Competitive Bidding

This position paper of the Global Medical Technology Network is an internal statement of principles intended to offer participating associations a guideline for consistent non-binding, voluntary application at a national or regional level. As circumstances differ in each market, national associations should choose whether to use the GMTN principles as an appropriate reflection of local conditions. GMTN position papers only apply to the countries in which the subject policies, systems, or practices are in place.

Competitive Tendering for Medical Technologies

Healthcare systems in several countries have implemented competitive tendering for the procurement of medical technologies. Approaches to tendering for healthcare products vary substantially in their consideration of critical differences in product quality and clinical effects. They also vary in the degree to which they shape the marketplace. In some countries competitive tendering can reduce the treatment options available to patients in areas where innovation is critical.

In all cases, competitive tendering should support and recognize the value of innovation in medical technologies to patients, clinicians and healthcare systems, and should reward features that bring new capabilities and options to the clinical pathway.

Critical Features of Competitive Tendering for Medical Technologies

• All public tendering should be conducted with transparent rules and open processes in which diverse products and services can compete on a level playing field, and without prejudice to national origin. Tendering should be conducted in accordance with all applicable international trade agreements, including those of the World Trade Organization.

• Centralized, national tendering processes are rarely appropriate for medical technology products, as they cannot adequately address the diversity of products and services available in the marketplace. Centralized tendering can severely limit therapeutic and diagnostic options across an entire healthcare system and may discourage innovation in standards of care.

• Cost-based tendering methods used for non-medical, commodity products should generally not be applied to medical technologies, as these methods typically fail to take into account the need for clinician input, unique technical features, product performance parameters, service and support requirements and training requirements related to many advanced medical technologies.

• Safeguards must be in place to ensure that competitive tendering does not interfere with the availability of quality healthcare or patient access to life-saving or life-enhancing therapies and diagnostics.

• Public tendering processes should not be implemented in a way that artificially controls the number of competing firms that can exist in the healthcare marketplace. This principle should be reflected in limits to the size and duration of tender contracts, so as not to create or perpetuate market monopolies.

• Where competitive tendering is used, a maximum threshold should be established to limit the proportion of purchasing that could be bundled under a tendering process.

• Multiple source contracts are generally preferable so that a diverse range of products and services is available for clinical use. Multiple awards should be made where qualitative differences are relevant or where there are no significant differences in price.

• Public administrative entities that conduct tendering and other purchases should be free to make autonomous product purchasing decisions in response to local needs.

• Tendering processes of all types should take into account and adequately reward differences in product quality, innovative features, and clinical value to patients. Where cost is considered, it should include an understanding of lifetime patient costs and value to the healthcare system. Some tendering methods, such as internet-based "reverse auctions" are typically unable to address these differences and hence should not be applied to advanced medical technologies.

• To ensure the appropriate conduct of tendering operations, independent committees that include clinicians and non-competing medical device experts can offer useful insight into quality-focused purchasing.

• All public tendering must be done in accordance with applicable laws. National laws should not discourage innovation, distort competition or otherwise negatively affect the quality of care.

• A mechanism for appeal of tendering decisions should be made public and accessible to all competing medical technology firms.

• Tendering programs should be monitored and evaluated on an ongoing basis to ensure that these principles are positively supported.