Tendering Systems in Europe: How Generic Drug Purchases Are Won and Lost

How Europe Buys Generic Drugs - and Why It’s Not What You Think

Every year, European governments spend over €2 trillion on public contracts. Roughly one in seven euros of that goes to healthcare - and most of it buys generic drugs. But here’s the twist: it’s not the lowest bidder who always wins. In fact, the cheapest option often loses. That’s because Europe doesn’t just buy drugs - it buys value.

Generic medicines are the backbone of affordable healthcare across the EU. They’re chemically identical to branded drugs but cost 80% less. Yet getting them into hospitals and pharmacies isn’t as simple as picking the lowest price. Instead, governments use a complex, tightly regulated system called tendering. It’s designed to be fair, transparent, and smart. And if you’re a manufacturer trying to sell generics in Europe, understanding how it works isn’t optional - it’s survival.

The Rules of the Game: What Makes Europe’s System Different

Unlike many countries where drug purchases are handled quietly behind closed doors, Europe’s system is built on openness. Since 1977, EU law has required all public tenders above certain value thresholds to be published in the Official Journal of the European Union. Today, that’s done through Tenders Electronic Daily (TED), the central platform where every public contract notice is posted. Anyone, anywhere in the EU, can see what’s being bought, who’s bidding, and how the winner was chosen.

The core principles are simple: no discrimination, no hidden rules, and everything must be proportional. That means a small Belgian pharmacy can’t be forced to prove it has €10 million in annual revenue just to bid on a €500,000 drug order. The requirement must match the scale of the contract. This rule alone shuts out many large, non-EU firms that can’t meet arbitrary financial thresholds - and levels the playing field for smaller European manufacturers.

But the real game-changer? The evaluation method. Most countries pick the lowest price. Europe doesn’t. It uses something called MEAT - Most Economically Advantageous Tender. That means price is just one factor. Quality, reliability, delivery speed, sustainability, and even innovation matter too. In 2022, the EU updated its rules to require that at least 50% of the scoring in any tender over €1 million must go to non-price factors. That’s not a suggestion - it’s the law.

How the Bidding Process Actually Works

There are five main ways European buyers run their generic drug tenders. Each has its own pros and cons - and knowing which one you’re up against changes your strategy.

• Open Procedure: Any supplier can submit a bid. It’s the most transparent, but also the most time-consuming. About 45% of EU tenders use this. Good for big players with lots of resources.
• Restricted Procedure: Suppliers first apply to be pre-qualified. Only those who pass get to submit a full bid. This cuts down the number of bids from hundreds to maybe 10-20. About 35% of tenders use this. It’s faster, but harder for new entrants to break in.
• Competitive Dialogue: Used for complex purchases where the buyer doesn’t yet know exactly what they need. Suppliers talk with the buyer, suggest improvements, and then bid. Common in high-tech medical devices - less so for generics, but growing.
• Framework Agreements: The buyer picks a shortlist of suppliers (often 3-5) who can supply over a set period, say 3-5 years. Then, when a hospital needs drugs, it runs a mini-bid among those pre-approved suppliers. This is huge in generics. Think of it like a wholesale club where you’re already on the membership list.
• Dynamic Purchasing Systems: An electronic system where suppliers can join at any time. New bidders can enter even after the system is live. Great for fast-changing markets like generics.

Most generic drug contracts in Europe are won through framework agreements. Why? Because hospitals don’t want to re-bid every six months. They want predictability. So if you can get on the list, you’ve got a steady stream of orders - even if each one is small.

Winning Isn’t Just About Price - Here’s What Really Matters

Let’s say you’re a generic drug maker from Poland trying to win a tender in Germany. Your price is 10% lower than the next bidder. That should win, right? Not always.

Here’s what actually gets scored:

• Price (max 50%): Still important, but only half the story.
• Quality and Compliance (15-20%): Do you have GMP certification? Has your facility passed EU inspections? Are your batch records clean?
• Delivery Reliability (10-15%): Can you deliver on time, every time? Late shipments mean hospital stockouts - and that’s a big no-no.
• Sustainability (5-10%): Is your packaging recyclable? Do you use renewable energy in production? Are you reducing carbon emissions? In 2023, 68% of high-value tenders included sustainability criteria.
• Technical Support (5-10%): Do you offer training for pharmacists? Do you provide clear labeling in local languages? Do you have a local contact for urgent issues?

One Finnish supplier won a €3 million tender in 2022 not because they were cheapest - they were third. But they offered a digital dashboard that showed real-time inventory levels to hospitals. That cut waste by 18%. That’s innovation. That’s value.

The Hidden Costs - And Why Small Companies Struggle

Getting into the system isn’t cheap. A 2023 survey by Eurochambres found small businesses spend an average of 117 hours per tender. That’s nearly three full work weeks. For a company with five employees, that’s time taken away from production.

Then there’s the paperwork. You need:

• European Single Procurement Document (ESPD) - a standardized form now used across 27 countries.
• Proof of financial standing.
• Quality certificates (GMP, ISO).
• Environmental impact reports.
• Local language translations for all documentation.

And if you misclassify your product using the wrong CPV code? Your bid gets rejected. In 2022, 23% of rejected bids were due to this error.

Even when you win, it’s not guaranteed income. A French SME won a €200,000 framework agreement in 2022. They spent six months preparing. Then, over the next 18 months, they got just two mini-tenders - worth €12,000 total. The cost of qualifying? €45,000. That’s a loss.

That’s why many small manufacturers now team up. Two or three companies share the bidding cost, pool their documentation, and bid as a consortium. It’s becoming common - and smart.

What’s Changing - And What’s Coming

Europe’s tendering system is evolving fast. Here’s what’s new:

• AI is helping evaluate bids: Pilot programs in France and Finland use AI to check compliance and scoring consistency. Results? 30% faster decisions with 99.2% accuracy.
• Electronic bidding is now the norm: 76% of tenders are fully digital in 2023 - up from 39% in 2016. By 2027, it’ll be 95%.
• Sustainability is mandatory: By 2025, 85% of high-value tenders will include environmental criteria. By 2028, circular economy rules (like reusable packaging) will be expected in 75% of cases.
• More focus on SMEs: The EU is pushing for at least 20% of tender value to go to small businesses by 2030. New tools are being rolled out to simplify bidding for them.

The biggest shift? The move from buying drugs to buying health outcomes. Buyers aren’t just looking for pills - they’re looking for systems that reduce waste, prevent shortages, and support digital health integration. The companies that adapt will thrive. The ones that don’t will be left behind.

What You Need to Do Now

If you’re a generic drug supplier aiming for Europe:

1. Register on TED and set up email alerts for your product codes.
2. Get your ESPD ready - it’s your passport to every tender.
3. Don’t just compete on price. Build a value story: reliability, sustainability, support.
4. Target framework agreements - they’re the real goldmine.
5. Join forces with other small suppliers if you can’t handle the cost alone.
6. Learn the CPV codes. Get them wrong, and you’re out before you start.

Europe’s system isn’t easy. But it’s fair. It rewards those who plan ahead, document well, and understand that value isn’t just a number on a spreadsheet. It’s trust. It’s consistency. It’s knowing that when a hospital runs out of a drug, you’re the one who shows up - on time, every time.