Daily Newsletter

16 April 2024

Daily Newsletter

16 April 2024

EU to reportedly start China probe over medical device procurement

The inquiry arrives against a backdrop of increasingly tenuous EU-China relations.

Robert Barrie April 15 2024

The European Union (EU) is set to launch an investigation into how China carries out medical device procurement, as reported by Bloomberg on 15 April.

The inquiry will reportedly seek to address concerns that policies in the country favour domestic suppliers.

Bloomberg stated the inquiry could be made public this week, with Chinese access to European tenders restricted as a result.

The probe comes amid increasing tension in EU-China relations. In October 2023, the EU launched an investigation into the import of battery electric vehicles into the Asian country after evidence it gathered on “unfair trade practices”. Some in China have already hit back at the investigation, with an industry body from the country saying it is biased.

As for the medical device space, China has faced previous criticism for discriminating against non-Chinese manufacturers.

In December 2023, the EU and China agreed that their trade relationship should be more balanced, but the resolution of many key issues in the trade policy space saw little change.

China is for a 2025 target of having an 85% market share for Chinese companies producing core medical device components. To achieve its so-called “Made In China” 2025 policy, the European Commission says China has “notably been utilising market-distorting measures and practices linked to localisation and technology transfer, as well as volume-based procurement (VBP), among others”.

The Chinese government launched its own anti-graft campaign last year that investigated corrupt doctors and senior hospital staff. The result was a near freeze in medical equipment intake from foreign manufacturers.

The market stalling affected medtech giants like Siemens Healthineers, who rely on China’s market for around 15% of its global revenue.

The company’s chief financial officer Jochen Schmitz, speaking at the Jefferies 2023 London Healthcare Conference in London, UK, last November, said that the government initiative “stalled purchasing behaviour in the industry” and was “black and white” in nature, citing pushback from the Chinese healthcare system.

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