In this article we analyze the influence of the legal regulatory framework in Europe, established by the two directives on medical devices and active implantable devices, on the performance of innovation in a single European market. First, we describe in general the possible influence of a single European market on innovation and the institutional features of the particular harmonization approach (“New Approach”) we are looking at here. The empirical results presented derive from a survey investigation involving 150 firms that we defined as best innovators in the European medical devices industry from a pre-survey. The results confirm that the total impact of the New Approach regulation on firms' innovation in the long term is positive. However, it also becomes clear that the impact of regulation on innovation is limited if the factors are looked at individually and that there is a clear difference regarding short-term effects. To improve the regulatory framework, several policy actions are recommended.