Ministry of Finance issued a letter! Strictly investigate the “abnormally low price” of medical devices

The Finance Department has issued an order,
concerning the equipment procurement of public hospitals nationwide.

To further address the issue of abnormally low prices in government procurement, recently, the official website of the Ministry of Finance of the People’s Republic of China released a letter seeking opinions on the “Notice on Promoting the Resolution of Abnormally Low Prices in Government Procurement (Draft for Comments)” (hereinafter referred to as the “Draft for Comments”).

The so-called “abnormally low price” issue refers to the situation where a supplier wins a bid at a price far lower than that of its peers and even lower than the product cost. Especially in the field of public hospital procurement, in recent years, hospitals in many parts of the country have frequently seen extreme cases such as “winning bids at extremely low prices of 1 yuan or 0.1 yuan for an entire production line”, which has seriously disrupted the ecological environment of the industry.

Previously, People’s Daily has discussed the hazards of “winning bids at low prices” multiple times in several popular articles. This not only disrupts the fairness and impartiality of government procurement but also encourages the use of shoddy products to pass off as good ones, creating a situation where bad money drives out good money and causing far-reaching negative impacts on the entire industry.

Based on this, the Ministry of Finance took the lead in launching a pilot project for special rectification of abnormally low-price issues in six provinces and cities, namely Beijing, Tianjin, Shanghai, Fujian, Guangdong, and Hainan, at the beginning of this year. In June, Jiangsu and other regions successively issued implementation rules.

Nowadays, the Ministry of Finance of the country directly collects opinions extensively from the whole society, and the significance and importance of this are self-evident. Public hospitals occupy a key position in the government procurement system, and there is no doubt that the bidding and tendering process for their consumables and medical devices will also usher in a new round of rectification actions.

Ultra-low price winning bids for medical equipment,
really have to say goodbye!

Looking at the entire text of the “Draft Opinions”, it not only strictly regulates the procurement of projects by purchasers but also sets red lines for the bidding behaviors of suppliers and the management of bid evaluation experts.

The “Draft Opinions” clearly states that purchasers shall, based on and in light of actual circumstances, comprehensively consider the winning bid information of similar projects and market conditions, reasonably set the maximum price limit, and provide a basis for suppliers’ quotations.

In addition, in government procurement evaluation projects, if any of the following 4 situations occur, an investigation will be launched immediately:

In government procurement evaluation, if any of the following circumstances occur, the evaluation committee shall initiate the review procedure for abnormally low-price bids (responses):
(1) If the bid (response) price is lower than 50% of the average bid (response) price of all suppliers that have passed the compliance review, that is, bid (response) price < average bid (response) price of all suppliers that have passed the compliance review × 50%;
(2) If the bid (response) price is lower than 50% of the bid (response) price of the supplier that has passed the compliance review and has the second lowest price, that is, bid (response) price < bid (response) price of the supplier that has passed the compliance review and has the second lowest price × 50%;
(3) If the bid (response) price is lower than 45% of the maximum price limit of the procurement project, that is, bid (response) price < maximum price limit of the procurement project × 45%;
(4) Other circumstances where the review committee deems that the supplier’s quotation is too low, which may affect product quality or result in failure to perform the contract in good faith.
Simply put, as long as the quoted price is 50% lower than that of peers or 45% lower than the maximum price limit of the project, the review committee will initiate a review of abnormally low bids.

Once the review is initiated, the supplier must explain the bid price within a reasonable time at the review site. If they cannot prove the reasonableness of their quotation, the bid will be treated as invalid.

Moreover, the “Draft Opinions” clearly states that if abnormal low-price situations occur and are not handled in accordance with regulations, the legal responsibilities of the evaluation experts will be directly pursued, further strengthening the responsibilities of the evaluation experts.

It is worth mentioning that the pilot work at the beginning of the year took only more than 60 days from the issuance of the notice to its implementation. Therefore, this “Draft Opinions” is expected to be implemented in the first half of 2026, which deserves the key attention of all medical device professionals.
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Source：Medical Device Distributors Alliance

Translated & edited：Bradyknown