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

How Europe Buys Generic Medicines Through Public Tendering

Every year, European governments spend over €2 trillion on public contracts. Roughly one in seven euros of the EU’s GDP goes toward buying things like roads, schools, and - critically - generic medicines. But how does a country like Germany or Spain pick which generic drug supplier gets the contract? It’s not about who offers the lowest price alone. It’s not about who has the biggest sales team. It’s about a tightly regulated, cross-border system called tendering.

In the pharmaceutical world, generic drugs make up over 80% of medicines dispensed in EU hospitals and pharmacies. But they’re not cheap because they’re easy to make. They’re cheap because the system forces suppliers to compete - fiercely - on price, quality, and reliability. And that system? It’s built on rules written in Brussels, enforced in national courts, and executed by public buyers who can’t just pick their favorite company.

The Five Ways Europe Tenders for Generic Drugs

There are five main ways public health authorities in Europe buy generic medicines. Each has its own strengths, costs, and risks. The most common? The Open procedure. This is the simplest: any company that meets the basic legal requirements can submit a bid. No pre-screening. No hidden lists. Just a public notice in the Official Journal of the European Union, and anyone with a valid license can respond.

But open tendering isn’t always practical. If a hospital needs 50 different generic drugs every quarter, managing hundreds of bids for each is a nightmare. That’s where the Restricted procedure comes in. Here, buyers first invite suppliers to apply for a shortlist. Only those who pass a qualification check - proving they meet quality standards, financial stability, and delivery capacity - get to submit a full bid. It cuts down the noise, but it also blocks new entrants. A small Polish generic maker might not have the resources to jump through 20 hoops just to get a chance to bid.

Then there’s the Competitive Negotiated procedure. This is used when the product is complex - think a new generic version of a biologic drug, or a medicine with tricky storage needs. The buyer talks to suppliers first, figures out what’s really needed, then invites a few to refine their offers. It’s flexible, but it’s also risky. If the buyer doesn’t document every conversation, someone can accuse them of favoritism. The European Court of Auditors found that 37% of these procedures in 2022 lacked proper paperwork.

For recurring purchases - say, insulin or metformin - many health systems use Framework Agreements. Think of it like a pre-approved supplier list. Once a hospital signs a framework with three generic makers, they can just pick from those three whenever they need more stock. No new tender. No new paperwork. But here’s the catch: if the framework is only with one supplier, you lose competition. Multi-supplier frameworks are better. They keep prices low and give buyers leverage.

And then there’s the Competitive Dialogue. This is for big, messy projects - like digital prescribing systems or nationwide drug tracking platforms. It’s not common for simple generics, but it’s growing. Suppliers and buyers talk back and forth until the requirements become clear. The Finnish Innovation Fund used this to cut smart grid costs by 32%. But in Spain, a €180 million rail signaling contract collapsed after 18 months because the specs were too vague. The lesson? Dialogue only works if you know what you’re talking about.

MEAT: Why Lowest Price Isn’t the Winner

For years, the default rule was: lowest bid wins. But that led to problems. Cheap generics sometimes meant poor quality, late deliveries, or suppliers who vanished after the contract started. So Europe changed the game.

Now, the standard is MEAT - Most Economically Advantageous Tender. It means you don’t just look at price. You look at quality, delivery reliability, environmental impact, and even after-sales support. For generics, that might mean:

• How well does the supplier maintain GMP (Good Manufacturing Practice) certification?
• What’s their track record for on-time delivery across Europe?
• Do they use sustainable packaging?
• Can they provide batch traceability?

A 2023 study by the European Public Procurement Observatory found that health authorities using MEAT saw 15.7% more innovation in their drug supply chains. That doesn’t mean fancy new pills. It means better packaging that reduces waste, digital tools that track stock levels in real time, or suppliers who help hospitals manage shortages.

Since 2022, EU rules require that at least 50% of the scoring in any tender over €1 million must go to non-price factors. That’s a big deal. It stops buyers from choosing a supplier who offers €0.01 less per tablet but can’t deliver on time.

Who Wins? Who Loses? The Real Impact on Businesses

For big generic manufacturers - like Teva, Mylan, or Sandoz - the EU tendering system is a well-oiled machine. They have teams of lawyers, compliance officers, and bid writers. They know how to read CPV codes (the EU’s classification system for procurement), fill out the European Single Procurement Document (ESPD), and submit bids in multiple languages.

