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The medical device industry is filled with motivated medical entrepreneurs who have the next most significant concept to better human life. They have the intellectual property and need the expertise to turn the idea into a safe, viable product, often looking to outsource services such as product design and development, regulatory consulting, prototyping, sterilization, in-vitro and in-vivo efficacy and safety testing to meet their investors’ milestones for the product. Established device manufacturers also often have multiple development programs operating simultaneously that can dwarf their in-house resources, particularly in a COVID environment where cost and resources are routinely evaluated.

The key driver in choosing to outsource is usually time to market, as each day could potentially translate into millions of dollars of delayed or lost revenue and delays in getting life-saving technology to the patient. The question is not if but what, when, and to whom should you outsource to accomplish your goals both for product innovation and financial performance. As a manufacturer, understanding what questions to ask to leverage the best decision is critical for meeting your goals.

In this article, we focus on testing to review the key considerations and provide a free checklist to help you, your development team, and your management teams make an informed decision.

How to use the checklist

There are several ways you can make the checklist work for you.

You can add checkmarks to the winning column for each line item or capture costs for each option and use it as a cost calculator. You also can add more columns to capture different in-house testing options (e.g., different labs, groups, departments, locations) and outsource testing labs for a side-by-side comparison. Finally, you may decide to add line items that are essential considerations for your organization that are not already in the checklist. If you would like to share any such changes with us, we would greatly appreciate a quick note!

Top 8 considerations for in-house testing vs outsourcing

1. Urgency and Time to Market

Let’s get down to business. Decreasing the product development timeline is a key priority for every OEM. With potential delays at every corner, a proven solution to deliver reliable lead times is critical. When it comes to testing, it is not just a confirmatory step at the end to satisfy a requirement. OEMs fall into this trap all of the time and experience significant delays because the part cracked when it shouldn’t have or some acceptance criteria got missed. When time is critical, you need to know that deadlines will be met.

An outsourced testing laboratory is one good way to meet deadlines or respond quickly to that FDA response. Think about the labs’ capacity. If you have many devices that need to be tested, the lab you choose needs to have adequate capacity to run those devices in parallel to provide more data points faster. If high frequency tests are needed, your partner lab also will need test machines that can run at accelerated frequencies to reduce testing time as much as possible. In the event of project issues, is there overflow available to get this done as soon as possible and how quickly can they get on a frame?

Customers who use internal labs will often run into prioritization delays with competing projects and have limited ability (or space) to add additional resources. Projects can pile up, and hiring (then training) additional test resources is not high on the priority list. The timing aspect is one of the most significant reasons to consider outsourcing.

2. Test Complexity and Technical Expertise

Your test may be basic materials characterization, feasibility for proof of concept, full device fatigue testing for FDA submission or supplementary data needed based on device performance in patients. Testing can range from small to quite extensive projects and may require varying levels of expertise based on the type of testing. The test could be standardized and easy to perform, or new and complicated, requiring specialty expertise. Expertise is also going to play a major role for risk mitigation if things go wrong. Your R&D team might need to spend hours reading test standards, familiarizing themselves with the methodologies, or doing literature searches for best practices.

Keep in mind that you might run that ASTM F2077 program once every other year, instead of routinely having multiple frames running year-round. There is value in partnering with someone who sees the FDA feedback, is aware of upcoming specification changes, and can observe the general industry trends to prevent you from making a mistake.

If you opt for in-house testing, you will need both experts on staff who are qualified to perform the test and the equipment to perform the studies. In large studies, it is common to use several types of machines that may not all be readily available either due to competing projects or lack of capital investment. Increasingly technical projects may present additional accreditation requirements to minimize questions about calibrations and procedures from your regulatory body.

3. Personnel Opportunity Cost

Medical device manufacturers are increasingly focusing on their core competencies and outsource business activities that fall outside their areas of expertise. In other words, just because you have experts in-house who can do the test does not mean they should, as it may not the best use of their time. Conversely, in some cases, you may have underutilized resources or prior investments, and running the tests in-house makes use of those resources. However, in all cases, personnel in a specialty test lab have been specifically trained to run these tests and have years of experience performing them daily. Your team may spend unnecessary time figuring out test setups, writing protocols, or understand testing concepts that experienced operators can easily define. Aligning to the team’s strengths will allow the best usage of resources to ensure timely submission.

4. Materials, Equipment, and Testing Cost

When making decisions about insourcing vs. outsourcing, medical device manufacturers usually compare the costs of performing the testing in-house and in an external test lab. Outsourcing costs are easily obtained by requesting quotations from contract test labs. In-house testing costs usually have more parameters to consider:

• Will major equipment and test accessories (such as fixtures, sensors, etc.) need to be purchased? How long will that take and what does is the opportunity cost?


