Bringing a new medical device to market is challenging – especially for early-stage startups balancing innovation with regulatory compliance. One concept that often trips up founders is the “Legal Manufacturer” in medical device regulations. What is it, and should you consider outsourcing that role to a specialized partner?
In this article, we explain the medical device legal manufacturer concept and dive into key considerations, pros and cons of using a third-party, how regulatory approval works if you outsource, and which types of products fit this model best. If you’re a medtech founder looking to accelerate your path to market, read on!
What Is a “Legal Manufacturer” in Medical Devices?
In regulatory terms, the legal manufacturer of a medical device is the entity legally responsible for the device’s design, production, labeling, and compliance. This is the company name that appears on the device’s label as “Manufacturer” and carries the obligations for meeting safety and regulatory requirements. Importantly, the legal manufacturer ensures the product meets all applicable regulations (EU MDR, FDA, etc.) and maintains the technical documentation and quality system. This entity might or might not be the one physically producing the device.
For example, a startup might outsource actual fabrication to a contract manufacturer, but if the startup’s name is on the label, the startup is the legal manufacturer and remains ultimately responsible for compliance. Being the legal manufacturer means implementing a compliant Quality Management System (often ISO 13485) and handling tasks like device registration, vigilance reporting, and audits. It’s a significant undertaking, which is why some companies choose to outsource the legal manufacturer role to a specialized third party.
Why Consider Outsourcing the Legal Manufacturer Role?
Early-stage medtech companies often face a dilemma: Should you build your own regulatory infrastructure to become the legal manufacturer, or partner with an established firm that can do it for you? Outsourcing the legal manufacturer role means a third-party company essentially acts as the official manufacturer of your product. Firms offering this service maintain a “plug-and-play” ISO 13485 quality system and will add your device to their system, taking on the compliance burden (and often the manufacturing or supply chain) on your behalf.
This approach can be attractive for startups because it leverages the partner’s existing expertise and certifications. In practical terms, an outsourced legal manufacturer can handle many operational and regulatory tasks – from setting up compliant production and supplier management to keeping the technical documentation updated – while your team focuses on R&D and product design. Companies like these have experience successfully certifying multiple devices under their quality system, which can shorten your time to reach the market.
However, outsourcing such a crucial role is a big decision. Below we outline key factors to weigh when deciding whether to outsource.
Key Considerations Before Choosing to Outsource
Before handing over the legal manufacturer responsibilities to a third party, consider the following:
- Partner’s Quality and Compliance Track Record: Rigorously evaluate the outsourcing partner’s quality management performance and regulatory credentials. Do they have a strong history of quality assurance and relevant certifications (ISO 13485, FDA registration, etc.)? An experienced partner should have proven procedures and past audits to show they can maintain compliance for your type of device. For example, ensure they have established SOPs, supplier controls, and prior successful regulatory approvals in place.
- Alignment of Goals and Communication: Your values and strategy should align with the partner’s. Since you’ll collaborate closely, make sure the partner is committed to your success and clear communication channels are established from the start. Effective coordination is essential to ensure product quality and regulatory compliance when responsibilities are split between two companies. You’ll need defined processes for design reviews, change control, and issue resolution so nothing falls through the cracks.
- Intellectual Property Protection: Your device’s design and technology are your crown jewels. When engaging a third-party legal manufacturer, have strong agreements in place to protect your intellectual property (IP) and confidential information. Be clear on who owns the design files, how data is shared, and that the partner cannot use your IP beyond the scope of your project. A trusted partner will understand these concerns and work with you to safeguard your innovations.
- Cost vs. Benefit: Outsourcing can save you the expense of building a full in-house QMS and manufacturing capabilities, but it comes at a price (service fees or a share of product revenue). Weigh the upfront and ongoing costs of the partnership against the investment you’d otherwise make in facilities, quality personnel, and regulatory consultants. Often, outsourcing reduces capital expenditure (no need for your own factory or extensive audits), but be sure the business model (e.g. fees structure, minimum volumes) makes sense for your stage and funding.
