A distribution strategy for medical devices in Europe is the deliberate choice of how a device moves from the manufacturer to the hospital, and which legal entity holds the economic operator role in between. There are three models: direct sales, where the manufacturer sells to hospitals without an intermediary; distributor partnership, where a local partner holds stock and sells into a territory under MDR Article 14 obligations; and hybrid, where the manufacturer runs direct in one or two home markets and distributors everywhere else. The right choice depends on device price, buyer concentration, team capacity, reimbursement complexity, and how much margin the founder is willing to trade for reach. The wrong choice is the one that does not match the regulatory file, because changing channels after certification means redoing labelling, quality agreements, and vendor paperwork from scratch.

By Felix Lenhard and Tibor Zechmeister. Last updated 10 April 2026.

TL;DR

  • There are three distribution models for medical devices in Europe: direct sales, distributor partnership, and hybrid. Each has different MDR obligations, cost structures, and growth dynamics.
  • Under MDR Article 14, a distributor carries legal duties that a generic commercial reseller does not, including verification of CE marking, storage conditions, complaint register, and cooperation on corrective action.
  • Under MDR Article 13, an importer is the entity that first places a device from outside the Union on the EU market. Importer and distributor are distinct legal roles and often sit in different companies.
  • Under MDR Article 25, every economic operator in the chain has to identify the next and previous entity they supplied or received the device from, for the traceability period set by the Regulation.
  • Direct sales keep margin and control but require a real sales team. Distributors give reach without headcount but cost 25 to 45 percent of the end price. Hybrid is the default for capital-efficient founders.
  • The distribution decision should be made before certification, because it changes labelling, quality agreements, and the content of the technical file.
  • Switching models after launch is expensive and slow. Plan the three-year path at the start so the first model does not paint the company into a corner.

Why the distribution decision gets made too late

Most MedTech founders treat distribution as a post-certification problem. The assumption is that once the CE mark is in hand, the question of who sells the device can be worked out calmly with a few partner meetings. That assumption is where the year after certification gets burned.

Distribution choice shapes the regulatory file. A direct-sales file and a distributor file look different in several places. The labelling has to name the importer if the device crosses into the Union from outside. The quality agreements with partners have to name the Article 14 obligations that apply to them. The vendor onboarding packs that hospitals will demand have to match the entity that is actually selling the device. The post-market surveillance system has to collect complaints through whichever path the device travels. Changing the distribution model after certification is not a paperwork update. It is a rebuild of several sections of the file.

The founders we have watched get this right make the decision during the clinical investigation phase, eighteen months before the target certificate, and build the regulatory file around it. The founders who get it wrong treat distribution as a commercial conversation that happens after the regulatory team finishes their work, and then discover that the regulatory team would have made different choices if they had known what the commercial team wanted.

This post walks the three models, names the MDR obligations that apply to each, and gives the framework for choosing.

The three distribution models

Model 1 — Direct sales

In a direct-sales model, the manufacturer sells the device to the end buyer with no intermediary. The manufacturer handles order intake, invoicing, shipping, storage, delivery, training, support, returns, and complaint handling. No distributor sits in the middle. No margin is shared with a partner.

The trade-offs are sharp. Margin is at its highest because nobody else is taking a cut. The customer relationship is owned end to end, which means the feedback loop from the first clinical users back to the product team is short and clean. Complaints arrive directly into the manufacturer's QMS without being filtered through a third party. Sales conversations produce real intelligence about what the buyer actually values.

The cost is a real sales operation. Even a small direct presence in one country means at least one senior clinical salesperson, one support contact for training and installation, and a back office that can raise invoices and collect payment in the local currency and language. For a device selling into twenty hospitals, that cost is manageable. For a device selling into two thousand hospitals across eight countries, that cost is a company-ending budget line.

Direct works when the device has a high per-unit price that can absorb the sales cost, when the buyer population is concentrated enough that one person can realistically cover it, and when the founder is willing to do the first ten sales calls personally to learn what the market actually wants.

