Exclusion Of Chinese Medical Devices From Public Procurements

Background

On 19 June 2025, the European Commission (the "Commission") adopted its first-ever measure under the International Procurement Instrument ("IPI"). The adoption of the IPI measure is a result of an investigation initiated in April 2024. The Commission found that China has systematically restricted access to its public procurement market for medical devices by implementing a wide range of rules and practices that discriminate against foreign suppliers and favor domestic products. In particular, the Commission highlighted the use of a volume-based procurement system that drives prices to unsustainable levels.

According to the Commission, attempts to reach a cooperative solution with China have failed, ultimately leading to the adoption of the IPI measure. The IPI measure entails that contracting authorities are required not to procure medical devices originating from China, which means that they are obliged to exclude tenderers originating from China and ensure that no more than 50 percent of the medical devices supplied by the winning (non-Chinese) tenderer are sourced from China.

The IPI measure entered into force on 30 June 2025 and applies to public procurements published on or after that date. It will remain in force for an initial period of five years, unless it is withdrawn or suspended earlier. Following the five-year period, it may be extended for an additional five years, subject to a review by the Commission.

Scope of the IPI measure

The IPI measure applies to public procurements fulfilling the following conditions:

1. The public procurement is covered by the Public Procurement Directive (Directive 2014/24/EU), the Utilities Directive (Directive 2014/25/EU) or the Concession Directive (Directive 2014/23/EU). As the Danish Public Procurement Act implements the Public Procurement Directive, the IPI measure applies to procurement procedures under the Danish Public Procurement Act.
2. The public procurement relates to the purchase of medical devices covered by the CPV codes 33100000-1 to 33199000-1. These codes encompass a wide range of products from basic medical supplies to advanced diagnostic equipment and implants, including e.g. X-ray machines, radiation therapy apparatuses, hearing aids, ostomy bags, syringes and needles, bandages, surgical gloves, crutches, wheelchairs, medical clothing, and dentures.
3. The estimated value of the contract or framework agreement for the purchase of the medical devices is EUR 5,000,000 (excluding VAT) or more.

Although the above conditions are fulfilled, exceptions can be made where the necessary equipment can only be supplied by Chinese companies, or if there is a risk to public health. In such cases, the contracting authority may refrain from applying the IPI measure but is then obliged to provide the Commission with information on the non-application of the IPI measure within 30 days of awarding the contract.

Obligations on contracting authorities

The IPI measure imposes an obligation on contracting authorities not to procure medical devices originating from China. This obligation has two key components. First, contracting authorities are obliged to exclude tenderers originating from China. Second, they must ensure that no more than 50 percent of the medical devices supplied by the winning (non-Chinese) tenderer are sourced from China.

Contracting authorities are required to request adequate documentation demonstrating compliance with the obligation that no more than 50 percent of the medical devices are sourced from China. This documentation must be provided no later than upon completion of the contract. In the event of non-compliance, contracting authorities must impose a charge of 10 to 30 percent of the total value of the contract.

Contracting authorities are required to include the obligations under the IPI measure in the tender documents, along with a reference to both the IPI and the specific IPI measure. Additionally, they must report the application of the IPI measure in the contract award notice, including the number of tenders received from Chinese tenderers and the number of offers excluded under the IPI measure.

Obligations on tenderers

The IPI measure also imposes obligations on (non-Chinese) tenderers participating in procurement procedures covered by the IPI measure, as they are prohibited from sourcing more than 50 percent of the medical devices from China.

Upon request, and no later than upon completion of the contract, the tenderer must provide the contracting authority with sufficient documentation demonstrating compliance with this obligation. In the event of non-compliance, the tenderer may be subject to a charge of 10 to 30 percent of the total value of the contract.

Determination of origin

To ensure compliance with the above requirements, contracting authorities must determine whether the tenderers participating in the procurement procedure and the medical devices originate from China.

A tenderer is considered to originate from China if it is constituted or otherwise organised under Chinese law and has substantive business operations in China. A tenderer is also deemed to originate from China if, despite not being constituted or organised in China or lacking substantive business operations there, the person or persons exercising dominant influence over the tenderer are from China.

Contracting authorities may, at any time during the procurement procedure, request information or documentation regarding the tenderer's origin. Examples of relevant documentation include business records (such as invoices and contracts), financial information (such as audited accounts and tax returns), and employee-related documentation (such as employment contracts).

The origin of the medical devices is to be determined in accordance with the rules of the Union Customs Code, as laid down in Regulation (EU) 952/2013 of 9 October 2013. The origin of medical devices must therefore be determined based on the principles of 'wholly obtained in a single country' and 'last substantial transformation'.

Contracting authorities may, at any time during the procurement procedure and no later upon completion of the contract, request information on the origin of the medical devices. Examples of such documentation include invoices or declarations from external suppliers, as well as certificates or declarations of origin issued by competent authorities.

Plesner's comments

The IPI measure introduces new obligations for both contracting authorities and tenderers in connection with public procurements of medical devices. It is important that all parties are fully aware of these requirements and their practical implications to ensure compliance throughout the procurement process.

Contracting authorities

For contracting authorities, it is essential to assess whether a public procurement procedure falls within the scope of the IPI measure. If it does, contracting authorities are required to exclude tenderers originating from China and to ensure that no more than 50 percent of the medical devices supplied by the winning (non-Chinese) tenderer is sourced from China. This obligation requires contracting authorities to carefully determine the origin of the tenderers and medical devices, and to request adequate documentation no later than upon completion of the contract. In addition, contracting authorities should consider including a specific clause in the contract to reflect the requirement that no more than 50 percent of the medical devices must be sourced from China, along with provisions on documentation requirements and the imposition of a financial charge in the event of non-compliance.

Tenderers

For tenderers, it is likewise important to be aware whether the public procurement is subject to the IPI measure and, thus, whether (non-Chinese) tenderers are restricted from sourcing more than 50 percent of the medical devices from China. Tenderers must be aware of this obligation for the entire duration of the contract. In the event of non-compliance, the tenderer may be subject to a charge of 10 to 30 percent of the total value of the contract.