EU's Proposed Restrictions on Chinese MedTech Firms in Public Procurement: Implications for Global Expansion

Geopolitical influences continue to spread.

Media reports indicate that EU member states are poised to approve punitive measures against China under the International Procurement Instrument (IPI),Chinese medical device manufacturers are prohibited from participating in tenders for EU public procurement projects valued at over €5 million for the next five years.On June 2 local time, EU member states voted on the proposal, but the European Commission refused to disclose the voting results, the specific details of the proposal, or the next steps.

How should we interpret this move? What challenges might it pose to Chinese medical device companies? And how should they respond in the future?

To better address the aforementioned questions, XiYi Medical, which specializes in providing customized overseas expansion solutions for Chinese medical device companies, invited Yuanxin Technology, a leading enterprise in the cardiovascular field with deep expertise in global markets, to discuss these issues. VCBeat has compiled and synthesized the discussion content.

The current trend of medical device companies expanding overseas is impressive.

Huang Junming, Head of Overseas Operations at Yuanxin Technology, pointed out that Chinese medical device companies are making an increasingly prominent appearance at the European Association of Percutaneous Cardiovascular Interventions Congress (EuroPCR 2025). In addition to well-established industry leaders such as MicroPort, Lepu Medical, and Huitai Medical, innovative enterprises including Kossel were also present and warmly received by attendees. In the high-end, cutting-edge segment of healthcare, Chinese companies are flourishing in overseas markets.

As Chinese innovative medical devices and high-value consumables steadily expand into overseas markets, Deng Xiaoyu, founder of Xiyi Medicine, emphasized that the industry’s development is being overshadowed by a new cloud of uncertainty—The EU Plans to Ban Chinese Medical Device Manufacturers from Bidding on EU Public Procurement Projects Worth Over €5 Million in the Next Five Years.

How Should We Correctly Interpret This Move?

Huang Junming stated, “In fact, the IPI Regulation was adopted as early as 2022. The EU launched an IPI investigation in April 2024, prompting discussions within the healthcare sector at that time. The current heated debate is linked to the voting results—although these results have not been made public, it is highly likely that Chinese companies will face unfair treatment (asymmetrical discrimination) in bidding for public procurement contracts exceeding €5 million in the future.”

For practitioners,The good news is that, on one hand, public procurement refers to government-initiated procurement targeting the public healthcare system, and does not restrict the out-of-hospital market, home-use market, or private healthcare system.That is, medical device companies that choose to establish a presence in the private healthcare system will not be affected by this policy;On the other hand, only tenders with a total value exceeding €5 million will be affected by this. It also means that Chinese companies will not face unfair treatment in all public procurement projects.At the current exchange rate, €5 million is equivalent to approximately RMB 41 million, meaning that only a small portion of projects may be affected by this.

Which enterprises are more susceptible to policy impacts?

In practice, companies specializing in high-value consumables (Class III implantable and interventional products) are generally less affected, as they typically enter into ongoing procurement agreements with hospitals rather than relying on one-off buyouts through winning bids. However, in terms of bid amounts, large-scale projects or government-led bundled procurement projects for low-value consumables are more likely to reach the €5 million threshold. Correspondingly,The companies most significantly affected are likely to be manufacturers of domestically produced high-end large-scale imaging equipment, surgical robots, low-value consumables, and low-value IVD products.

How should these companies respond? In fact, some potential response strategies have already emerged. Huang Junming noted:

First, there is the tactic of circumvention, whereby a €5 million lump-sum project is split into smaller packages of varying amounts to bypass restrictions in the bidding process.However, it may not be applicable to conventional medical consumables, which are often procured through tendering by European public hospitals or health systems via turnkey contracts, making it difficult to break them down into smaller packages.

Second, establishing local manufacturing facilities in Europe to circumvent the current unfair policies targeting Chinese enterprises.Major imaging equipment manufacturers, represented by United Imaging, have already established local production facilities in Europe; meanwhile, medical device companies, represented by Mindray, are also manufacturing products locally through acquisitions of European firms.

Third, choose to promote through private hospital channels.For certain low-value consumables and low-value IVD products, establishing manufacturing facilities in Europe could be considered, given the low probability and high difficulty of “unbundling” in public healthcare system tendering processes; however, this approach may entail higher costs. Alternatively, by focusing on distribution channels through private hospitals, companies can largely bypass concerns related to public hospital tendering procedures.

Fourth, breaking through limitations via differentiation.Certain high-end products can achieve a competitive edge by offering unique features (“what others lack, we have”) or superior quality (“what others have, we excel at”), thereby avoiding unfair treatment during the bidding and tendering process.

In practice, regardless of the type of enterprise, companies expanding into the European market must make a strategic choice: the public healthcare system typically entails lower prices but higher product volume, whereas the private healthcare system offers higher sales revenue and profit margins, along with more extensive feedback from physicians and end users.

While policies have intensified the burden on enterprises and increased uncertainty in industry development, some positive effects are also emerging.

Deng Xiaoyu pointed out that it is alsoCompelling the healthcare industry to shift its competitive logic from price-driven to innovation-driven., to achieve higher revenue and profits, thereby realizing a positive cycle.

Huang Junming also stated that the punitive measures of the IPI Act are not necessarily a bad thing.It will compel companies expanding into the EU market to further focus on their differentiation, truly develop innovative products of superior quality, and introduce them to the high-end international market, thereby earning genuine overseas trust in Chinese medical products and Chinese manufacturing.

Against this backdrop, the industry is also witnessing new changes.

As China’s high-end exports continue to capture overseas market share, Chinese companies have also begun establishing manufacturing facilities abroad. “If this model can be widely adopted, it will signify another upgrade of China’s industrial chain, gradually shifting toward ‘Chinese design, national manufacturing.’ In the future, Chinese enterprises will occupy the upstream end of the industrial chain,” pointed out Huang Junming. He noted that this aligns with the current national development strategy, which aims to drive industrial innovation by phasing out low-end production capacity.

In the short term, IPI’s punitive measures do indeed constitute unfair treatment; however, in the long run, they will help Chinese enterprises gradually transition toward a model of “R&D in China, design in China, and manufacturing for the world.”

The attending guests unanimously pointed out that,“Made in China” will become a thing of the past, while “Designed in China” will become the present reality.