The EU ban on Chinese medical devices from public procurement markets: implications for the Life Sciences sector
In a first for procurement and international trade policy in the EU, the European Commission has recently imposed a ban on Chinese suppliers of medical devices from participating in higher value public procurement procedures in the EU. This note outlines the scope of the ban and what it might mean for companies operating in the medical device sector.
Background
On 19 June 2025, the European Commission issued a regulation, known as an IPI measure, restricting access of Chinese suppliers of medical devices to public procurement markets in the EU.
The IPI measure was the first such measure to be issued under the International Procurement Instrument, a 2022 EU regulation empowering the Commission to impose retaliatory measures on suppliers, goods and services originating from non-EU territories where access for EU suppliers to public procurement markets was restricted.
The restriction on Chinese suppliers of medical devices followed a year-long investigation by the Commission into the procurement practices of the Chinese government in the health sector which revealed a series of measures and practices favouring the procurement of Chinese medical devices and disadvantaging non-Chinese suppliers.
What does the IPI measure cover?
The IPI measure bans economic operators originating in China from participating in public procurement procedures for medical devices throughout the EU where the estimated value of the contract is €5 million or more. The ban applies to all types of medical devices.
The IPI measure does not directly ban Chinese-manufactured medical devices from EU public procurement markets. EU-based suppliers can still sell Chinese-manufactured devices in EU public procurement markets. However, successful tenderers in procurements covered by the IPI measure will have to ensure that Chinese-made devices comprise no more than 50% of the total value of the contract. Subcontracting to a Chinese supplier is also permitted but only up to 50% of the total value of the contract.
How to determine where an economic operator originates?
In the normal case of a company or other legal entity, its origin will be the country where it is constituted or otherwise organised provided that it also has substantive business operations in that country.
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Subscribe nowA Chinese-incorporated entity with its principal business operations in China will therefore clearly originate in China.
A legal entity that is constituted in an EU Member State will originate in that State provided that it has substantive business operations in that State. This is the case even if the entity is owned/controlled by a Chinese entity or person. The requirement for "substantive business operations" is intended as an anti-avoidance measure to prevent Chinese suppliers simply opening a shell-company in the EU (or other state with whom the EU has a relevant trade agreement) to avoid the ban. It is currently unclear how much of a business operation is required to qualify as "substantive".
However, where an entity is part of a group that includes at least one Chinese entity, the whole group is prohibited from bidding in procurements covered by the IPI measure, unless the Chinese entity contributes no more than 15% of the value of the tender and is not relied on to meet any of the selection criteria.
What are the implications for EU-based suppliers of medical devices?
EU-based suppliers of medical devices could be affected by the IPI measure in a number of ways.
- EU suppliers which are owned by or have a degree of Chinese investment in their corporate groups will need to look carefully at the influence (if any) exercised by their Chinese owners/investors over their businesses in the EU and in particular over their tendering practices to minimise or eliminate reliance on the Chinese owner/investor for the purpose of responding to tenders covered by the IPI measure. EU suppliers in this position can expect to be asked to provide explanations as to why they should not be excluded from relevant tenders.
- An EU supplier that is considering seeking investment from a Chinese entity will need to consider carefully what the implications of such an investment might be for future participation in public procurements in the EU.
- EU suppliers that either outsource manufacturing of medical devices to factories in China or distribute Chinese-made devices in the EU would be well advised to seek alternative, non-Chinese, sources of manufacturing/supply in order to maintain the ability to fully perform contracts covered by the IPI measure.
- EU suppliers can expect to see questions in tender documents asking them to explain/confirm how, if successful, they will be able meet the requirement that no more than 50% of the value of contract is accounted for by Chinese-manufactured devices.
- EU suppliers might use the IPI measure proactively to challenge a decision of a contracting authority to award a £5 million + medical device contract, for example, to an entity with Chinese ownership.
What are the implications for UK suppliers?
UK-based suppliers of medical devices are entitled to bid for public contracts in the EU on the same basis as EU-based suppliers in the light of the UK's and EU's mutual commitments under the WTO Government Procurement Agreement and the UK/EU Trade and Cooperation Agreement. The points listed above therefore apply as much to UK suppliers of medical devices when bidding in public procurements in the EU as they do to EU suppliers.
The UK has not introduced similar restrictions on Chinese suppliers or devices in relation to public procurements in the UK.
If you would like to discuss any of the issues raised in this blog, please contact our Public Procurement specialists, Nick Pimlott and Holly Johnson.
