Background Context
The EU Medical Device Regulation (MDR 2017/745) came into force in May 2021 (with transition timelines extended to 2028/2029 in some cases via Regulation (EU) 2023/607). It introduced stricter requirements for clinical evidence, post-market surveillance, quality management, traceability, and technical documentation compared to the previous Medical Device Directive (MDD 93/42/EEC).
For Small and Medium Enterprises (SMEs)—which make up over 95% of Europe’s medical device manufacturers—this regulation presents disproportionate financial, procedural, and staffing burdens.
Introduction to EU MDR
The European Union Medical Device Regulation (EU MDR 2017/745) replaced the long-standing Medical Device Directive (MDD 93/42/EEC) and came into full application in May 2021. It was introduced to enhance patient safety, improve transparency, and address weaknesses revealed in the previous regulatory framework—especially after high-profile device failures like the PIP breast implant scandal. Compared to the MDD, the MDR requires more robust clinical evidence, tighter post-market surveillance, and more stringent quality management and technical documentation. While these reforms aim to ensure safer, more effective devices for EU patients, they have introduced significant challenges, particularly for small and medium enterprises (SMEs).
Structural Disadvantage of SMEs in the MDR Framework
SMEs in the medical device sector often lack the regulatory infrastructure, financial buffers, and clinical resources that large manufacturers can rely on. Unlike large corporations with dedicated regulatory affairs departments and substantial capital, SMEs frequently operate with lean teams focused on engineering and production. The MDR’s demands—such as regular post-market clinical follow-up (PMCF), comprehensive Clinical Evaluation Reports (CERs), full Quality Management System (QMS) implementation (ISO 13485), and integration into EUDAMED—require a level of technical sophistication and ongoing expenditure that many SMEs were never required to meet under the MDD. This systemic imbalance puts SMEs at a competitive disadvantage in navigating the regulatory transition.
Financial and Resource-Related Burdens
Perhaps the most critical challenge SMEs face is financial viability under MDR. The cost of preparing and maintaining MDR-compliant technical documentation, conducting new clinical investigations, and hiring consultants or Notified Bodies (NBs) has multiplied. Estimates suggest the cost of MDR certification can be 5 to 10 times higher than under MDD. Unlike large players who can spread these costs across multiple high-revenue product lines or absorb temporary losses, SMEs with narrow product portfolios and smaller budgets find these financial requirements existentially threatening. Many SMEs have even withdrawn products or exited the EU market entirely, especially for niche or low-profit devices.
Notified Body Access and Capacity Crisis
A key logistical barrier for SMEs is the limited availability and access to Notified Bodies designated under MDR. Post-MDR implementation, the number of NBs dropped significantly, and those that remain have a long backlog of certification requests. In practice, larger companies are often prioritized because they offer more business to NBs. SMEs, which may have fewer or less “lucrative” products, often face waiting periods of 12–24 months just to get into the NB’s review queue. Additionally, some NBs refuse to take on new clients, further isolating small firms. Without NB access, SMEs cannot legally sell their products in the EU.
Regulatory Complexity and Reclassification Impacts
Under MDR, device classifications have changed, and many products previously considered low-risk under MDD now fall into higher-risk categories, triggering NB involvement. For example, software as a medical device (SaMD) or diagnostic devices using AI algorithms are now often classified as Class IIa or higher. This reclassification is a shock for small tech-focused firms that may have once sold products under a self-certification pathway. These firms are now subject to clinical evidence generation, rigorous risk assessment, and long-term surveillance requirements, often without having regulatory experts in-house to navigate the process.
Documentation and Quality System Challenges
The MDR demands far more robust and formalized technical documentation, such as risk-benefit analyses, design dossiers, and clinical performance data. It also enforces continuous post-market surveillance, which includes analyzing real-world data, reporting adverse events, and proactively updating risk assessments. Additionally, ISO 13485-compliant QMS is now effectively mandatory for all manufacturers, regardless of size. For SMEs, these new documentation and QMS obligations often require hiring external help, investing in software tools, and conducting multiple internal audits—tasks that are costly, time-consuming, and operationally disruptive for small teams.
