Life sciences and biotech startups are thriving and many are going public. Some of these companies are in the business of creating medical devices. Entrepreneurs and businesses that would like to tap into this market should consider several factors before they do so, specifically, regulatory requirements and production capacity.
According to an article in Pittsburgh Business Times, an important element in creating a new medical product is a regulatory strategy. Where a business wants to take its product influences how it should be marketed and created. Will it be for consumer or physician use? What kind of approval will be necessary from the U.S. Food and Drug Administration? These questions can reveal how much of a lead time a company can expect between production and sales. The publication recommends such a plan include the device's intent, benefit and target audience in order to align all stakeholders around the common goal of making the best possible product.
Another important consideration in creating new medical equipment is where and how it will be manufactured. U.S. companies should consider manufacturing in Mexico for cost savings, which can create greater financial flexibility to develop yet more innovative products. Medical device manufacturing in the country is growing precisely because it is inexpensive compared to other popular manufacturing destinations. In fact, a study by Boyd Company found it is nearly half as costly to operate in Mexico as it would be to operate in Palo Alto. This is incredibly valuable for all businesses, and startups in particular, which often need to watch their growth capital very closely.
To reduce manufacturing costs, medical device companies should give serious thought to expanding to Mexico. Through shelter companies, this need not be more complicated than opening a new factory domestically. Most of a company's efforts should be devoted to creating the best product possible; energy put into navigating regulations and foreign recruitment without the aid of an offshore shelter would be better spent in creating the next great medical device.