Model 2 — Distributor partnership

In a distributor model, the manufacturer sells the device to a local partner who already has relationships with the target hospitals, holds stock, handles local shipping, and carries the customer-facing presence. The distributor takes a margin — typically 25 to 45 percent of the end price, depending on country, category, and how much clinical support the distributor provides.

MDR Article 14 gives this role a specific legal shape. A distributor under the MDR is any actor in the supply chain, other than the manufacturer or the importer, that makes a device available on the market up to the point of putting into service. Before making the device available, the distributor has to verify that the device bears the CE marking, that the EU declaration of conformity has been drawn up, that the device is accompanied by the information required under Article 10(11), that the importer has complied with Article 13 where applicable, and that a UDI has been assigned. (Regulation (EU) 2017/745, Article 14.) The distributor also has to keep storage and transport conditions within the manufacturer's specifications, keep a register of complaints and non-conforming devices, and cooperate with competent authorities on corrective action.

A distributor who does not know these obligations is not a distributor. They are a commercial reseller holding a device that a regulator will eventually ask questions about. A serious distributor asks for the Article 14 pack before signing anything. A founder whose first response to that request is "what pack" has a problem before the partnership starts.

Distributor partnerships give reach without headcount. One distributor covers a country the manufacturer would otherwise need to staff. The price is margin, customer intimacy, and the feedback loop. A complaint filed with a distributor in Milan arrives at the manufacturer's QMS days or weeks later, filtered through the distributor's own processes. A clinical insight from a surgeon in Porto never reaches the product team at all unless the distributor relays it deliberately.

Model 3 — Hybrid

The hybrid model is what most capital-efficient MedTech startups settle on after the first year. Direct in one or two home-country markets where the founder can close the first deals, learn the sales motion, and build reference sites. Distributors in the rest of Europe where hiring a local team is unrealistic with the available runway.

Hybrid gets the learning loop from direct and the reach from distributors without paying the full cost of either at national scale. The home market funds the discovery. The distributor markets fund the expansion. When the company reaches the scale where distributor margins become too expensive in a specific country, that country can be converted to direct — a deliberate, planned transition that the founder can afford by then.

The hybrid model is also the one that exposes the regulatory file to both sets of requirements. The home-market sales operation has to act as its own internal distributor under the QMS even though it is not a separate legal entity. The partner markets need clean Article 14 packs. The labelling, the quality agreements, and the vendor onboarding pack have to work for both scenarios at once. Done well, this is a small amount of extra discipline. Done badly, this is the founder rebuilding the file six months after launch.

MDR obligations on each model

The same three MDR articles govern every distribution model, but they land in different places depending on who is holding the device.

Direct sales. The manufacturer under Article 10 carries every obligation. Because there is no separate distributor legal entity, the manufacturer's internal sales operation has to handle the verification, storage, complaint register, and corrective action cooperation that Article 14 would otherwise pin on a distributor. These duties do not disappear in direct sales; they collapse into the manufacturer. Under Article 25, the manufacturer still has to identify the next entity they supplied — which in direct sales is the hospital itself. (Regulation (EU) 2017/745, Article 25.)

Distributor partnership. The manufacturer still holds Article 10. The distributor holds Article 14 independently, with its own legal accountability. If the device crosses into the Union from a non-EU manufacturing site, an importer under Article 13 sits between the manufacturer and the distributor. (Regulation (EU) 2017/745, Article 13.) Importer obligations include verifying that the device bears the CE marking, that the EU declaration of conformity has been drawn up, that the manufacturer has designated an authorised representative where required, and that the importer's own name and registered place of business are indicated on the device or its packaging or accompanying documents. The Article 25 identification obligation means every entity in the chain has to know who they supplied the device to and who supplied it to them, for the retention period the Regulation sets for the device class.

Hybrid. The manufacturer runs two parallel chains. In the direct market, Article 10 obligations absorb the Article 14 activities into the manufacturer's own operation. In the partner markets, Article 14 obligations sit with the distributors under contracts that name the duties explicitly. Article 25 traceability still runs end to end across both chains. Hybrid is not harder than either pure model — it is two pure models side by side, each run cleanly, with one QMS holding them together.

