Introduction
The European Medical Device Regulation (EU) 2017/745 (EU MDR) establishes a robust regulatory framework to ensure that medical devices placed on the European market are safe, effective, and perform as intended. While most medical devices must undergo a conformity assessment and bear the CE mark before being placed on the market, the MDR recognizes that commercially available devices may not always meet specific clinical needs.
To address these situations, Article 5(5) provides a limited exemption that allows eligible health institutions to manufacture and use certain medical devices in-house without undergoing the standard conformity assessment procedure and CE marking, provided all conditions specified in Article 5(5) are fulfilled.
To support consistent implementation across Member States, the Medical Device Coordination Group (MDCG) published MDCG 2023-1 in January 2023, providing detailed guidance on the application of this exemption.
What is Article 5(5)?
Article 5(5) of the EU MDR permits eligible health institutions established within the European Union to manufacture, modify, and use medical devices under their responsibility exclusively within the same legal entity.
These devices are commonly referred to as in-house devices.
Unlike commercially manufactured devices, in-house devices are not placed on the market and do not bear a CE mark. However, they remain subject to important regulatory requirements designed to ensure patient safety and device performance.
The exemption applies only when all conditions specified in Article 5(5) are met.
Why Was This Exemption Introduced?
Healthcare institutions frequently encounter situations where commercially available CE-marked devices cannot adequately address specific clinical requirements.
Examples include:
- Rare diseases requiring specialized diagnostic tests
- Patient-specific devices developed for unique clinical circumstances
- Laboratory-developed diagnostic tests (LDTs)
- Hospital-developed medical software
- Specialized diagnostic methods where commercial alternatives do not provide the required clinical performance
Rather than preventing healthcare providers from meeting these needs, Article 5(5) enables controlled in-house manufacturing while maintaining appropriate regulatory oversight.
What Is an In-House Device?
An in-house device is a medical device that:
- is manufactured under the responsibility of a health institution;
- is used exclusively within the same legal entity;
- is not transferred or supplied to another legal entity;
- is intended to address specific patient or institutional clinical needs; and
- complies with all applicable conditions of Article 5(5).
Examples include:
- Laboratory-developed tests (LDTs)
- PCR assays prepared by hospital laboratories
- Hospital-developed clinical software
- Patient-specific devices
- 3D-printed surgical guides manufactured within a hospital
Which Organizations Can Use This Exemption?
The exemption applies only to eligible health institutions established within the European Union whose primary purpose is patient care or public health.
Examples include:
- Hospitals
- Clinical laboratories
- Public health institutes
- University hospitals
- Other healthcare institutions established within the EU
The exemption does not apply to:
- Commercial medical device manufacturers
- Organizations that are not health institutions
Key Conditions Under Article 5(5)
To benefit from the exemption, health institutions must satisfy all conditions specified in Article 5(5).
1. Devices Must Remain Within the Same Legal Entity
- Devices manufactured under Article 5(5) may only be used within the same legal entity.
- They must not be sold, transferred, or supplied to another legal entity.
- Even where hospitals collaborate, the exemption applies only if they belong to the same legal entity.
2. Manufacturing Must Not Be Conducted on an Industrial Scale
- Article 5(5) is intended to support healthcare delivery—not commercial manufacturing.
- Production should only meet the institution’s own clinical needs and must not be conducted on an industrial scale.
3. An Appropriate Quality Management System Is Required
Health institutions must operate under an appropriate Quality Management System (QMS) covering the manufacture and use of in-house devices.
The QMS should address:
- Risk management
- Manufacturing controls
- Device traceability
- Document control
- Corrective and preventive actions (CAPA)
- Change management
- Continuous improvement
For medical laboratories, accreditation to ISO 15189 may support compliance; however, ISO 15189 alone does not demonstrate fulfilment of all Article 5(5) requirements.
4. Compliance with Applicable General Safety and Performance Requirements (GSPRs)
Although CE marking is not required, in-house devices must comply with the relevant General Safety and Performance Requirements (GSPRs) set out in Annex I of the MDR.
Depending on the device, this may include:
- Risk management
- Safe device design
- Performance validation
- Appropriate labelling
- Traceability
- Storage and handling requirements
- Instructions for use
5. Demonstrate That an Equivalent CE-Marked Device Cannot Meet Clinical Needs
One of the most important requirements is demonstrating that:
the specific needs of the target patient group cannot be met, or cannot be met at the appropriate level of performance, by an equivalent device available on the market.
This justification must be documented before manufacturing begins.
Health institutions should periodically review this assessment as new commercial devices become available.
6. Maintain Technical Documentation
Health institutions must prepare and maintain technical documentation describing:
- Device design
- Intended purpose
- Manufacturing process
- Manufacturing facilities
- Verification and validation activities
- Performance data
- Risk management documentation
- Manufacturing records
The documentation must be available for inspection by competent authorities upon request.
7. Make a Public Declaration Available
Health institutions must draw up and make publicly available a declaration containing:
- Name and address of the health institution
- Identification of the device
- Intended purpose
- Confirmation that applicable GSPRs have been met
- Justification where any applicable GSPR is not fully fulfilled
8. Monitor Device Performance Throughout Its Lifecycle
Responsibilities do not end once the device is placed into clinical use.
Health institutions should:
- Monitor device performance
- Investigate incidents
- Maintain complaint records
- Implement corrective and preventive actions (CAPA)
- Continuously improve the device where necessary
Benefits of Article 5(5)
The exemption enables healthcare institutions to:
- Develop innovative patient-specific solutions
- Support patients with rare diseases
- Improve access to specialized diagnostics
- Address unmet clinical needs
- Maintain patient safety without unnecessary regulatory burden
Challenges for Health Institutions
Although Article 5(5) offers flexibility, it also places significant regulatory responsibilities on health institutions.
Successful implementation requires:
- Robust Quality Management Systems
- Comprehensive technical documentation
- Risk management processes
- Performance evaluation and validation
- Competent personnel
- Ongoing monitoring and continuous improvement
Failure to meet these obligations may result in regulatory action by national competent authorities.
Conclusion
Article 5(5) of the EU MDR provides an important regulatory pathway that allows eligible health institutions to manufacture and use in-house medical devices when the specific needs of the target patient group cannot be met, or cannot be met at the appropriate level of performance, by an equivalent device available on the market.
However, this exemption is not an exemption from the MDR itself. Health institutions must establish appropriate quality management systems, comply with the relevant General Safety and Performance Requirements, maintain comprehensive technical documentation, justify the absence of suitable equivalent devices, and continuously monitor device safety and performance.
By implementing the requirements of Article 5(5) and following the guidance provided in MDCG 2023-1, health institutions can responsibly innovate while maintaining high standards of patient safety, quality, and regulatory compliance.