International Misalignment and Regulatory Duplication
A lesser-discussed yet critical challenge for SMEs is the lack of global regulatory harmonization. Many SMEs that sell globally must now comply not only with EU MDR, but also with UKCA, FDA, and other regional regulations. Unlike large multinationals that have legal and regulatory teams in every region, SMEs often struggle to maintain parallel compliance frameworks. This duplication increases operational complexity, drains financial resources, and may ultimately force SMEs to exit international markets just to remain viable under MDR. The absence of mutual recognition agreements (MRAs) between the EU and other jurisdictions further worsens the situation.
Conclusion: A Tipping Point for SME Survival
The EU MDR was intended to enhance safety and performance across the medical device industry—but in doing so, it has also created unintended consequences for smaller players. SMEs now face a perfect storm of regulatory burden, financial strain, and market access barriers. Unless proactive steps are taken—such as portfolio rationalization, regulatory outsourcing, digital process automation, and targeted use of EU grants—many SMEs will continue to shrink or disappear from the EU market. Policymakers and industry stakeholders must work to rebalance the framework if Europe wants to preserve its reputation as a hub of medical device innovation and entrepreneurship.
Key Challenges for SMEs Under MDR
| Challenge | Description | Impact |
|---|---|---|
| 1. Cost Overload | Regulatory costs (consultants, notified bodies, PMS, PMCF) can exceed €200,000–€500,000 per device | Unsustainable for firms with low margins or niche devices |
| 2. Notified Body Access | NBs are overwhelmed; SMEs face longer wait times or are deprioritized | Delays in certification → product unavailability |
| 3. Human Resource Deficit | Many SMEs lack internal regulatory and clinical affairs teams | Must outsource, increasing cost and slowing progress |
| 4. Clinical Evidence Requirements | Stringent requirements for Clinical Evaluation Reports (CERs) and PMCF | Devices previously exempt now need real-world data |
| 5. Quality Management System (QMS) | MDR demands comprehensive ISO 13485:2016-compliant systems | High cost of QMS development, audits, and documentation |
| 6. Legacy Device Reclassification | Many Class I devices now reclassified to Class IIa/IIb/III | Triggers NB involvement and new documentation burden |
| 7. EUDAMED Registration | Upcoming mandatory use of EUDAMED | Requires digital infrastructure and training |
| 8. Lack of Regulatory Harmonization | Must comply with EU MDR and possibly UK, US, and other rules | Duplicative efforts reduce competitiveness |
Cost Comparison: MDD vs MDR for SMEs
| Regulatory Cost Item | Under MDD | Under MDR | % Increase |
|---|---|---|---|
| Notified Body Fee (avg/device) | €10,000–€20,000 | €40,000–€100,000 | +300–500% |
| Technical Documentation Prep | €5,000–€10,000 | €20,000–€60,000 | +400% |
| Clinical Evaluation + PMCF | €5,000–€15,000 | €50,000–€250,000 | +500–1000% |
| QMS Implementation | €5,000–€25,000 | €25,000–€75,000 | +300% |
Strategic Approaches for SME Survival Under MDR
Here’s a multi-pronged survival strategy, aligned with industry practices, regulatory advice, and SME case studies:
1. Portfolio Rationalization
Portfolio rationalization refers to the strategic process of reviewing, prioritizing, consolidating, or eliminating products within a company’s portfolio to optimize resources, reduce regulatory burden, and maximize return on investment. For medical device SMEs under the EU MDR, this approach is crucial due to limited financial and human resources. The goal is to focus compliance efforts on high-value, high-potential products while reducing or phasing out those that are unprofitable or disproportionately costly to bring into MDR compliance.
Why Portfolio Rationalization Is Essential Under MDR
The EU MDR significantly increases the cost and effort required to maintain a device on the market. Each device requires comprehensive technical documentation, clinical evaluation reports (CERs), post-market surveillance (PMS), post-market clinical follow-up (PMCF), and, for higher-class devices, involvement from a Notified Body (NB). This means even a small device portfolio could become exponentially more expensive and resource-heavy to maintain.
