I know that there are plenty of cynics out there, but it does seem like onshoring is gaining traction, at least in the United States. It was one of the talking points during a recent roundtable on sourcing suppliers in China that I moderated, part of the daylong Emerging Trends in Medical Device Outsourcing online event. The sessions are now available on demand (registration required). New evidence of the trend comes in an article in Bloomberg Businessweek. "Made in China? Not Worth the Trouble" includes a profile of Unilife, which has reshored manufacture of its safety syringes. In this case, a low-wage labour force was no match for the cost of regulatory compliance.
A maker of drug-delivery systems, Unilife offers prefilled syringes that are designed to prevent needlesticks. The company, headquartered in York, PA, USA, had used contract manufacturers in China to produce its devices. Stringent US FDA regulations made it advantageous to bring those manufacturing jobs back to York, explains CEO Alan Shortfall.
"The very thing in the USA that oftentimes we complain about—the complexity of the rules and regulations—works for us," Shortfall told Bloomberg Businessweek. "FDA compliance is the main reason we are [manufacturing in the United States]."
The article profiles a number of other nonmedtech companies that have left China (or chosen not to go there at all) because of quality and IP issues and, yes, cost. Once you factor in shipping expenses, which have risen dramatically, and the headaches of overseeing manufacturing several time zones and one massive culture away, it increasingly makes economic sense for some small manufacturers to get back to their roots.