Tendering Systems in Europe: How Generic Purchasing Works Across the EU

When European hospitals buy generic medicines, they don’t just pick the cheapest option off a shelf. They go through a formal, tightly regulated process called tendering. This isn’t just bureaucracy-it’s a system designed to save money, ensure quality, and keep the market fair for suppliers across 27 countries. For pharmacies, manufacturers, and public health systems, understanding how this works isn’t optional. It’s how billions in public funds are spent every year.

How European Tendering Works in Practice

Every public contract above €25,000 in the EU must follow rules laid out in Directive 2014/25/EU. That means when a regional health authority needs to buy 10 million tablets of generic metformin, they can’t just call their usual supplier. They must advertise the need publicly, usually on Tenders Electronic Daily (TED), the EU’s central tender portal. Any company in the EU can respond-even a small firm in Portugal or a startup in Estonia.

The most common method is the Open procedure. It’s simple: anyone can submit a bid. About 45% of all EU public tenders use this route. It’s great for competition, but it also means authorities get hundreds of bids to sort through. For generic drugs, where the product is identical across brands, this often comes down to price. But not always.

That’s where MEAT-Most Economically Advantageous Tender-comes in. Instead of just picking the lowest price, authorities score bids on a mix of factors: price, delivery reliability, packaging safety, environmental impact, and even supplier track record. A 2023 study found that health authorities using MEAT saw 15.7% more innovation in their purchases, like blister packs with child-safe caps or carbon-neutral logistics. For generics, that might mean choosing a supplier who guarantees stock for 12 months over one who offers 5% less but might run out in six.

The Four Main Tendering Procedures

Not all purchases are the same. The EU gives authorities four main ways to run a tender, each suited to different needs.

• Open procedure: Everyone can bid. Best for simple, high-volume purchases like common generics. High competition, high paperwork.
• Restricted procedure: Suppliers must first apply to be invited. Only pre-qualified bidders submit final offers. Used when authorities want to reduce volume but still keep it fair. About 35% of tenders use this.
• Competitive Negotiated procedure: Used when the product is complex or there’s only one supplier with the right tech. Rare for generics, but common for specialty drugs or digital health systems.
• Competitive Dialogue: For projects where the authority doesn’t yet know exactly what they need. Suppliers help design the solution. Used in digital health projects, not typically for off-patent pills.

For generic medicines, Open and Restricted procedures dominate. Why? Because the product is standardized. The active ingredient is the same. The difference is in packaging, delivery times, and price.

Framework Agreements: The Hidden Backbone of Generic Supply

Most public health systems don’t buy generics one-off. They set up Framework Agreements. Think of it like a pre-approved list of suppliers. Once a hospital signs up with a framework, they can order from any of the approved vendors without running a new tender each time.

There are two types: single-supplier and multi-supplier. Multi-supplier is far more common-and smarter. In a multi-supplier framework, say with five approved generic metformin suppliers, the hospital runs mini-competitions every time they need a refill. That keeps prices low and prevents lock-in.

But it’s not perfect. A 2023 survey of 1,200 EU suppliers found that while 60% of companies that won a framework agreement saw their bidding costs drop by 60%, 38% said they got so few actual orders that the initial effort wasn’t worth it. One French SME spent 8 months preparing documents to join a national framework-then got only two orders in 18 months. That’s a risk small suppliers take.

Why Some Tenders Fail-and How to Avoid It

Not every tender works. The European Court of Auditors found that 37% of Competitive Dialogue tenders in 2022 had poor documentation. In Spain, a €180 million rail signaling contract was canceled after 18 months because the technical specs were too vague. The same happens in health.

One major reason? Ambiguous requirements. A 2022 analysis showed that 68% of supplier complaints in cross-border tenders came from unclear product specs. For generics, that might mean a tender asking for “high-quality packaging” without defining what that means. Is it child-safe? Tamper-proof? Recyclable? Without clear criteria, suppliers guess-and end up bidding wrong.