SMEs, which typically have smaller regulatory teams (or none), cannot feasibly bring their entire portfolio into MDR compliance at once. Rationalization helps allocate resources more effectively and avoids wasting time and money on low-performing or obsolete devices.
🔍 How to Conduct Portfolio Rationalization: Step-by-Step Process
1. Inventory Assessment
Begin by creating a comprehensive inventory of all medical devices in the company’s portfolio, including:
- Product classification (under MDD and MDR)
- Sales volume and geographic distribution
- Profit margins
- Regulatory status and certification expiry dates
- Clinical data availability
2. Cost-Benefit Analysis
For each product, estimate the cost of MDR compliance:
- Notified Body fees
- Clinical study costs (if applicable)
- Technical file development
- Time to compliance
Compare this with the expected revenue, profitability, and market demand.
3. Strategic Prioritization
Rank products based on:
- Strategic importance (e.g., flagship products)
- Revenue contribution
- Potential for international expansion
- Clinical or technological innovation
Devices that are critical to business continuity or have high growth potential should be prioritized for MDR transition.
4. Identify Candidates for Discontinuation or Consolidation
- Discontinue low-volume, low-margin products that require expensive compliance.
- Consolidate similar product variants under a single regulatory file where possible (e.g., sizes of a catheter with the same intended use).
- Outsource or license out non-strategic products.
Key Criteria for Product Selection
When rationalizing a portfolio under MDR, SMEs should consider:
| Criterion | Why It Matters |
|---|---|
| Regulatory Complexity | Higher-class devices or those reclassified under MDR require more resources |
| Revenue Contribution | Focus efforts on products contributing the most to revenue/profit |
| Clinical Data Availability | Products with pre-existing strong clinical evidence are easier to transition |
| Market Demand | High-growth or underserved market products offer better ROI |
| Lifecycle Stage | Products nearing end-of-life may not justify MDR investment |
Real-World Example: SME Rationalizing Orthopedic Devices
Consider a small orthopedic device manufacturer that produces 20 types of bone plates and screws. Under MDD, most were self-certified or Class I. Under MDR, many are now Class IIb, requiring NB involvement and clinical data. The company conducts a rationalization exercise and finds:
- 6 low-selling variants bring in <5% revenue but require ~€80,000 in MDR compliance costs.
- 2 flagship implants generate 60% revenue and already have robust clinical studies.
- 5 products can be grouped into a single technical file with minimal changes.
Outcome: The company discontinues the 6 underperformers, bundles 5 into a single file, and prioritizes MDR certification for the top 2 products—cutting regulatory costs by 40% while preserving 90% of revenue.
Regulatory Tools That Support Rationalization
Portfolio rationalization can be made more efficient using:
- Product Lifecycle Management (PLM) tools (e.g., Siemens Teamcenter, Oracle Agile)
- Regulatory Information Management Systems (RIMS) for tracking compliance status
- Data analytics to assess revenue, performance, and cost metrics
- MDR consultants for clinical and technical file audits
- Digital QMS systems like Greenlight Guru or MasterControl for document harmonization
Risks of Not Rationalizing
Failing to rationalize a device portfolio under MDR can lead to:
- Over-extension of resources
- Missed certification deadlines and product withdrawal from EU markets
- Regulatory non-compliance penalties
- Cash flow shortages from investing in non-viable products
- Delays in revenue from strategic products awaiting compliance focus
Conclusion: Portfolio Rationalization as a Survival Imperative
For SMEs navigating the EU MDR, portfolio rationalization is not just a strategy—it is a survival mechanism. It allows SMEs to focus their limited resources on products with the highest impact, optimize compliance workflows, and position themselves for sustainable success. In an environment where regulatory costs are rising and Notified Body access is limited, less is often more—and a focused, compliant portfolio is more valuable than an extensive, unsustainable one.
📌 Example: A German orthopedic SME discontinued 3 low-selling Class IIa tools to focus resources on a flagship surgical implant with global demand.
- Action: Analyze profitability, risk class, and strategic value of each device.
- Drop or defer MDR transition for low-margin or niche products.
- Prioritize high-volume/high-margin products for MDR compliance.
