Medicine and vaccine procurement across Europe is increasingly recognised as a strategic function rather than a narrow price exercise. A new alliance launched in June 2024 brings together public procurement alliances, hospital procurement networks and industry partners to help reshape procurement practices for medicines and vaccines across Europe. Current models still rely heavily on lowest-price awards, with around 60% of medicines procurement in Europe awarded solely on that basis. Such approaches prioritise immediate savings but may weaken supply resilience and overlook wider goals linked to sustainability and strategic autonomy. Procurement decisions affect not only expenditure but also the reliability of medicine supply chains, the structure of pharmaceutical markets and the long-term stability of healthcare systems.
Procurement as a Strategic Lever for Health Systems
Public procurement represents a major component of healthcare spending across the European Union. Public authorities spend approximately €2 trillion each year on goods and services, and healthcare accounts for the largest share of that expenditure. Public payers finance roughly ¾ of health expenditure and about 2/3 of pharmaceutical spending. Procurement practices therefore influence the availability of medicines as well as the financial sustainability of health systems.
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Cost-containment strategies implemented over many years have encouraged procurement processes focused primarily on price. European procurement rules permit the inclusion of environmental and social considerations, yet their application in medicines procurement remains uneven across Member States. Sustainable procurement frameworks incorporate three dimensions: economic, environmental and social sustainability. Implementation frequently concentrates on environmental factors alone, while economic and social aspects receive less systematic attention.
Price continues to dominate tender evaluation. Evidence across European countries indicates that price-only awards remain widespread and often carry the highest weighting in tender assessments. Sustainable procurement of medicines therefore remains at an early stage of development, with limited examples of procurement systems applying all three sustainability dimensions together. At the same time, procurement policy is increasingly linked to broader European priorities including supply chain resilience, environmental responsibility and open strategic autonomy in pharmaceutical production.
Limits of Price-Driven Tendering
Competitive tendering is widely used in hospital procurement to manage pharmaceutical expenditure and promote market competition. However, tender structures commonly rely on lowest-price criteria combined with single-winner contracts. Winner-takes-all arrangements remain widespread across Europe.
Low-price competition can produce short-term savings but may also introduce structural vulnerabilities. Extremely low prices can reduce supplier participation and discourage manufacturers from entering or remaining in certain markets. Limited participation in some vaccine tenders has been linked to prices set below sustainable levels, creating difficulties in securing bids. When supply becomes constrained, purchasers may later need to accept higher prices to restore availability.
Single-winner tender structures can also increase exposure to supply disruption. When only one supplier holds a contract, production or distribution problems can quickly lead to shortages. Reduced supplier diversity may also weaken competition and create conditions that favour monopolistic behaviour. Medicine shortages place additional pressure on healthcare professionals, disrupt treatment pathways and may require substitution with higher-cost alternatives. A single awarded product may also fail to reflect the full range of patient needs.
European procurement rules permit broader evaluation models such as the Most Economically Advantageous Tender framework. This approach allows contracting authorities to combine price with quality and cost considerations. Criteria may include environmental characteristics, delivery conditions, technical performance and support services. Despite this flexibility, such approaches remain less common in medicines procurement due to fragmented implementation, limited transparency and knowledge gaps within procurement systems.
Emerging Approaches to More Resilient Procurement
Efforts to modernise medicines procurement are gaining momentum across Europe. The Alliance for Procurement Impact identifies four priorities: ensuring sustainable and reliable medicine supply, improving forecasting and resource efficiency, encouraging measurable criteria that recognise responsible manufacturing and clarifying procurement’s role in wider European policy objectives. The initiative follows a three-year structure moving from shared vision to engagement and implementation.
Early activities included the creation of governance structures, project teams and a series of interviews, surveys, workshops and studies examining procurement practices across Europe. These activities highlight growing recognition that procurement can function as a strategic instrument supporting sustainability, resilience and innovation. At the same time, persistent barriers remain, including reliance on price criteria, fragmented regulatory frameworks, limited transparency in supply chains and uneven procurement expertise.
Alternative procurement models illustrate possible pathways for reform. Multi-winner tenders, split contracts and shorter contract durations can reduce supply risks while maintaining competitive markets. Volume-sharing frameworks distribute contracts across multiple suppliers, supporting predictable access and encouraging market participation. Procurement strategies that consider the life cycle of medicines can also adapt tendering approaches to evolving supply conditions and market maturity.
Environmental considerations are gradually entering procurement processes. Some purchasing organisations now assign significant weighting to environmental criteria within tender evaluations. Wider adoption requires clear standards, reliable measurement methods and coordination between procurement authorities, healthcare providers and suppliers. Procurement strategies that combine sustainability, resilience and innovation depend on collaboration across the healthcare ecosystem.
European medicines procurement is undergoing gradual change. Long-standing practices centred on lowest-price competition and single-winner tenders increasingly reveal limitations related to supply security and sustainability. Procurement decisions influence supply chains, market participation and long-term system stability. Emerging procurement models demonstrate that broader evaluation criteria and diversified supplier arrangements can strengthen resilience while maintaining competition. Continued progress requires clearer standards, improved transparency and stronger cooperation among procurement authorities, healthcare organisations and industry participants. Procurement is increasingly recognised as a strategic mechanism capable of supporting reliable access to medicines while aligning healthcare systems with wider economic and sustainability objectives.
Source: Health Proc Europe
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