- Control and Flexibility: Consider how much control you are willing to cede. Outsourcing the legal manufacturer role means another company will be the one named on regulatory filings and product labeling, which can feel like a loss of control. Ensure you’re comfortable with the level of influence you’ll retain over decisions. Also plan ahead: if your long-term strategy is to build in-house capabilities or if an acquisition could change plans, clarify how you could transfer the legal manufacturing responsibilities later if needed.
By carefully evaluating these aspects, you can determine if outsourcing aligns with your startup’s needs and set the stage for a successful partnership if you proceed.
Pros of Using a Third-Party Legal Manufacturer
Many small and mid-sized medtech firms have benefited from outsourcing the legal manufacturer function. Here are some key advantages:
- Faster Time-to-Market: Leveraging an established legal manufacturer can significantly accelerate your path to regulatory approval. The partner likely already has a working quality system and relationships with regulators or Notified Bodies. This means your device can be slotted into a pre-certified framework, avoiding the lengthy process of building a QMS and obtaining approvals from scratch. In fact, using an experienced outsourced manufacturer has been shown to “shorten time to market” by splitting roles and using their ready infrastructure.
- Focus on Core Innovation: Handing off operational and compliance burdens allows your team to concentrate on what you do best – innovating. Startups often have limited manpower; outsourcing means you spend less time wrestling with paperwork, audits, and supply chain issues, and more on R&D, product refinement, and clinical validation. In short, your internal team stays focused on the science and engineering, while the partner handles the regulatory mechanics.
- Access to Expertise and Infrastructure: A third-party legal manufacturer brings seasoned regulatory and manufacturing expertise to your project. They’ve likely gone through multiple CE marking or FDA submissions and know the pitfalls to avoid. Their quality team will implement standards compliance, and they manage critical processes (supplier qualification, production, testing) with established SOPs. You’re effectively renting a world-class quality system and expert regulatory staff, which a startup could otherwise take years to build. This can translate to higher confidence in compliance and product quality from day one. As a bonus, outsourcing partners can often scale up production quickly and provide specialized capabilities (e.g. sterile manufacturing, advanced materials) that you might not afford in-house.
- Cost Savings and Risk Sharing: Outsourcing can reduce the heavy capital and operational costs of manufacturing and compliance. You won’t need to invest in production facilities, expensive equipment, or a full in-house QA department, which can save substantial money for a small company. Moreover, the partner “shares the risk” by taking on regulatory responsibilities alongside you. If there’s an audit or a complex regulatory hurdle, they are in it with you, bringing experience to navigate the challenge. This risk-sharing can be invaluable, as the partner has a vested interest in the product’s success and compliance.
Quick Stat: The trend toward outsourcing in medtech is growing. The global medical device outsourcing market was valued at over $117 billion in 2022 and is projected to grow annually by 12% through 2030. This underscores how companies are increasingly leveraging external partners to reduce costs and complexity in development.
Source: Grandview Research
Cons of Using a Third-Party Legal Manufacturer
Outsourcing the legal manufacturer role isn’t a magic bullet. There are potential disadvantages and challenges to be mindful of:
- Loss of Direct Control: When a third party is the legal manufacturer, you inevitably lose some control over the day-to-day production and quality decisions. Your company will need to trust the partner’s processes. If you’re the type of founder who wants to micromanage every detail, this can be an adjustment. Outsourcing means important aspects from component sourcing to final release of product happen outside your immediate oversight. Without tight mutual understanding, there’s a risk of misalignment on requirements or priorities. You must invest in building a strong collaborative relationship to mitigate this.
- Communication and Coordination Challenges: Working with an external partner introduces another layer of communication that must be managed. Different organizations have different cultures and possibly different time zones. Miscommunications or delays in information sharing can slow down the project or cause frustration. For instance, if the manufacturing partner encounters a production issue or a needed design change, resolving it may take longer than if your team were in-house. Clear communication protocols, regular meetings, and perhaps colocating teams during critical phases can help, but coordinating across company boundaries will always require extra effort.