2. Use of Regulatory Consultants and Outsourcing
Small and medium enterprises often lack in-house regulatory, clinical, or quality assurance teams, which are essential for EU MDR compliance. To bridge this gap, many SMEs are turning to regulatory consultants and outsourcing services for essential functions such as preparing technical documentation, drafting Clinical Evaluation Reports (CERs), managing post-market surveillance (PMS), and conducting post-market clinical follow-up (PMCF) activities. Consultants bring expertise in navigating complex MDR requirements and provide tailored, on-demand support. Outsourcing also helps SMEs stay lean by avoiding long-term hiring commitments while ensuring access to specialized knowledge. For many companies, this strategy is proving cost-effective, especially when combined with clearly defined deliverables and timelines.
- Leverage contract regulatory affairs professionals or consulting firms for:
- Clinical evaluations
- PMCF planning
- Technical documentation writing
- Outsource QMS to third-party service providers with ISO 13485 expertise.
📌 Advantage: Avoids full-time hires; scalable expertise for short-term spikes.
3. Collaboration with Notified Bodies Early
Early engagement with a Notified Body (NB) is critical for SMEs due to limited NB capacity and long certification timelines. Unlike large manufacturers that are prioritized by NBs because of their larger revenue potential, SMEs often face long delays if they do not proactively approach NBs early in their planning process. Collaborating early helps SMEs understand the specific expectations of the NB, clarify device classification issues, and align on the required evidence and documentation. Establishing a good working relationship with an NB can also lead to faster reviews and fewer iterative submissions. Companies that treat the NB as a partner rather than an auditor often experience smoother certification processes.
- Engage early to get into NB scheduling pipeline.
- Maintain proactive communication and submit high-quality documentation to reduce rejection cycles.
📌 Tip: Some NBs offer fast-track paths for SMEs that meet high documentation standards.
4. Digitalization & Automation
Digital transformation can be a game-changer for SMEs facing the complex documentation and surveillance requirements of MDR. By adopting regulatory software platforms, SMEs can automate document version control, organize regulatory files, track PMS and vigilance reports, and even manage audit trails. Tools like Greenlight Guru, MasterControl, and Rimsys offer integrated platforms for managing Quality Management Systems (QMS), design history files, and compliance dashboards. Automation reduces human error, speeds up repetitive tasks, and improves audit readiness. For example, real-time clinical data can be automatically captured and analyzed using electronic data capture (EDC) tools, making post-market clinical follow-up more efficient and defensible.
- Use Regulatory Intelligence Tools, e.g.,:
- Rimsys
- Greenlight Guru
- QMS-in-a-box
- Automate:
- Document version control
- PMS & PMCF data collection (via EDC tools)
- Vigilance reporting systems
📌 Impact: Cuts long-term labor costs and error rates.
5. Participation in Cluster Programs and Industry Groups
SMEs can strengthen their MDR transition efforts by joining EU-supported medical device clusters, trade associations, and collaborative networks. Organizations like MedTech Europe, Medsafe4SME, and national MedTech hubs provide valuable access to shared resources, best practices, regulatory updates, and sometimes even subsidized consulting support. These groups often have direct channels to EU regulators and Notified Bodies, giving members early insights into regulatory interpretations or procedural changes. In some cases, such clusters also negotiate block certifications or shared training programs for members, reducing both the time and cost of compliance. This kind of peer-to-peer collaboration is especially important for SMEs lacking the lobbying power of large multinationals.
- Join EU-supported networks like:
- Medsafe4SME
- MedTech Europe’s SME Taskforce
- These provide:
- Shared training resources
- Negotiated NB access
- Policy advocacy
- Grants and financial incentives
6. Access EU Funding & National Subsidies
To alleviate the financial burden of MDR, SMEs should explore European and national funding programs that are specifically designed to support innovation and regulatory transitions. Initiatives like Horizon Europe, the European Innovation Council (EIC) Accelerator, and country-specific programs (e.g., Germany’s ZIM, France’s Bpifrance, Italy’s Smart&Start) offer grants, low-interest loans, or tax incentives to help cover regulatory expenses such as clinical trials, QMS implementation, and market approval costs. Some programs provide direct MDR-related support, including vouchers for Notified Body fees or consulting costs. Applying for these funds requires effort, but they can make a critical difference in maintaining compliance without crippling a company’s budget.
