Regulatory delays and patent term erosion in medical device innovation: a two-market analysis of EU and US frameworks

The EU Medical Device Regulation (MDR 2017/745) strengthened pre-market scrutiny and post-market surveillance for medical devices. For high-risk devices, available evidence indicates longer conformity-assessment timelines than under the prior directive, compressing effective patent life because patent terms run from filing. Unlike pharmaceuticals, EU medical devices have no statutory mechanism to restore patent time lost to regulatory review. This paper examines the incentive and welfare implications of that asymmetry when firms develop for and commercialize in both the EU and the United States. We develop a continuous-time Hamilton–Jacobi–Bellman model with two markets and an explicit spillover channel capturing cross-jurisdictional reuse of clinical evidence and quality systems. In a single-market EU calibration, introducing a 3-year device SPC limited to Class III devices increases EU-directed development effort by 13.46% (95% CI: [12.8%, 14.1%]). In the two-market setting, total development effort rises by 5.6% (95% CI: [4.3%, 7.1%]), implying an attenuation ratio of 0.42: EU-only term restoration is partly diluted when firms optimize globally and the US market already offers patent term extension. A welfare calibration makes the innovation–monopoly–access trade-off explicit and yields an interior optimal duration. The legal starting point is Case C-527/17 (Boston Scientific), which confirms that CE certification under the medical device regime does not satisfy the marketing-authorization requirement of Regulation 469/2009; any device-specific term-restoration mechanism therefore requires legislation rather than judicial extension.