows for easier retrieval of any documents utilized by cross functional teams.”

The medical device industry’s adoption of new technologies and approaches tends to lag behind consumer markets and other industries because of both patient safety risk and regulatory oversight.

However, artificial intelligence (AI) tools have made their way into the medical device R&D landscape. AI can revolutionize medical device design by accelerating innovation, personalizing products, and improving outcomes through data analysis, generative design, digital twins, and predictive modeling.

This can enable faster prototyping, optimized performance, and adaptive learning from real-world use, while navigating new regulatory frameworks.

“More recently, integration of AI tools has further transformed outsourced R&D by automating routine and lower-value tasks, shifting the focus toward higher-impact, innovation-driven work,” said Gobron. “This latest phase represents the most dramatic acceleration of change to date: Adoption has been rapid, development cycles are compressing, and organizational agility has become essential to maintaining competitiveness in an increasingly fast-evolving landscape.”

AI creates thousands of optimized design concepts based on clinical needs, materials, and performance constraints to reduce manual iteration. It can predict performance, material durability, and potential failures before physical prototypes are built.

“A lot of organizations are actively evaluating opportunities to leverage AI,” said Ranganathan. “This includes driving internal efficiency as well as creating new value in clinical applications. In seeking to accomplish the above objectives in a rapidly changing technical context, companies find it hard to acquire and maintain talent with the relevant skillsets and may therefore seek service providers who can quickly deploy the relevant capabilities. However, they also recognize that directly acquiring and controlling these skillsets are critical to successfully competing in a crowded marketplace, and so they are also keen to own these competencies. Successful enterprises will find a balance between owning the most sensitive and differentiating elements while outsourcing others.”

Digital twins involve using virtual models for rapid simulation, testing, and optimization of complex devices. AI also automates testing protocols and helps generate regulatory documents to streamline submissions.

“It’s made collaboration faster and more practical, especially for distributed teams,” said Anderson. “Digital design tools let us review concepts, make changes, and test ideas without waiting for physical builds at every step. Internally, we’ve also leaned into digital tools—including AI—to streamline documentation, manufacturing workflows, and design reviews. That’s less about buzzwords and more about reducing friction and keeping projects moving.”

The most productive partnerships operate as extensions of a company’s organization. They’re aligned on goals, transparent in communication, and focus on delivering milestone-based outcomes. As development complexity grows and digital tools continue to transform, outsourcing relationships that emphasize collaboration, agility, and long-term creation of value will play a significant tole to bring safe, effective medical devices to market efficiently.

“We like to say that we supply data with a component, meaning that traceability, capability analytics, and demonstrated process control are the hallmarks of the 21st century manufacturing company,” said Patel. “This is what mature products require and what must be developed during the R&D cycle.”