The cost picture

The sticker-price comparison is deceptive. Direct looks expensive because the team cost is visible and upfront. Distributors look cheap because the margin share is invisible until the first invoice lands. The real comparison has to include the total cost of sales, the speed to first revenue, and the risk of each model over three years.

Direct, one country, small team: typically 250,000 to 450,000 euros per year all-in for one salesperson, one clinical support contact, and the allocated share of back-office cost. In a market where the device closes ten to twenty deals per year at realistic prices, direct can produce better net contribution than a distributor. In a market where the device closes two or three deals per year, direct loses money and the distributor wins.

Distributor, one country: zero fixed cost to the manufacturer, 25 to 45 percent of end price shared with the partner per unit sold. The manufacturer's cost is mostly the regulatory file work to support the partnership, the occasional travel to visit, and the time spent resolving issues that flow back through the distributor's filter. The cash-flow profile is softer — no large upfront commitment — and the risk if the market turns out to be smaller than forecast is much lower.

Hybrid: the direct-market cost plus a smaller regulatory overhead for each partner country. The math works when the direct market is big enough to fund the team and the partner markets produce incremental contribution without further fixed cost.

The question to run the numbers against is not "which model is cheapest" but "which model pays for itself fastest with the runway we actually have." A twenty-four-month runway argues against direct in more than one country. A twelve-month runway argues against direct in any country that is not the home market.

The speed versus control trade-off

Speed and control sit on opposite sides of the distribution decision. Direct gives maximum control — every sales conversation, every complaint, every clinical insight reaches the manufacturer cleanly and fast. Distributor gives maximum speed of market coverage — one contract opens a country the manufacturer could not otherwise staff for two years.

The mistake is treating this as a one-time decision. It is a phase decision. In phase one, the first year after certification, control matters more than coverage because the product is still learning what the buyer wants. Direct in the home market is almost always correct in phase one, because the feedback loop is the primary asset. In phase two, years two and three, coverage matters more because the product has stabilised and the company needs to find the ceiling of the market. Distributors in non-home markets become the right answer in phase two. In phase three, when the market ceiling is visible and the margin pressure is real, selected partner markets convert to direct.

Founders who lock in one model for the full three years usually miss the phase transition. The ones who plan the transition in advance — with distributor contracts that include termination clauses for conversion to direct, and with a regulatory file that can carry both models — preserve the option.

Country-by-country fit

Europe is not one market. The distribution choice that works in Germany does not automatically work in Italy, and the one that works in the Netherlands does not automatically work in Spain. Four dimensions drive the country-level fit.

Buyer concentration. In countries with a small number of large hospital groups — the Netherlands, Denmark, parts of the UK — direct sales can cover the market with a small team. In countries with a fragmented hospital landscape — Italy, Spain, Germany at the regional level — the same team cannot possibly cover it, and distributors dominate.

Reimbursement complexity. In countries where the reimbursement decision is national and standardised — France, the UK — a direct team can master the path once and reuse it. In countries where reimbursement is regional or hospital-specific — Germany, Spain, Italy — local distributors with existing relationships navigate faster than any outside team can.

Language and local presence. Hospitals prefer to buy from someone who speaks the local language and can be on site the same day. A German distributor who has been in the market for fifteen years outsells a remote direct team from another country even when the product is identical.

Tender structure. In countries dominated by public tenders — Italy, Spain, Portugal — distributors who understand the local tender mechanics are often essential. The direct team that has never written a public-tender response will not win against a local distributor who writes twenty of them a year.

The practical consequence is that the distribution model often has to be chosen country by country, not Europe-wide. Direct in the home market, direct in one or two concentrated buyer markets where the same team can cover it, distributors everywhere else — this is the shape most European MedTech startups converge on by year three.

When to switch models

The moment to reconsider a distribution model is when one of four things happens. The distributor in a country is not hitting the forecast, and the reason is capacity rather than product. The direct market has matured to the point where another country has become a plausible direct play. A distributor contract is expiring and the renewal terms have become unattractive. Or a regulatory change — a reimbursement code, a national registry, a new tender framework — shifts the fit of the current model.

