Originally published April 2024. Updated November 2026. We added a section on what the U.S. Food and Drug Administration's (FDA's) Quality Management System Regulation, which took effect on February 2, 2026, means for a contract manufacturer adding development services.
The medical device manufacturing industry is at a crossroads. Contract manufacturing organizations (CMOs) face a pivotal decision: whether to evolve into contract development and manufacturing organizations (CDMOs). The move is enticing, with the promise of expanded services and deeper partnerships with original equipment manufacturers (OEMs), but it carries significant operational, financial and strategic risk. Is making the leap the only path forward, or is there an alternative that offers the benefits of expansion without the same risks?
The challenge of transitioning
Moving from a CMO to a CDMO is no small feat. It takes a substantial investment in capabilities and infrastructure, and a complex realignment of business strategy. The challenges include operational complexity, the regulatory compliance burden, intellectual property management, resource allocation and the intricacies of pricing. Each of these can pull on the core competencies of a CMO, putting at risk the quality and efficiency that made it successful in the first place.
An alternative strategy: development services and regulatory filings
Instead of a full-scale transition to a CDMO, a CMO might consider a route that builds on its manufacturing strength while expanding carefully into development services. This strategy means offering a tailored set of development services, including design collaboration, prototyping and preparation of regulatory filings, packaged to complement its manufacturing expertise.
This approach lets CMOs deepen their relationships with OEMs by becoming a bigger part of the product development lifecycle, without overextending into areas outside their core competencies. By focusing on development services that are closely tied to their manufacturing processes, CMOs can offer real value to OEMs, helping them accelerate product development and streamline regulatory submissions.
The benefits of a focused expansion
- Strategic focus: staying close to the CMO's existing expertise keeps quality and efficiency intact.
- Regulatory expertise: building skill in regulatory filings and compliance as part of the development package gives OEMs support they value as they work through complex regulatory requirements.
- Risk mitigation: this approach avoids the risks of a broader CDMO transition, including operational complexity and diluted resources.
- Cost-effective expansion: a focused expansion needs less investment than a full CDMO transition, which makes for a more sustainable growth path.
What FDA's QMSR changes for a CMO adding development work
The U.S. Food and Drug Administration's (FDA's) Quality Management System Regulation (QMSR) took effect on February 2, 2026. It incorporates ISO 13485:2016, the International Organization for Standardization (ISO) quality management standard for medical devices, by reference into Title 21 of the Code of Federal Regulations (CFR) Part 820, so U.S. requirements and the international standard most CMOs are already certified to now share one framework. Three things follow for a CMO thinking about development services:
- Check your certificate scope. ISO 13485:2016 lets an organization exclude design and development controls (clause 7.3) where regulations allow, and many contract manufacturers do. Before you sell design collaboration or prototyping, decide whether you are taking on design responsibility. If you are, clause 7.3 has to come into scope, with the procedures and records to back it up.
- Write the split into the quality agreement. When design work is shared, the quality agreement with each OEM should say who owns design inputs, verification, validation, design transfer and the design history. Gaps there tend to surface during inspections, not before.
- Expect inspections against ISO 13485 language. FDA retired its Quality System Inspection Technique (QSIT) on February 2, 2026 and now inspects under the updated Compliance Program 7382.850. One quality management system, built on ISO 13485, can now serve your FDA obligations and your international customers.
How MB&A can help
Taking this path takes careful planning, industry insight and a clear understanding of both your capabilities and what your OEM partners need. MB&A guides CMOs through this decision. We can help you:
- Assess your current capabilities and identify development services that fit your strengths and the needs of the market.
- Plan how to integrate those services into your existing operations in a way that adds the most value for your OEM partners with the least disruption.
- Work through the regulatory requirements, so your services comply with current regulations and set your OEM partners up for success in their submissions.
- Build service offerings that clearly communicate the value and expertise you bring to the OEM partnership, and set you apart in the market.
Choosing not to make the leap to a CDMO doesn't mean standing still. It means choosing focused expansion that fits your core competencies and your market. If you are weighing that choice, our regulatory affairs and operations and engineering teams can help you build the plan. Let's talk.