- Intellectual Property & Confidentiality Risks: Entrusting your product to a third party means exposing your proprietary technology to an outside organization. While NDAs and contracts provide protection, there is always a residual risk when sharing sensitive information beyond your company. You’ll need to be comfortable that the partner will guard your IP as closely as you do. There’s also the psychological aspect: some founders simply feel uneasy not having everything under their roof. It’s crucial to vet the partner’s reputation and include clear IP ownership clauses (e.g. who owns the design files, and that they cannot manufacture a similar product for someone else without permission).
- Dependency and Flexibility Concerns: Relying on a single external partner can create dependency. If that partner faces business issues, capacity constraints, or changes strategy, your product could be left in limbo. Switching to another legal manufacturer partner mid-stream would be difficult and costly due to the need to transfer technical documentation and regulatory approvals. Additionally, consider the branding implications, the partner’s name will be on the product label and certificates. While you remain the product inventor, you might not get public credit as “the manufacturer,” which could impact how your brand is perceived in the market. This isn’t a deal-breaker for many (end users may not focus on the fine print of labels), but it’s a factor to weigh if building your company’s brand as a manufacturer is important to you.
In summary, make sure you have strategies to handle these cons: choose a trustworthy partner, maintain open communication, protect your IP legally, and have contingency plans. With good planning, the downsides can be managed while reaping the benefits of outsourcing.
How Regulatory Approval Works with an Outsourced Legal Manufacturer
One of the most common questions is how the regulatory submission and approval process works if you outsource the legal manufacturer role. The good news is that it can simplify things for your startup, but it’s important to understand each party’s role.
When you use an outsourced legal manufacturer, that partner will typically prepare and submit the regulatory application for the device under their own name and quality system. They will incorporate your product’s Technical Documentation into their existing ISO 13485 Quality Management System and take responsibility for ensuring it meets all regulatory requirements. For example, the partner will compile the design dossiers, risk assessments, clinical data, etc., and interface with a Notified Body (for CE marking in Europe) or with the FDA (for U.S. clearance) as the official manufacturer. Your company provides the necessary data and input, but the formal conformity assessment is done in the partner’s name.
Because the third party already operates a compliant QMS that has been audited and approved, the process of getting a certificate for a new device can be faster. Essentially, the product is added to an existing umbrella of compliance. Some service providers have had multiple products successfully certified through their system for instance, one plug-and-play QMS provider noted that 8 products were certified through their framework in the last five years effectummedical.com. Leveraging such an established system can make regulators more comfortable, since the quality system itself is not new. One EU-based company recently announced their first CE mark achieved as an outsourced legal manufacturer for a client’s device, highlighting that with an “established QMS and expertise in regulatory approvals, [they] bring products efficiently to the European market.” linkedin.com
Once approval is obtained (e.g. the CE Mark certificate or 510(k) clearance is issued), the outsourced legal manufacturer holds that certificate and is listed as the manufacturer in regulatory databases. They will then handle post-approval compliance tasks: maintaining the technical documentation, conducting post-market surveillance, handling complaints or vigilance reporting, and managing any required audits or updates to the certification. All of these are part of the legal manufacturer’s ongoing duties to keep the device in compliance. The partner essentially becomes your regulatory department:
- They are responsible for periodic safety updates, adverse event reporting, and field actions if needed (e.g. recalls).
- They ensure suppliers remain qualified and conduct quality audits of production as needed.
- They keep design and process documentation up-to-date to reflect any changes, so the product’s file is always inspection-ready.
Your role as the product owner/inventor doesn’t end, you will collaborate continuously, especially on any design changes or new iterations, since those need to go through the partner’s change control and might require regulatory approval updates. You’ll also likely be involved in ongoing risk management and clinical evaluations as the device is used in the market, providing input to the partner’s regulatory reports.
In summary: the outsourced legal manufacturer becomes the interface with regulators and shoulders the heavy compliance tasks, but you work closely with them as the technical expert on the product. This model can be highly efficient for navigating approvals, provided that both parties understand their respective responsibilities. It allows a startup to benefit from an experienced compliance team driving the approval process – something that can otherwise be a steep learning curve.
What Types of Products Are Best Suited for an Outsourced Legal Manufacturer?
