Since 30 June 2025, the European Union (EU) has introduced its first-ever restriction in the area of public procurement of medical devices – limiting access for Chinese manufacturers to large contracts exceeding EUR 5 million. Brussels decided to act in response to the unequal conditions faced by European suppliers on the Chinese market.

“The new regulation of the European Commission is a signal that the EU wants to protect its own market and economic interests. For the first time, contracting authorities will be systematically required to exclude bids based on the country of origin,” explains lawyer and specialist in pharmaceutical and medical law, Peter Marenčák.

Background of the Investigation

On 24 April 2024, the European Commission launched an investigation into the practices and measures of the People’s Republic of China (PRC) in the field of public procurement of medical devices. The subject of the investigation was the suspicion of serious and repeated restrictions on the access of EU operators, goods, and services to the Chinese public procurement market.

Findings of the European Commission

Based on the investigation, whose results were published in January 2025, the Commission concluded that:

• the PRC has introduced a generally applicable system of favouring domestic products, which negatively affects the access of European operators to the Chinese market,
• this system applies across the board to all medical devices and disadvantages products manufactured in the EU,
• as a result, EU economic operators are being discriminated against.

Commission Measure – International Procurement Instrument (IPI)

On the basis of these findings, the Commission adopted Implementing Regulation (EU) 2025/1197, imposing a measure in the form of the exclusion of bids under Article 6(6)(b) of Regulation (EU) 2022/1031 (the so-called International Procurement Instrument – IPI).

Key Restrictions under the IPI Measure

Contracting authorities and contracting entities must exclude bids submitted in public procurement procedures by economic operators from the PRC if the following conditions are met:

1. the subject of the contract is the procurement of medical devices with CPV codes 33100000-1 to 33199000-1,

2. the estimated contract value is equal to or greater than EUR 5,000,000 (excluding VAT), and

3. the contract notice (or equivalent call for competition) was sent for publication, or the procurement procedure was launched, after 29 June 2025.

Obligations for Successful Tenderers

For contracts meeting the above conditions, contracting authorities must include in the tender documents the following obligations for successful tenderers:

• not to subcontract to PRC entities more than 50% of the total contract value,
• to ensure that, during contract performance, goods originating from the PRC covered by the IPI measure do not exceed 50% of the total contract value,
• to prove the origin of goods and services upon request,
• to pay a contractual penalty of 10–30% of the contract value in case of non-compliance with the above obligations.

“The new regulation significantly changes the rules for public procurement of medical devices in large contracts above EUR 5 million. Contracting authorities will have to adapt tender documentation, consistently exclude Chinese bidders, and implement mechanisms to control the origin of supplied devices. Suppliers will face increased requirements for transparency of origin, restrictions on subcontracting to PRC entities, and a broader integration of EU or third-country devices into their offers,” adds P. Marenčák.

Determining the Origin of Economic Operators and Medical Devices

The origin of an economic operator is determined according to Article 3 of Regulation (EU) 2022/1031. A legal entity will be considered an operator originating from the PRC if (i) it is established or otherwise organized under PRC law and conducts significant business operations in the PRC, or (ii) it is established or otherwise organized in a country where it does not conduct significant business operations and is directly or indirectly controlled by a PRC person(s).

The origin of goods is determined under the rules of non-preferential origin pursuant to Article 60 of the Union Customs Code and Commission Delegated Regulation (EU) 2015/2446. Practical details are further specified in the Commission’s Guidance on the application of the IPI Regulation (2023/C 64/04).

Monitoring during the Procurement Procedure

Contracting authorities may:

• request additional information on the origin of goods,
• exclude a tenderer who fails to provide the required information,
• request origin data also during contract performance.

The Commission recommends that contracting authorities invite successful tenderers to submit a voluntary declaration on the percentage share of PRC goods in the total contract value. A model text of such a declaration is included in the Commission’s Guidance 2023/C 64/04.

Exceptions to the Application of the IPI Measure

Contracting authorities and contracting entities may exceptionally decide not to apply the IPI measure if:

• all bids are submitted exclusively by entities from the PRC and meet the conditions of the tender, or
• there are urgent reasons of public interest, for example in the field of public health or environmental protection.

Transparency Obligation

Contracting authorities and contracting entities will be required to provide a report on the application of the adopted IPI measure through the contract award notice, indicating information on:

• the application of IPI measures,
• the number of bids from the PRC subject to the IPI measure,
• the number of excluded bids.

“According to the Commission, contracts with an estimated value above EUR 5 million represent approximately 59% of the overall EU public procurement market for medical devices. The remaining 41% consist of contracts with a lower value, which, however, account for as much as 96% of all procurement procedures for medical devices in the EU. It is therefore important to emphasize that ordinary contracts below EUR 5 million, which occur more frequently in practice, will not be affected by the measure under the IPI regulation,” concludes Peter Marenčák.