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Public tenders account for roughly two thirds of all medical devices revenue in the EU. In 2023 alone, this reportedly translated into almost EUR 100 billion in annual purchases by national health ministries, regional health funds, hospitals and other contracting authorities/entities. Contracts with a total value of above EUR 5 million, which are now mostly shielded from Chinese input, are said to represent almost 60% of the total value of all EU medical-device tenders, covering items such as imaging suites, laboratory analyzers, and consumables covered by framework agreements.
Contracting authorities/entities of the EU Member States must now exclude Chinese companies from all public procurement opportunities for the sale of medical devices in the EU if the total contract value exceeds EUR 5 million (net). Moreover, successful bidders are required to guarantee that no more than 50% of their materials or components for the public contract or framework agreement originate from China. Exceptions are only possible where no alternative suppliers are available. These restrictions have been enacted through Commission Implementing Regulation (EU) 2025/1197 of 19 June 2025 "imposing an IPI measure restricting the access of economic operators and medical devices originating in the People's Republic of China to the European Union public procurement market for medical devices", which has come into effect on 30 June 2025. For the first time, the European Commission completed such an investigation under the IPI and implemented measures to limit the participation of economic operators from non-EU countries in the EU public procurement market.
In this client alert, we give you an overview of the most important requirements set out in the Commission Implementing Regulation (EU) 2025/1197 and its consequences on the market.
Please do not hesitate to contact us if you would like to explore any aspect in more detail. We are happy to help you navigate the evolving regulatory landscape and identify strategic pathways to ensure your continued economic success in the European market.
Obligated buyers
The IPI measure binds all EU Member State contracting authorities/entities that procure supplies under the EU Public Procurement Directive 2014/24/EU (this will cover the majority of procurements), the EU Utilities Procurement Directive 2014/25/EU (e.g., for procurements by state-funded airports) and the EU Concessions Directive 2014/23/EU (e.g., by way of a service concession for the provision of medical equipment), as implemented under national law.
Depending on whether the relevant Member State uses a centralized, a decentralized or a hybrid procurement model, the affected contracting authorities will be national or regional central purchasing organizations, member-based purchasing associations, hospital groups, public health funds, or individual buyers, such as single hospitals, state laboratories or other public agencies requiring medical devices.
Procurements under the EU Defence Procurement Directive and procurements by EU institutions are not covered by the IPI.
Affected procurements and kinds of products
The IPI restriction of the access of economic operators and medical devices originating in the People's Republic of China applies in all categories of medical devices categorized under the Common Procurement Vocabular (CPV) codes 33100000-1 to 33199000-1, defined in Regulation (EC) No 2195/2002, as amended. The respective codes encompass no less than 350 different kinds of products, including a wide variety of medical products, ranging from medical consumables to magnetic resonance imaging machines (and many more).
The IPI measure applies only to public procurement of these kinds of products if the estimated total contract value in a given tender procedure exceeds EUR 5 million for goods. The calculation shall be based on the total amount payable, net of VAT, including any form of option and any renewals of the contracts. With regard to framework agreements and dynamic purchasing systems, the value to be taken into consideration shall be the maximum estimated value net of VAT of all the contracts envisaged for the total term of the framework agreement or the dynamic purchasing system. Where a proposal for the acquisition of similar supplies may result in contracts being awarded in the form of separate lots, account shall be taken of the total estimated value of all such lots. Of course, the method used to calculate the estimated value of a procurement shall not be made with the intention of excluding it from the scope of the IPI measure. The same applies to any tactics where larger procurements are artificially split into separate procurements.
Sanctioned suppliers
An economic operator is "Chinese" for the purposes of the IPI if it is constituted or otherwise organized under the laws of the Republic of China and is engaged in substantive business operations in China (as further explained in the Commission Guidelines 2023/C 64/04 to facilitate the application of the IPI Regulation by contracting authorities and contracting entities and by economic operators).
Even an economic operator (e.g., a subsidiary) constituted or otherwise organized in the EU or another Non-EU country than China can be deemed "Chinese". Because if it is not engaged in substantive business operations in the territory of the country in which it is constituted or otherwise organized, the origin of the legal person is to be that of the person or persons who may exercise, directly or indirectly, a dominant influence on the legal person by virtue of their ownership of that legal person, their financial participation therein, or the rules which govern that legal person. This means that even economic operators of other countries can be deemed as "Chinese" if they are controlled by Chinese companies or persons.
Groups of economic operators (i.e., bidding consortia) are deemed "Chinese" if at least one of the members is Chinese (in the meaning summarized above) and its participation amounts to at least 15 % of the value of a tender submitted by that group – unless the Chinese member is necessary in order to fulfil the majority of at least one of the selection criteria in a public procurement procedure, in which case the consortium is covered by the IPI measure regardless of the 15 % rule.
Sanctioned products
Even if a successful bidder in a medical devices procurement is not a Chinese supplier, they are still required under the IPI measure to guarantee that no more than 50% of their materials or components for the public contract or framework agreement "originate" from China. Under the IPI, the origin of a good shall be determined in accordance with Article 60 of Regulation (EU) No 952/2013 (the Union Customs Code) (further explained in the Commission Guidelines 2023/C 64/04).
This means that goods wholly obtained in China or a Chinese territory shall be regarded as having their origin in China. If the production of the relevant goods involves more than one country or territory, the goods shall be deemed to originate in the country or territory where they underwent their last, substantial, economically-justified processing or working, in an undertaking equipped for that purpose, resulting in the manufacture of a new product or representing an important stage of manufacture.
Reaction from China and Outlook
Given the expected impact of the present IPI measure on the Chinese medical products industry, it is not surprising that the Chinese Government has already indicated that it will now similarly restrict government purchases of EU medical devices (with the exception of products made by European companies in China). China's finance ministry is reported to have said that the measures were necessary steps in reaction to the IPI measure.
The IPI instrument against Chinese medical devices is only one of several current examples of the changing global political landscape and its impacts on EU public procurement procedures. If you want to find out more about the EU's general policy direction towards "European sovereignty" requirements, consult our client alert "European Union: "Buy European" gets teeth."