• Will fixtures need to be machined?


• What are the costs of using facilities and equipment? What is the contingency plan for staffing or equipment issues?


• What are the costs of technicians’ and/or engineers’ time spent training with and calibrating the equipment, setting up and performing the test, and performing data analysis and report writing?

Other supporting considerations: 

1. Intellectual Property and Confidentiality

Your intellectual property (IP) is a significant component of your competitive advantage. The device design, test protocol, and data generated need to be kept confidential. Does the test lab you are considering have a quality policy that deals directly with confidentiality? How is that quality policy enforced?

While your IP is protected through your own registered patents, IP protection also should be explicitly covered in your contract NDA with an external lab. Choosing a reputable, experienced lab with a history of successful projects for their customers may reduce any potential confidentiality issues.

2. Quality and Regulatory Compliance

Data and results are essential – they form the basis of business decisions, some testing data are so critical that their accuracy can directly impact business viability. For high-impact testing, the requirement for quality and unbiased test results is key and reassures both internal (e.g., management) and external (e.g., FDA or other regulatory bodies) stakeholders. Compliance with quality regulations, regulatory guidance documents and industry standards is expected, and testing experience fills in the knowledge gaps when not everything is spelled out clearly in a guiding document.

In addition, you can’t talk about quality without reviewing the appropriate accreditation. Many internal labs are not accredited to ISO 17025 or to specific methods. This can create a risk when regulators start probing data reliability or calibration information like uncertainty budgets, especially in countries like Japan. Using an accredited laboratory with brand recognition and specific expertise can help mitigate risk from quality, third-party support, and technical perspectives.

It is common to hear, “we have an Instron in the basement that we can use,” and sometime later, the testing is being repeated at an external lab because of some reliability concern or quality issue. If you know you are going to Japan, for example, often there are dedicated processes to deliver data in the right formats as you go, rather than retroactively putting in substantial effort to figure out what was done 6 months ago in the basement. Differentiating clearly between quick and dirty feasibility or R&D style and submission testing is also critical.

3. Control and Communication

In-house testing should offer a more significant opportunity for tighter project control and team communication than external labs, unless testing is performed in remote lab locations. If close test supervision or monitoring is critical for project success, only consider external test labs that are genuinely open to collaboration and encourage your participation for device deployment, inspections, troubleshooting, etc., in person or via remote access means.  Establishing communication parameters is key, especially if you are used to running downstairs every 30 minutes to check on progress. Labs can be different in preferred communication and updates, so asking questions about those communication parameters is critical. Also, feel free to ask if a customized solution is needed!

4. Management Preferences 

You and your management team may have a preference on where the testing should take place. Perhaps you have invested significant capital in an in-house lab or you have worked with a particular contract test lab for a long time and trust their services. Take these preferences into account, and make sure you are taking a step back and evaluating past choices, especially when handling a high-stakes test project. Sometimes, the financial situation will drive the decision, but you need to understand short-term versus long-term risk. The cheapest solution may not be the cheapest solution anymore if the testing needs to be repeated. Lead time and equipment availability is often a driver in these decisions, and it becomes attractive if the lead time can be pulled in. In these cases, look at the quality considerations and legacy data. Was this a custom test or standard test (which can also have variability), and what is the risk of transferring the method? The lead time or cost differences may not justify the risk of not aligning to past acceptance criteria.

Summary

With these considerations, it quickly becomes clear that the decision between in-house testing and outsourced testing is not always an easy one to make, especially during the COVID pandemic where costs and resources have to be juggled, especially when capital is involved. We encourage OEMs to openly have these discussions and explore possibilities for results. At ÌìÃÀ´«Ã½, we have grown with our customers in solutions where they outsource all of their work, but also partner with in-house labs for overflow or custom project capacity. Furthermore, in this new environment, ÌìÃÀ´«Ã½ also has experience in partnering long term with customers to manage and run their internal laboratories and leverage our years of experience. R&D solutions where customers truly partner with us also exist, and we serve as an extension of how you would run things internally. As you evaluate the next steps for your testing project, feel free to reach out to discuss options!

Download our checklist to guide your research and comparisons so you can make sound decisions for your test projects.

ÌìÃÀ´«Ã½ as a trusted medical device testing partner

With ÌìÃÀ´«Ã½ as your comprehensive medical device testing partner, you’ll enjoy the benefit of a single-source supplier for all of your testing needs, from feasibility and R&D to product development and production quality control.

For more information about how we can assist with your medical device testing project, contact us today.