Contract Manufacturing of Medical Devices in Asia

More and more medical device companies are making their products in Asia via contract manufacturing, joint ventures or setting up their own shop. Contract manufacturing is an efficient means by which medical manufacturers can utilize production facilities already available in Asian countries. Medical companies are thus able to focus their budget on research and development rather than investing money in the establishment of manufacturing facilities. Recently, many medical device companies have chosen to subcontract their manufacturing to local Asian manufacturers.

For example, Medrad, a U.S. affiliate of Schering AG, Germany, announced in mid October 2002 that 5% of the company’s syringes would be manufactured in Dong Guan in Guangdong, China. The syringes manufactured by Vincent Raya (Dong Guan) Electronics Company are used in medical imaging procedures. Medrad, with its company headquarters in Indianola, Pennsylvania, has spent over 18 months working together with Vincent Raya to assist them in designing and building a class 100,000 clean room facility, training local Chinese employees, as well as implementing quality standards similar to Medrad’s own manufacturing facilities. Medrad’s president and CEO, John Friel said, “We expect continued growth in both domestic and international manufacturing as Medrad develops new, innovative products to help physicians identify illness faster and even more accurately, which will ultimately improve treatment outcomes.”

In Malaysia, foreign medical companies that have already established their operations in Asia are also able to act as subcontractors and provide manufacturing services to other third party foreign companies. In early 2002, Agilent Technologies Inc. announced that it would provide Light Sciences Corporation with optoelectronic design and fabrication services through their manufacturing facilities in Penang, Malaysia. Light Sciences Corporation, a privately owned company based in Seattle, Washington, is a pioneer of photodynamic therapy for cancer, eye, and cardiovascular disease based on Light Infusion Technology ™. Agilent Technologies Inc. will assist Lights Sciences Corporation in developing and manufacturing new light emitting diodes (LEDs) for use in the Light Infusion Technology ™.

In June 2002, Philips Electronics (Bangkok, Thailand) celebrated 50 years in Thailand. The company has been expanding its presence in Thailand since 1952 and has been producing products such as medical systems, personal care products, and consumer electronics for domestic and foreign consumers. Philips Electronics (Thailand) Ltd. now employs over 5,000 employees in Thailand and continues to formulate plans for further expansion. The company stated that when it entered Thailand, its intentions were not only to enter the Thai economy, but also to tally integrate itself into Thai society.