- SMEs may be eligible for:
- Horizon Europe grants
- European Investment Bank (EIB) support
- Local innovation subsidies (e.g., Germany’s ZIM, France’s Bpifrance)
- Some funds support MDR transition explicitly.
7. Strategic Partnerships or M&A
For some SMEs, the best path to survive MDR may involve forming strategic alliances or pursuing mergers and acquisitions (M&A). Partnering with larger organizations allows SMEs to leverage their partner’s regulatory infrastructure, distribution networks, and financial stability while retaining some control over product development. Co-branding, joint ventures, and licensing agreements are also viable options. In other cases, SMEs may choose to divest part of their portfolio to focus on core competencies or sell their business altogether to a larger player with the means to handle MDR compliance. While this may be a difficult decision, it can also preserve innovation and market access in a challenging regulatory environment.
- Consider partnering with larger companies for:
- Regulatory infrastructure sharing
- Co-branding MDR-compliant devices
- In critical cases, consider selling niche portfolios to firms with resources to maintain compliance.
8. Alternative Market Focus
Given the high cost and complexity of MDR compliance, some SMEs are strategically shifting focus toward non-EU markets that offer more streamlined or harmonized regulatory pathways. Countries such as the UK (under UKCA marking), Australia, Canada, Brazil, and Southeast Asian nations often have less burdensome requirements or faster approval timelines, making them attractive for revenue diversification. Additionally, countries that participate in the Medical Device Single Audit Program (MDSAP) may offer opportunities for efficient multi-market access. While the EU remains an important market, focusing temporarily on regions with lower regulatory hurdles allows SMEs to generate income, test products, and build brand strength while preparing for eventual EU compliance.
- Focus on:
- Non-EU markets (Latin America, Southeast Asia, Middle East)
- UKCA (easier than MDR as of 2025)
- MDSAP-aligned countries (Australia, Canada, Japan, USA)
📌 Caution: EU MDR remains a gold standard, but interim relief can come from broader international revenue.
SME vs Large Manufacturer: Comparative Resilience
| Factor | SMEs | Large Manufacturers |
|---|---|---|
| Cost Absorption | Low | High |
| In-house Regulatory Staff | Rare | Standard |
| NB Relationships | Weak | Strong |
| Time to Market | Longer | Shorter |
| Risk Tolerance | Low | High |
| Flexibility | High (agile) | Low (bureaucratic) |
EU Recommendations for SME Relief
| Proposed Policy (in discussion or partial implementation) | Impact if Approved |
|---|---|
| MDR compliance vouchers/grants | Offsets compliance cost |
| Fast-track NB routes for SMEs | Reduces certification time |
| Simplified PMCF for low-risk devices | Lowers evidence burden |
| Technical documentation templates | Accelerates file preparation |
Conclusion
The transition from the Medical Device Directive (MDD) to the Medical Device Regulation (MDR) represents the most significant regulatory overhaul in the European medical device landscape in decades. While the MDR’s goals—enhanced patient safety, better device performance, and stronger post-market oversight—are commendable, the implementation has created a disproportionately heavy burden on SMEs, threatening their operational viability and market presence.
One of the most profound challenges SMEs face is limited internal capacity, both in terms of regulatory knowledge and financial flexibility. Unlike large manufacturers with dedicated regulatory, legal, and clinical departments, SMEs must operate leanly and often juggle multiple roles within small teams. Under MDR, compliance is no longer a one-time task but a continuous lifecycle responsibility—requiring proactive surveillance, real-world clinical data collection, and ongoing risk assessments. The cost and expertise required to meet these demands can be unsustainable for smaller players without external support.
However, survival is possible—and even long-term success is achievable—if SMEs approach MDR with a focused, strategic mindset. Portfolio rationalization stands out as a critical first step, enabling SMEs to redirect limited resources toward their most commercially viable and strategically important products. Eliminating or pausing development of lower-margin or legacy devices that no longer justify the cost of compliance is not just a cost-saving measure—it is a form of business optimization under regulatory pressure.