But for small and medium-sized enterprises? It’s brutal. A 2023 Eurochambres survey found that small businesses spend 117 hours on average per tender submission. That’s nearly three full workweeks. One German supplier told the Procurement Leaders forum they had to submit 87 separate documents just to get on a framework with Deutsche Bahn. For a small pharmacy chain? That’s not a cost - it’s a dealbreaker.

And even if they win? It’s not always worth it. A French SME owner complained on LinkedIn that after spending six months qualifying for a €200,000 framework agreement, she only got two mini-tenders in 18 months. The effort cost her €15,000 in staff time. She lost money.

That’s why 41% of small EU businesses abandon tender opportunities. They can’t afford the risk. Meanwhile, large companies use these systems to lock out competition. They dominate framework agreements. They have the scale to absorb the administrative burden. And they often bid below cost just to get into the system - then raise prices later.

What’s Changing? Digital Tools, Green Rules, and AI

The EU is trying to fix the system. The European Single Procurement Document (ESPD) went live in 2023. It’s a digital form that replaces 30 different paper certificates. Suppliers answer a single set of questions, and the system auto-verifies their data with national registries. It cut administrative time by 40% in early adopters like the Netherlands and Denmark.

Green rules are also tightening. In 2023, 68% of high-value health tenders included sustainability criteria. That means packaging must be recyclable. Transport must be low-emission. Suppliers must prove they don’t use child labor in their supply chains. By 2028, 75% of big drug tenders will require circular economy standards.

And now, AI is stepping in. Pilot programs in France and Finland are using machine learning to score bids. The systems check for consistency, flag duplicate submissions, and even spot if a bid looks too low to be realistic. One pilot cut evaluation time by 30% and maintained 99.2% accuracy. That’s not replacing humans - it’s making them faster and fairer.

By 2027, the EU wants 95% of all public tenders to be electronic. That’s up from 76% in 2022. Digital systems mean less corruption, less paperwork, and more transparency. But only if all member states play by the same rules.

The Big Gap: Northern vs. Southern Europe

Here’s the uncomfortable truth: the EU’s tendering system works better in some countries than others. Nordic nations like Finland and Denmark have 92% electronic tendering. Their portals are clean, clear, and easy to use. Suppliers get real-time updates. Bids are scored objectively.

In Southern and Eastern Europe? Only 43% of tenders are electronic. Some portals are still in PDF. Some require faxed documents. Some don’t even publish the evaluation criteria until after the deadline. That’s not just inefficient - it’s discriminatory. It blocks foreign suppliers. It favors local companies with connections.

The European Court of Auditors warned in 2023 that this fragmentation threatens the entire single market. If a Spanish hospital can’t understand a bid from a Romanian supplier because the documents are in the wrong format, then the system fails.

What Happens When the System Breaks?

It breaks often. In 2022, the European Court of Justice issued 147 rulings on procurement disputes. Most were about:

• Unfair selection criteria (e.g., requiring €10 million in annual sales for a €500,000 contract)
• Hidden preferences for local suppliers
• Failure to document why MEAT was used instead of lowest price

One case in Italy involved a tender for generic antibiotics. The buyer scored bids based on “brand reputation” - even though the drugs were identical. The court ruled it illegal. The buyer had to restart the tender. It cost taxpayers €220,000 in delays and legal fees.

That’s the cost of poor implementation. It’s not just money. It’s patients waiting for medicine. It’s hospitals running out of stock. It’s trust broken.

How to Win a European Generic Tender

If you’re a supplier trying to break into the EU market, here’s what actually works:

1. Start with TED - the Tenders Electronic Daily portal. Set up email alerts for CPV code 22431000-7 (pharmaceutical products).
2. Use the ESPD. It’s free. It’s digital. It’s the only form you need for most bids.
3. Don’t just bid on price. Highlight delivery reliability, packaging sustainability, and technical support.
4. Join a multi-supplier framework. Even if you don’t win a mini-tender right away, you’re in the system.
5. Learn the rules. The proportionality principle is your friend. If a buyer asks for 10 years of financial statements for a €100,000 contract, challenge it. It’s against EU law.

Successful bidders don’t just send documents. They build relationships. They attend pre-tender consultations. They ask questions. They show they understand the buyer’s pain points - like stockouts, expired inventory, or supply chain delays.

The system isn’t perfect. But it’s the best we have. And for patients across Europe, it’s the only thing keeping generic medicines affordable, safe, and available.