Switching out of a distributor and into direct in a country is a deliberate project. It typically takes six to twelve months from the decision to full handover, and it requires cooperation from the outgoing distributor that only works if the original contract anticipated the transition. The expensive version is the one where the founder tries to terminate the distributor mid-contract, loses the installed base in the fight, and has to rebuild the customer list from scratch.

Switching from direct to distributor in a country is rarer but happens when the founder realises the direct team is under-utilised and the fixed cost cannot be justified. The hand-off to a distributor is easier — the distributor inherits a clean customer list and pre-existing references — but the cultural change inside the company is hard, because the team that built the market gets reassigned or let go.

Common mistakes

  • Signing a distributor contract that does not name Article 14 obligations and discovering at the first audit that the distributor has no processes to meet them. The contract is the document the competent authority will read, and a vague contract is a compliance liability.
  • Treating the distributor like a logo on a pipeline slide instead of a legal partner whose obligations have to be managed. A distributor who is not trained on the product, not briefed on the complaint flow, and not audited on storage conditions is a field safety corrective action waiting to happen.
  • Locking in exclusivity without performance clauses. An exclusive distributor who does not deliver kills a country for the full term of the contract. Exclusivity is a commercial gift and has to be earned with minimum volumes, marketing commitments, and measurable targets.
  • Forgetting the importer seat in non-EU supply chains. If the device is manufactured outside the Union, there is an importer under Article 13 regardless of whether anyone thought about it. Unassigned importer status surfaces at the first customs check.
  • Running a direct team in a country where the buyer population cannot support it. Two deals a year at twenty thousand euros each does not fund a salesperson. The math has to work before the hire, not after.
  • Using a generic commercial contract copied from another industry. Medical device distribution contracts have regulatory content that a software reseller contract does not, and treating them as interchangeable exposes the manufacturer to risks the template never anticipated.

The Subtract to Ship angle on distribution

Distribution is one of the places where the instinct to add is loudest. Add a distributor in every country to maximise coverage. Add a direct team to show the investors you are serious. Add a key account manager for every large hospital group. Add exclusivity to every partner so nobody feels second class. Every addition feels like progress, and the cumulative result is a distribution footprint that is too wide to manage, too expensive to fund, and too entangled to change.

Subtract to Ship applied to distribution produces a narrower, cleaner picture.

  • Every country gets one distribution model, chosen deliberately and justified against buyer concentration, reimbursement complexity, and the runway available.
  • Every distributor contract names the Article 14 obligations explicitly, with audit rights, performance clauses, and termination conditions that protect the option to convert the market later.
  • Every direct country has a team big enough to actually work and no bigger. A salesperson without clinical support does not close deals. A clinical support person without a salesperson does not cover the pipeline. Both together with nothing else is the minimum.
  • Every non-EU manufacturing source has a named importer of record under Article 13, with the importer's obligations written into the supply contract with the manufacturing partner.
  • Every seat in the chain is traceable under Article 25. If the question "who did we supply this device to" cannot be answered from the system in minutes, the system is not ready.
  • Every addition to the footprint has to clear the test. Does this distributor, this country, this team serve a buyer that actually exists and has budget? If not, it is drag.

Read the Subtract to Ship framework for MDR for the same discipline across the whole certification project, and the MedTech value chain for the upstream view of where distribution sits in the full chain from workbench to patient.

Reality Check — Where do you stand on distribution?

Answer these honestly. If more than two are weak, your distribution strategy is not ready for the week after certification.

  1. Have you chosen a distribution model for each of your first three target countries, with a written rationale that addresses buyer concentration, reimbursement complexity, and the runway you actually have?
  2. Do your distributor contracts name Article 14 obligations explicitly, or are they generic commercial templates you reused from another deal?
  3. If your device is manufactured outside the Union, have you named the importer of record under Article 13 and written their obligations into the supply contract?
  4. Can you produce, on demand, the traceability chain from the manufacturing batch to the specific hospital that received it, as Article 25 requires?
  5. Does your regulatory file reflect the distribution model you actually plan to run, or the one a consultant wrote about in a template?
  6. Have you modelled the three-year distribution path, including the phase transitions, so the first model does not paint the company into a corner?
  7. Do you know the minimum volume at which direct sales beat distributors in each target country, and where each country sits today relative to that threshold?
  8. If a distributor in one of your partner countries went out of business tomorrow, do you have a plan that keeps the installed base supplied through the next eighteen months?

