On July 6, 2025, a new regulation on medical device procurement issued by the Ministry of Finance (MOF) officially came into effect, stirring the medical device industry. With strong targeting, the regulation standardizes government procurement of medical devices from multiple dimensions and exerts a profound impact on the industry's development.

I. Core Provisions of the New Regulation: Scope, Restrictions & Exceptions

1. Scope of Application and Procurement Thresholds

The new regulation clarifies its scope of application and thresholds, covering only medical device projects with a government procurement budget of ≥ 45 million RMB (including single-equipment or combined procurement). Notably, this policy does not apply to the centralized procurement of drugs, medical consumables, or procurement by state-owned enterprises.

2. Entity and Product Restriction Rules

Regarding restricted entities, enterprises with headquarters in the European Union (EU)—such as Siemens Healthineers and Philips—are directly excluded from bidding eligibility, regardless of their products’ country of origin. For non-EU enterprises participating in bids, the proportion of EU-origin medical devices they supply must be ≤ 50% (based on the country of origin stated in customs declarations). However, localized products (bearing the "National Medical Device Approval" label) of EU-funded enterprises in China—including Johnson & Johnson China and Siemens Shanghai—are not restricted. Restricted product categories cover eight major types, including medical magnetic resonance equipment, surgical navigation systems, and laser treatment equipment, subdivided in accordance with the "Classification Catalogue of Government Procurement Items".

3. Exception Clauses and Transitional Arrangements

The new regulation also outlines exception clauses and transitional arrangements. If clinical needs can only be met by EU products (e.g., equipment for specific rare diseases), restrictions may be waived after expert demonstration—provided technical evaluation materials are submitted. Such cases are strictly limited to 3% of the total procurement volume. For projects already tendered, those with winning bid announcements issued before July 6, 2025, may continue implementing the original contracts. When large-scale projects are split into sections, each sub-package must independently meet the 50% EU import proportion limit.

II. Policy Background: Reciprocal Response and Development Goals

1. Reciprocal Response to EU’s Relevant Restrictions

From a policy background perspective, this regulation is a reciprocal response to relevant EU restrictions. In June 2025, the EU introduced measures restricting Chinese medical devices from participating in its public procurement, such as stricter Medical Device Regulation (MDR) requirements and localization priority policies. China’s move aims to counter EU protectionism and promote fair trade.

2. Accelerating Domestic Substitution and Securing Supply Chains

Meanwhile, the new regulation focuses on accelerating domestic substitution and ensuring supply chain security. Its goal is to increase the localization rate of high-end equipment (e.g., CT/MRI) from the current 30% to 45% by 2026, while encouraging multinational enterprises to establish R&D centers and production lines in China.

III. Market Impact: Opportunities and Challenges for Stakeholders

1. Domestic Enterprises: Embracing Policy Dividends and Technological Breakthrough Pressures

Domestic enterprises are facing significant opportunities. Companies like United Imaging Healthcare and Mindray Medical will gain more distinct advantages in bidding for projects above 45 million RMB. This will also push domestic enterprises to accelerate breakthroughs in core component technologies, such as medical sensors and high-precision optical modules.

2. Multinational Enterprises: Adjusting Layout to Adapt to the New Regulation

Multinational enterprises need to adjust their strategies. EU-based enterprises should avoid restrictions by leveraging production bases in China or cooperating with non-EU suppliers, while accelerating the domestic substitution of key components.

3. Procurers: Confronting Compliance and Supply Chain Diversification Challenges

Procurers also face compliance challenges. Hospitals need to organize expert teams to demonstrate that "only EU products can meet clinical needs", increasing demonstration costs. Additionally, they must expand supply channels to include Japanese, South Korean, U.S., and domestic suppliers to reduce reliance on a single source.

IV. Conclusion: Industry Pattern Reshaping and Adaptation Suggestions

The MOF’s new medical device procurement regulation reshapes the medical device government procurement market pattern from multiple dimensions. All stakeholders need to actively adapt and seize new development opportunities.

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