Updated European Public Procurement Directive impacts healthcare sector

The latest version of the European Public Procurement Directive (EU PPD 2014/24) supports the EU’s “2020” growth strategy, which aims to ensure that the European economy is built on sustainable growth that fosters innovation and social inclusion over merely short-term cost-containment measures.

The new version of the regulation derives from Directive 2014/24/EU, and addresses:

  1. Outdated rules from the previous, 2004 version (2004/18/EC)
  2. Increasing demand for transparency in contract opportunities and awarding procedures
  3. Growing need to simplify, increase efficiency and provide better value for limited budgets
  4. Modernization to reflect current social policies

EU PPD impact on the healthcare sector:

  1. Increased visibility into the healthcare sector – Health is perceived as a value in itself and a precondition for economic prosperity. Population health directly influences economic outcomes in terms of productivity, labor supply, human capital and public spending.
  2. Need for integrated development – This means having an intentional approach for linking the design, delivery and evaluation of programs across disciplines and sectors to produce an amplified impact, with better-targeted, individualized and integrated services and benefits.
  3. Demand for improved resource use – Not only how much money is spent, but also how it is spent will determine a country’s health status. Present budget constraints should therefore be used as an opportunity to improve the value and effectiveness of healthcare spending.
  4. Need for health systems reforms – Health systems will be need to ensure their cost-effectiveness, sustainability and to assess their performance against the twin aims of providing access to high-quality healthcare and using public resources more efficiently.

What is the current “transposition” / implementation status of EU PPD 2014/24 within the member states?

The new directive has been published as of April 2014. While many have already transposed the directive, other member states of the EU and countries of the European Economic Area have yet to fully transpose the legislation into local regulations.

In May 2015, the European Commission sent reasoned opinions to these EU countries, requesting that they fully transpose the new directives on public procurement into national law. A final warning was sent in December 2016. According to the warning, these countries must notify the Commission of measures taken to bring their national legislation in line with EU law, or otherwise, in accordance with EU infringement rules, the Commission may refer them to the Court of Justice of the EU and propose financial sanctions.

Despite transposition status, the vast majority of countries follow the updates within the overhauled Public Procurement Directive, which includes the obligation for public contracting authorities to electronically publish any tenders above a certain monetary value on the TED portal to increase transparency. Companies who have not already done so should start considering the best way to incorporate this system with their tendering organization, processes, tools and data. While the TED portal has its shortcomings, it continues to mature. Life sciences companies can leverage the available data to more easily become aware of potential tender opportunities and begin building their tender and competitive intelligence.

Background: What is the European Public Procurement Directive?

The European Commission’s European Public Procurement Directive (EU PPD) sets the governing framework for tendering in the European Union. In the EU, tendering is the primary method for procurement of goods and services by authorities within the public sector. The EU PPD governs tendering across a variety of industries, including pharmaceutical supplies and medical equipment. This legislative framework obligates public authorities to publish their tender opportunities in the “Supplement of the Official Journal of the EU” (OJS) and on a public, electronic portal, called tenders electronic daily (TED).

To learn more about EU PPD impact on healthcare or tender management best practices in general, please contact Ruven Eul.

HighPoint Solutions conducted a benchmark study in June 2016 to capture a snapshot of the state of tendering in the industry. In the third report, HighPoint’s EU Pricing & Contracting team shares survey results related to the tender management solution across all phases of the tender lifecycle.