Frequently Asked Questions

What is a distribution strategy for medical devices in Europe? A distribution strategy for medical devices in Europe is the deliberate plan for how a device moves from the manufacturer to the hospital and which legal entity holds each role in the chain. The three models are direct sales, distributor partnership under MDR Article 14, and hybrid. The strategy covers channel choice, country selection, partner contracts, pricing splits, and the regulatory obligations that follow each model.

What does MDR Article 14 require of distributors? Article 14 requires distributors to verify, before making a device available on the market, that the device bears the CE marking, that the EU declaration of conformity has been drawn up, that the device is accompanied by the information required under Article 10(11), that the importer has complied with Article 13 where applicable, and that a UDI has been assigned. Distributors also have to maintain storage and transport conditions per the manufacturer's specifications, keep a register of complaints, and cooperate with competent authorities on corrective action.

Is direct sales cheaper than working with distributors? It depends on the country and the deal volume. Direct sales have a high fixed cost — a sales team, clinical support, local back office — but keep the full margin on every unit sold. Distributors have zero fixed cost but share 25 to 45 percent of the end price. In a country where the device closes ten or more deals per year at a serious price, direct can beat distributors on net contribution. In a country with two or three deals per year, distributors win.

Do you need a distributor for every EU country? No. Many MedTech startups run a hybrid model — direct in one or two home-country markets where the founder can close the first deals personally, and distributors in the rest of Europe where hiring a local team is unrealistic. Countries with concentrated buyer populations and standardised reimbursement can be covered direct with a small team. Countries with fragmented hospital landscapes, regional reimbursement, or tender-driven purchasing almost always need local distributors.

What is the difference between an importer and a distributor under the MDR? An importer under Article 13 is the entity that first places a device from a non-EU source on the Union market. A distributor under Article 14 is any actor downstream of the importer who makes the device available on the market up to the point of putting into service. Their obligations overlap but are not identical. Importers have additional duties around labelling their own identity on the device and verifying that the non-EU manufacturer has designated an authorised representative.

Can a distributor become a manufacturer under the MDR? Yes, under specific circumstances. If a distributor places a device on the market under their own name or trademark, changes the intended purpose, or modifies the device in a way that may affect compliance, they are deemed a manufacturer and take on the full set of Article 10 obligations. Founders who allow distributors to rebrand should understand that the rebranded device is, from the Regulation's perspective, a different manufacturer's product.

When should the distribution decision be made? Before certification, not after. The distribution model shapes labelling, quality agreements, vendor onboarding packs, and parts of the technical file. Changing models after the certificate is issued means redoing several sections of the file and resubmitting to the Notified Body for affected changes. Founders who plan the distribution model during the clinical investigation phase land certification and market entry aligned. Founders who leave it for later lose months rebuilding paperwork.

Sources

  1. Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices, consolidated text. Articles cited: Article 13 (general obligations of importers); Article 14 (general obligations of distributors); Article 25 (identification within the supply chain). Official Journal L 117, 5.5.2017.
  2. Regulation (EU) 2023/607 of the European Parliament and of the Council of 15 March 2023 amending Regulations (EU) 2017/745 and (EU) 2017/746 as regards the transitional provisions for certain medical devices and in vitro diagnostic medical devices. Official Journal L 80, 20.3.2023.

This post is part of the MedTech Go-to-Market and Commercial Strategy series in the Subtract to Ship: MDR blog. Authored by Felix Lenhard and Tibor Zechmeister. Distribution strategy is a regulatory decision and a commercial decision at the same time. Make it deliberately, match the regulatory file to the choice, and plan the three-year path so the first model does not become the ceiling.