Successful authorities fix this by doing pre-tender market consultations. They talk to suppliers before publishing the tender. Ask: What’s realistic? What packaging do you use? Can you deliver 500,000 units by March? This reduces complaints by 34% and cuts procurement time by 22%.

The Digital Shift: How Tech Is Changing the Game

Europe is moving fast toward fully electronic procurement. In 2022, 76% of all public tenders were done online-up from 39% in 2016. The European Single Procurement Document (ESPD) replaced stacks of paper with a simple online form. Now, suppliers can self-declare their financial health, tax compliance, and past performance. No need to send certified bank letters or notarized copies.

That’s a game-changer for small businesses. Before, a Polish generic drug maker might spend €5,000 just on paperwork to bid on a German hospital contract. Now, it’s under €200-and most of that is time, not money.

By 2027, the EU aims for 95% of tenders to be electronic. Some countries are ahead: Nordic nations hit 92% e-tendering. Others lag-Southern Europe is still around 43%. But the trend is clear: paper is dying.

Proportionality: The EU’s Secret Weapon

One thing that makes the EU system unique is the proportionality principle. Authorities can’t demand ridiculous things just to scare off small suppliers. For example: if you’re buying €500,000 worth of generic insulin, you can’t require a supplier to have €10 million in annual revenue. That’s illegal.

This rule levels the playing field. It’s why a small Czech lab can win a contract in Sweden. It’s why generics from Eastern Europe are now common in Western hospitals. Without proportionality, big players would dominate by default.

But enforcement is uneven. The European Court of Auditors warned in 2023 that 30% of member states still slip-adding hidden requirements that favor local firms. That’s why cross-border bidding remains low: only 7.3% of total tender value comes from suppliers outside the buyer’s country. Northern states like Denmark and Finland have 14% cross-border activity. Southern states? Just 3.8%.

What’s Next? Sustainability, AI, and Strategic Autonomy

By 2025, 85% of high-value EU tenders will include sustainability criteria. That means for generics, suppliers will be scored not just on price, but on:

• Carbon footprint of manufacturing
• Use of recyclable or biodegradable packaging
• Energy efficiency of logistics

Some countries are already ahead. The Netherlands now requires all public health tenders to include a circular economy score. Germany’s public hospitals are testing biodegradable blister packs.

And AI is coming. Pilot programs in France and Finland use algorithms to score bids automatically. They check for price consistency, delivery timelines, and past performance. Results? 30% faster evaluations-with 99.2% accuracy compared to human reviewers.

But the biggest shift might be geopolitical. With supply chain risks from Asia and drug shortages during crises, the EU is now talking about “strategic autonomy.” That means favoring suppliers within the EU or allied countries for critical medicines. It’s not protectionism-it’s resilience. And it’s already creeping into tender rules.

What Suppliers Need to Know

If you’re a generic drug maker or distributor trying to win EU contracts, here’s what actually works:

1. Register on TED and set up email alerts for your product codes (CPV codes). Misclassifying your product gets your bid rejected-23% of rejections in 2022 were due to this.
2. Study the MEAT criteria. Don’t just undercut on price. Highlight reliability, packaging innovation, and delivery speed.
3. Join a multi-supplier framework. It’s the best long-term bet-even if it takes months to qualify.
4. Use the ESPD. It’s free, online, and accepted across the EU.
5. Don’t ignore pre-tender consultations. If the authority invites suppliers to a meeting, go. It’s your chance to shape the tender.

Companies with certified procurement professionals (CPP) report 28% higher win rates. It’s not magic-it’s knowing the rules inside out.

Final Reality Check

The EU tendering system isn’t perfect. It’s slow. It’s complex. It can be frustrating for small businesses. But it’s also the most transparent, fair, and effective public buying system in the world. It’s why Europe can buy generic drugs at 60% lower prices than the U.S. It’s why patients get the same medicine, regardless of whether they live in Rome or Riga.

For suppliers, it’s a challenge. For public health systems, it’s a lifeline. And for patients? It’s the quiet engine behind affordable, reliable medicine.