Outsourcing the legal manufacturing can be a great strategy, but it may fit better with some types of products and situations. Here are a few scenarios and product types where this model tends to work well:
- Digital Health and Software Devices (SaMD): If your product is a software application or algorithm that qualifies as a medical device, using an outsourced legal manufacturer can dramatically simplify your path. These partners often have frameworks to quickly certify software as a medical device. For a small digital health startup that lacks a quality system, this is an ideal solution to meet regulatory requirements without diverting focus from coding and clinical validation.
- Low-to-Mid Risk Devices: Products in Class I, IIa, or IIb (under EU MDR) or moderate-risk FDA device classes are commonly outsourced. These might include things like wearable health monitors, non-invasive diagnostic tools, durable medical equipment, or surgical instruments that have well-established manufacturing processes. Such devices can be more readily integrated into a partner’s QMS because they don’t necessarily require highly specialized production steps unique to one company. The outsourced manufacturer can handle multiple similar products efficiently. On the other hand, extremely novel or high-risk devices (e.g. Class III implantable devices or drug-device combinations) might be less suited to full outsourcing. They often demand very specialized manufacturing and intense regulatory scrutiny, which some startups prefer to keep tighter control over in-house. That said, even some high-risk device makers use contract manufacturers for production; the key is whether the regulatory oversight can be trusted externally. Many Class II and some Class III device startups do succeed via outsourcing by partnering with firms experienced in their product category.
- International Startups Targeting New Markets: If you’re a company outside of a major market (like a non-EU company targeting Europe, or an EU company targeting the US/Canada, etc.), an outsourced legal manufacturer can act as your bridge to that market. For instance, a U.S. or Asia-based startup that wants to sell in Europe could either set up a European entity with a full MDR-compliant QMS or partner with an EU-based legal manufacturer who already meets MDR requirements. This partner would ensure all European compliance for the device as the manufacturer, while the original company might take on a role more akin to supplier or distributor. Regulatory service firms are now offering “EU Legal Manufacturer as a service” specifically to help non-EU manufacturers enter Europe. This can be a faster and easier route to get a CE mark and start selling, without establishing a physical EU office and QMS from scratch. Similarly, there are companies that help certify products for U.S. FDA clearance for foreign innovators. If navigating a foreign regulatory system is a barrier, outsourcing to a local expert entity can pay off.
- Products Requiring Specialized Production or Testing: In cases where your device relies on very specialized manufacturing techniques (for example, micro-molding, sterile implant coating, high-precision electronics assembly), and there are contract manufacturers who excel at that, it might make sense to outsource not just the production but the entire manufacturing responsibility. The partner brings in-depth process know-how and infrastructure that you wouldn’t easily replicate as a startup. By letting them handle legal manufacturing, you ensure those special processes are done right under their quality system.
Of course, these are general guidelines. Every product is unique, and there are always exceptions. The decision should come down to a careful analysis of your team’s capabilities, the complexity of your device, regulatory classification, and the available partners’ strengths. When in doubt, getting advice from medtech regulatory experts (or companies like ours that specialize in product development strategy) can help identify if outsourcing is the best route for your specific situation.
Ready to Navigate Legal Manufacturing? Let’s Talk!
Choosing whether to outsource your device’s legal manufacturer is a big strategic decision. It can fuel faster growth and lighten your regulatory load – but it requires finding the right partner and managing the collaboration effectively. At SY Health Advisor, we help small and medium medtech companies weigh options like this every day. Our mission is to support founders in making smart product development and regulatory strategy decisions that get innovations to patients, faster and safer.
If you found this overview helpful and want to dig deeper into how it applies to your own venture, we’d love to chat. Feel free to get in touch with SY Health Advisor for a personalized discussion. Whether you need guidance on outsourcing, help preparing for regulatory approval, or end-to-end product strategy support, our expertise is at your service. Don’t let regulatory hurdles slow down your big idea – contact us today and let’s accelerate your journey from concept to market!
Interested in learning more? Drop me a message here on LinkedIn or visit our website to schedule a free consultation. Let’s turn your medtech vision into reality!