EU adopts restrictions on access of Chinese companies to EU public procurement for medical devices

Background: IPI and the China medical device investigation

The IPI Regulation aims to improve access of EU economic operators to the public procurement markets of third countries. It allows the European Commission to investigate alleged third-country restrictive measures or practices in relation to public procurement and to adopt measures (“IPI measures”) to limit the access of economic operators, goods or services from the concerned third countries to EU public procurement procedures.

On 24 April 2024, the European Commission launched an investigation concerning certain measures and practices adopted by China restricting the access of EU economic operators to the Chinese public procurement market for medical devices. The Commission published its final report on 14 January 2025, concluding that Chinese policies and procurement mechanisms systematically disadvantage foreign suppliers and affect all categories of medical devices in a way that results in a serious and recurrent impairment of access of EU companies and EU-made medical devices to the public procurement market for medical devices in China.

Key findings: A “buy China” strategy in practice

The Commission identified two core restrictive practices/measures implemented by China:

• “Buy China” policy: China has introduced several measures favouring the procurement of domestic medical devices and restricting the procurement of imported ones. The “Made in China 2025” Strategy sets specific targets for the share of domestically produced high-end medical devices procured by county hospitals, which should reach 70% by 2025 and 95% by 2030. At the same time, procurement of imported medical devices is subject to a specific and cumbersome approval procedure. These policies result in de facto exclusion of foreign-made devices, including those of EU manufacturers, even where they offer superior quality or innovation.
• Centralised volume-based procurement: China’s procurement system relies heavily on large-scale tenders focused on price ceilings and maximum price margins for bid selection. This model leaves little room for foreign suppliers whose products may not compete on price alone, especially when compared with domestic companies that receive State support. The Commission found that 87% of public procurement contracts reviewed involved direct or indirect discrimination against imported devices.

Despite consultations, China did not offer credible commitments that would address the discriminatory measures and practices identified.

IPI measure adopted

As a result of the above, the European Commission decided to exclude Chinese companies from EU government purchases of medical devices exceeding €5 million. The European Commission initially considered two potential IPI measures: (i) applying a score adjustment to tenders submitted by Chinese economic operators, or (ii) excluding such tenders altogether. However, it ultimately concluded that, in this case, the exclusion of tenders submitted by Chinese economic operators is the most appropriate measure to restrict their access to EU public procurement procedures for all categories of medical devices with an estimated value of ≥ EUR 5,000,000 (net of VAT). The scope of the IPI measure covers:

1. all EU procurement procedures concerning all categories of medical devices falling under CPV code 33100000-1 to 33199000-1;
2. procurement procedures organised by all EU contracting authorities and contracting entities; and
3. affecting all economic operators originating in China.

An exception applies where only bidders from China would be able to meet the tender requirements or would be the only ones able to offer specific medical devices necessary for overriding reasons relating to the public interest. In such case, EU contracting authorities and contracting entities would be allowed not to apply the IPI measure.

This IPI measure was deemed adequate and proportionate to the discriminatory practices put in place and implemented by China, and was considered to most effectively remedy the level of impairment of access of EU medical device companies to the Chinese public procurement market for medical devices. While some EU importers and EU companies manufacturing medical devices in China may face challenges as a result of the IPI measure, the European Commission estimates that approximately 96% of all EU procurement procedures of medical devices would fall outside the scope of the IPI measure, representing approximately 41 % of the total EU medical devices procurement value. Additionally, EU importers would still be able to sell 50% of the medical devices imported from China affected by the IPI measure.

Timeline

The IPI measure will remain in effect for five years, until June 29, 2030, unless the European Commission decides to withdraw or suspend it earlier if it determines that China has taken adequate corrective steps to address the barriers limiting EU operators' access to its public procurement market for medical devices.

Authored by Anastasia Vernikou.