The new EU Medical Devices Regulations (MDR) aims to improve healthcare through enhanced safety and performance. This presents a challenge for businesses now undertaking extensive work to comply with these new requirements but is there also an R&D opportunity? asks Seamus Leahy of our R&D Incentives practice.

Medical devices play a significant role in protecting patients and public health. They assist in diagnosing, preventing, monitoring, predicting and treating illness. The EU recently introduced new Medical Devices Regulations (MDR) to improve patient outcomes. The MDR replaces the EU Medical Device Directive (MDD). Changes introduced by the new regulations include enhanced safety and performance requirements, technical documentation, and clinical data and evaluation requirements.

The new regulations were first enacted back in 2017 but are not yet fully implemented because of the pandemic and other delays. The legislative change originally required all medical devices certified under the MDD to be re-certified based on MDR by 26th May 2024.

Transitional period

A three-year transitional period was originally planned for the implementation of the key provisions of the MDR, but, in January, the European Commission reacted to manufacturers concerns and proposed an extension. The transition period has been extended due to a combination of factors including the pandemic and the shortages of raw materials caused by the war in Ukraine.

In addition, companies are facing significant challenges in successfully meeting the additional requirements of the new regulations. Given these challenges, on 6 January 2023, the European Commission published the proposal to extend the transitional provisions. This extension proposal was approved in the European Parliament in February 2023.

For high-risk devices, the transitional period to the new regulations will be shorter (extended to 31 December 2027), whereas the medium and lower risk devices will have a longer transition period (extended to 31 December 2028). The proposal also introduces a transition period for Class III implantable custom-made devices. Manufacturers will have until 26 May 2026, to certify such devices.

These extensions have been welcomed by manufacturers struggling to meet the demands of the new regulations. The new requirements with regards to medical devices are more challenging to achieve than perhaps it may seem on the face of it. 

Are MDR related activities eligible for the R&D tax credit?

For companies undertaking development activities required to address the MDR requirements, there may be an opportunity to claim R&D tax credits. For example, due to the MDR requirements, many manufacturers have had to undertake significant development work to investigate alternative materials for existing products, and subsequently integrate them into the product designs and manufacturing processes.  In many cases, this has resulted in significant uncertainty and ongoing research and development activities to resolve the challenges.

Under the R&D tax credit legislation, qualifying R&D activities are defined as those which are systematic, investigative or experimental, seek to achieve new knowledge and involve the resolution of technological challenges. These activities can include the improvement of existing products, processes or services, as well as devising new ones.

It is worth noting that R&D as defined in tax legislation is not just the domain of academics and their scientific advancements, but also technological advancements (i.e. advancements based on the practical implementation of scientific principles).

The ongoing work to address the new MDR regulations may present an opportunity for companies in Ireland to consider an R&D tax credit claim for these activities. 

Qualifying activities

Activities which could qualify for the R&D tax credit (subject to the above requirements) may include the following:

  • Material substitution – Determining the optimal alternative material and its impact on existing product design and performance.
  • Device Redesign – Product redesign and revalidation due to material changes resulting in altered performance of the original design.
  • Process Development – Development of new or improvements to existing processes to accommodate alternative materials.
  • New Test Methods – Development of new test methods to provide the necessary data to support the MDR regulation requirements.

With the new requirements of the of the MDR regulations, every project presents its own, unique set of challenges. New material introduction, new test method development and redevelopment of processes can all contribute to an R&D tax credit claim.

What manufacturers should consider

In summary, many of the activities undertaken by companies grappling with the MDR regulations are technically challenging. It would be a worthwhile exercise for all companies addressing the needs of the regulations to carefully consider the projects they are undertaking and reflecting on whether any element of them could be deemed qualifying for the purposes of the R&D tax credit.

Learn more

In KPMG’s R&D Incentives Practice we have significant experience in identifying potentially qualifying activities in the medical devices sector and can aid in navigating the challenges of the R&D tax credit. Go to to find out more.

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