Medica 2025: vertical integration gains importance for medtech OEMs

There is growing demand from original equipment manufacturers (OEMs) for contract manufacturing partners that are vertically integrated, according to a medical device manufacturer.

Sonoco Plastics, a division of packing manufacturer Sonoco, is a contract injection molding, assembly and packaging service provider to the medical device industry. Kevin Ludlow, the company's strategic business development manager says that vertical integration is proving to be a strategic differentiator in the market.

Ludlow made the comments during a conversation at the MEDICA convention, taking place in Dusseldorf, Germany between 17-20 November.

Some contract manufacturers now offer vertically integrated solutions - covering design, cleanroom assembly, packaging, and global distribution - because OEMs increasingly value full‑cycle partners.

“We're seeing an increasing amount of large medical device OEMs that are looking for partners such as ourselves who are vertically integrated, from start to finish,” Ludlow said.

Ludlow’s comments reflect broader medtech industry research on current trends. A 2025 report by McKinsey highlighted that many companies involved in the medical device industry continue to be in the process of resetting their manufacturing and supply chain cost base and returning to the discipline of “continuous cost optimisation” following the dislocations caused by the Covid-19 pandemic.

According to Alira Health’s 2025 Global Medtech Contract Development & Manufacturing Report, vertical integration is a main strategic driver of M&A activity. The report notes that acquirers targeted core competencies such as design & development and assembly services, followed by machining services.

Meanwhile, a report by contract development and manufacturing organisation (CDMO) Intricon highlights that OEMs are shrinking their approved supplier lists; in essence moving to make their supply chains less fragmented and more certain – one option of which is to partner with manufacturers who can offer vertically integrated services.

Ludlow continued: “A lot of the large medical device OEMs want to focus on design, development, and the sale, marketing, and selling of their finished devices.

“Therefore, speed, time to market, and cost are all likely to be key evaluative metrics surrounding the increased interest in vertical integration that we have witnessed in recent years.”

"Medica 2025: vertical integration gains importance for medtech OEMs" was originally created and published by Medical Device Network, a GlobalData owned brand.

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