Beyond portfolio focus, leveraging external expertise through regulatory consultants and outsourcing offers SMEs a way to fill capability gaps without inflating headcount. Similarly, early engagement with Notified Bodies, even before formal submissions, can prevent unnecessary rework and certification delays—especially vital in a system still struggling with NB capacity constraints.
The strategic embrace of digital tools and automation also opens a sustainable path for compliance. Software solutions for document management, post-market surveillance, and quality management can drastically reduce the manual burden on staff, ensure audit readiness, and improve data accuracy. SMEs that adopt such tools early can turn regulatory compliance into a repeatable, scalable process.
Collaborative ecosystems—such as EU medical technology clusters, trade associations, and joint ventures—further provide SMEs with the opportunity to share knowledge, reduce costs, and access regulatory interpretation support. Many of these initiatives even provide financial incentives, training programs, or shared access to regulatory experts, all of which help SMEs navigate the MDR maze more efficiently.
For those with extreme constraints, focusing temporarily on alternative international markets or pursuing strategic partnerships can preserve business momentum while deferring EU investment to a more viable timeline. While the MDR is the gold standard for regulatory rigor, it is not the only viable path to market success, especially in a globalized medtech industry.
In conclusion, the EU MDR presents undeniable challenges for SMEs, but those who adapt, specialize, and strategically prioritize their resources are likely to emerge stronger, leaner, and more resilient. The key is not to replicate what large manufacturers do—but to approach compliance with agility, innovation, and laser-sharp focus. By doing so, SMEs can continue to play a vital role in Europe’s medical innovation ecosystem, delivering safe and effective healthcare solutions in compliance with the highest regulatory standards.
The MDR undoubtedly places disproportionate stress on SMEs, with many struggling to survive the shift. But through:
- Smart portfolio and resource planning
- Strategic outsourcing
- Use of digital regulatory tools
- Seeking EU-level support
- Diversifying market focus
…SMEs can survive and even thrive under the new regulatory paradigm.
References
[1] European Commission, “Medical devices – New regulations,” European Commission Health Policy, 2023. [Online]. Available: https://health.ec.europa.eu/medical-devices-sector/new-regulations_en
[2] Medical Device Coordination Group (MDCG), “Guidance – MDCG endorsed documents and other guidance,” European Commission, 2023. [Online]. Available: https://health.ec.europa.eu/medical-devices-sector/new-regulations/guidance-mdcg-endorsed-documents-and-other-guidance_en
[3] MDCG, “Position Paper on the application of Article 97 MDR to legacy devices,” MDCG 2022-14, Aug. 2022. [Online]. Available: https://health.ec.europa.eu/system/files/2022-08/mdcg_2022-14_en.pdf
[4] MedTech Europe, “Survey Report: Analysing the availability of medical devices in 2022 in connection to the MDR implementation,” Jul. 2022. [Online]. Available: https://www.medtecheurope.org/wp-content/uploads/2022/07/medtech-europe-survey-report-analysing-the-availability-of-medical-devices-in-2022-in-connection-to-the-medical-device-regulation-mdr-implementation.pdf
[5] European Commission, “SME Test – Better Regulation Tool,” EU Single Market and Industry, 2023. [Online]. Available: https://single-market-economy.ec.europa.eu/smes/sme-strategy-and-sme-friendly-business-conditions/sme-test_en
[6] MedTech Europe, “Administrative Burden Report: IVDR/MDR Impact Assessment,” Mar. 2025. [Online]. Available: https://www.medtecheurope.org/wp-content/uploads/2025/03/250318_mte-report-on-admin-burden-ivdr_mdr_final.pdf
[7] European Commission, “EUDAMED – European Database on Medical Devices,” Public Health – Medical Devices, 2023. [Online]. Available: https://health.ec.europa.eu/medical-devices-topic/eudamed_en
[8] European Commission, “Proposal to extend MDR transition periods (Regulation EU 2023/607),” European Commission News, Mar. 2023. [Online]. Available: https://health.ec.europa.eu/news/commission-proposes-extension-mdr-transition-periods-2023-01-06_en