CDMO Medtech Market: The Forces That Shaped 2025 and What Will Define 2026

In 2025, the medtech contract development and manufacturing (CDMO) sector was shaped by macroeconomic factors and original equipment manufacturers (OEMs) shifting strategies. Design and development firms were impacted by tighter funding for early-stage programs, and OEMs consolidated their supplier networks to streamline operations and increase leverage in the value chain. From a capabilities perspective, we observed continuous focus on miniaturization, and a rising interest in drug-delivery systems and combination products. These dynamics reinforced the need for CDMOs with specialized capabilities, strong regulatory and quality foundations, and the ability to operate as long-term, strategic collaborators. In this Q&A, Sofia Puzzi reviews the 2025 trends in the medtech CDMO sector and explores the expectations for 2026. Sofia is the lead author of the 2025 Global Medtech Contract Development and Manufacturing Report and transaction advisory expert at Alira Health.

Reflecting on 2025, which trends had the greatest impact on the medtech CDMO sector?

Sofia: Funding constraints for innovation were a defining force across 2025, especially for design and development companies serving early stage innovators with limited access to capital and more selective development pipelines. Also, OEMs intensified consolidation of their CDMO networks to create operational and cost efficiencies, strengthen regulatory oversight, and establish deeper, more trusted relationships with a smaller number of suppliers. At the same time, technological shifts contributed significantly to changing demand patterns. Miniaturization and the growth of minimally invasive devices continued to elevate the need for CDMOs with advanced precision engineering and micro manufacturing capabilities. We also witnessed drug delivery devices gaining prominence as the industry shifted further toward combination products and patient-centric administration formats. Growth in prefilled syringes, autoinjectors, wearable injectors, and other platform delivery solutions reflected OEMs’ increasing focus on improving usability, adherence, and treatment convenience.

How did M&A patterns evolve across medtech CDMOs, OEMs, and PE-backed platforms, and what’s the strategic lesson for 2026?

Sofia: Across the first three quarters of 2025, in Alira Health we identified 29 M&A transactions compared to 44 in the same period of 2024. Of these 29 transactions, eight were strategic deals, two were new PE platforms, and 18 were platform add-ons, showing that consolidation continues but with greater selectivity. Early indications suggest that activity in Q4 will rise, although the total value of transactions may remain below the previous year. For 2026, the strategic lesson is that buyers increasingly focus on assets with niche capabilities, the ability to scale efficiently, and established relationships with OEMs. CDMOs that offer specialized technical depth and integrated development support will continue to attract strong interest from both strategic acquirers and PE investors, as these attributes enhance resilience and competitiveness in a more concentrated supplier landscape.

What forces do you expect will define the competitive environment for CDMOs in 2026?

Sofia: The role of CDMOs has expanded beyond outsourced manufacturing to become central in design support, regulatory alignment, and commercial scale up. The ability to deliver end-to-end capabilities that streamline development and reduce risks for OEMs will shape competition in 2026. As OEMs continue to consolidate their supplier networks, the expectation for consistent quality, operational transparency, and rapid responsiveness will rise. CDMOs that collaborate closely, adapt to shifting volume needs, and maintain rigorous quality and compliance systems can position their companies to earn trust and secure long-term partnerships. Increased device complexity and continued pressure for supply chain resilience will further differentiate CDMOs that can operate with speed, reliability, and strong cross functional alignment.

Which capabilities or technologies will rise to the top of OEMs’ priority list as they reassess their outsourcing strategies?

Sofia: The capabilities OEMs seek in a CDMO vary depending on the devices in their portfolios, but across the industry there is a continuous shift toward CDMOs that can serve as strategic long-term partners. OEMs seek to reduce the overhead of managing multiple suppliers and to improve coordination across development and manufacturing activities. They place growing emphasis on some of these factors: strong regulatory compliance capabilities, simplified auditing processes, and consistent quality outcomes across programs Cost efficiency is also rising in importance as a rapid response to production changes.  OEMs seek to reduce the overhead of managing multiple suppliers and to improve coordination across development and manufacturing activities. OEMs also increasingly value the ability of its partners to share technical information securely, provide visibility into future pipeline needs, support joint operational planning, and respond quickly to production changes.

Considering the year ahead, where should CDMOs, OEMs, and private equity firms direct their capital and partnership efforts to capture growth and strengthen resilience?

Sofia: Investment and partnership efforts should focus on innovators with differentiated intellectual property, clear clinical or economic benefit, and strong long-term market potential. For CDMOs, allocating capital toward regulatory readiness, quality systems, scalable operations, and integrated capabilities will deepen supplier stickiness and enhance competitiveness within consolidated OEM networks. PE firms should prioritize CDMOs with specialized expertise, durable customer relationships, and proven operational strength, as these platforms are positioned to benefit from continued consolidation and technology-driven change across the medtech landscape.