In-house development of medical devices: new opportunities for healthcare institutions

MDR - Blog - Health & IT / 30 September 2026

The in-house exemption under the Medical Device Regulation (MDR)^[1]opens doors for healthcare institutions that wish to innovate on their own terms. This exemption is specifically intended for healthcare institutions: organisations whose primary purpose is the care or treatment of patients or the promotion of public health. They can develop smart software themselves, such as a patient monitoring app or an image analysis algorithm, without having to comply with all the obligations that normally apply under the MDR. This offers clear advantages: a self-built solution often aligns more closely with specific care processes and is easier to integrate into the organisation's existing systems.

However, the exemption does come with a practical limitation. The MDR stipulates that the device may not be placed on the market and may not be supplied to another legal entity^[2].In concrete terms, this means that use within a single legal entity (for example, between different branches or departments) is permitted, but transfer to another legal entity is not. As a result, healthcare institutions cannot collaborate effectively, cannot learn from one another, and must continually reinvent the wheel. One of the consequences? Innovation stagnates.

Fortunately, a recent amendment proposal from the European Commission may bring about a change: the proposal aims to facilitate cooperation between healthcare institutions by relaxing the current restrictions on transfer. In this blog, we briefly discuss what the in-house exemption entails, what relaxation is being proposed, and what this means for healthcare institutions that wish to innovate.

The current in-house exemption

The in-house exemption gives healthcare institutions more flexibility, but strict conditions do apply. A healthcare institution may only make use of the exemption when all conditions are met.^[3]

What does this mean in practice? Under the assessment framework, the healthcare institution must be able to demonstrate, among other things, that no comparable CE-marked device is available on the market, or that an available device does not meet the specific needs of the target group. Consider a hospital that wants to build a decision-support tool for a patient population with a specific combination of conditions, for which no suitable commercial product exists. In addition, production and use must take place under an appropriate quality management system. Documentation and transparency obligations towards the competent authority also apply, and it must be demonstrated that the general safety and performance requirements are met.^[4]

A key condition is that the device may not be transferred to another legal entity. This requirement creates a bottleneck in practice. A mental health institution that has built a digital tool for monitoring mood disorders, for example, may not transfer it to a peer institution working with the same patient group that could benefit from it. Joining forces is not permitted. The European Commission's amendment proposal includes a relaxation on this point.^[5]

Amendment proposal: more room for collaboration

As mentioned earlier, the European Commission's amendment proposal aims to facilitate cooperation between healthcare institutions. This would make flexible reuse possible, offering considerable opportunities. The proposal is expected to bring the following benefits. ^[6]

First, it prevents the repetition of effort. If a university medical centre has developed a monitoring tool for patients with a rare metabolic disorder, another centre of expertise working with the same patient group could adopt that device in the future, rather than starting from scratch. The development time saved in this way can then be invested in other innovations or improvements to the device.

Second, it enables collaboration. Healthcare institutions can jointly continue developing and adapting the device to their specific workflows and patient populations. Improvements and new insights can be shared directly, allowing the tool to continuously improve its fit with everyday practice.

Third, it lowers the threshold for smaller healthcare institutions. A specialised clinic, for example, may not have the capacity or expertise to carry out a full development process on its own. By adopting a proven device from a larger institution, they too can gain access to innovative solutions or a solid foundation from which to develop further.

Finally, it can improve the quality of devices. The more healthcare institutions use a device and provide feedback, the quicker any shortcomings come to light and the better the device becomes. Moreover, not every healthcare institution needs to set up a complete quality management system on its own: this can also be (partially) outsourced to specialised parties, as long as the healthcare institution retains ultimate responsibility.

What is the timeline?

The exact timeline is not yet known, but the following indication can be used. The European Commission published the proposal in December 2025. Although no official timeline for approval has been confirmed, the legislative process typically takes 12 to 24 months. Following entry into force, a transitional period will also apply to allow compliance with the new rules. It is therefore advisable to treat the proposal as indicative for the time being.

Conclusion: new opportunities, but also continuing obligations

All in all, relaxing the in-house exemption has the potential to enable medical devices to be developed more quickly and efficiently, and thereby improve healthcare. It offers opportunities for healthcare institutions that simply did not exist before.

Nevertheless, the relaxation does not mean that all obligations will cease to apply. We support healthcare institutions in meeting the legal and organisational requirements that continue to apply. Think of establishing and implementing an appropriate quality management system, ensuring compliance, and setting up the required processes and documentation. Would you like to know what we can do for your organisation? Please do not hesitate to contact us.

And curious about other possible MDR changes for medical software? Read our other blog too.