China Signals Shift Away From Price-Centric Criteria in Centralized Medical Device Procurement

At a State Council Information Office press briefing held on July 24, 2025, Chinese authorities outlined updated policy signals affecting centralized medical device procurement and reimbursement reform. The briefing formed part of the “high-quality completion of the 14th Five-Year Plan” series and provided insight into how procurement and payment mechanisms are expected to evolve as China prepares for the next planning cycle.

During the session, the National Healthcare Security Administration (NHSA) reviewed progress achieved during the 14th Five-Year period and described policy priorities shaping centralized procurement, medical insurance payment reform, and medical service pricing adjustments.

NHSA Outlines Expanded Evaluation Logic for Centralized Procurement

In discussing the advancement of centralized procurement, NHSA officials emphasized that recently launched procurement programs are being guided by a clearer set of policy principles. These principles were presented in connection with the ongoing 11th round of centralized procurement.

The authority confirmed four core principles guiding current implementation:

Ensuring clinical stability
Safeguarding quality
Preventing collusive bidding
Curbing excessive competition

Officials stated that procurement mechanisms should place greater weight on clinical use considerations, allowing higher-quality products to stand out. This clarification signals a departure from award decisions driven by the lowest price and reflects a policy intent to balance cost control with clinical reliability and procurement order.

From the perspective of overseas manufacturers, this shift reduces the dominance of price-only competition and creates greater scope to compete on product performance, reliability, and service capability.

Recent Tenders Reflect Expanded Evaluation Criteria

Procurement outcomes earlier in 2025 suggest that this shift was already taking shape. In one case, the Zhejiang Provincial Health Commission awarded approximately 80% of the contract value for mobile C-arm X-ray systems to Siemens, despite higher unit pricing of around RMB 1.7 million (≈USD 241,000) per system.

Industry commentary indicated that original-manufacturer warranties and service commitments were key factors in the award, suggesting that clinical reliability and lifecycle support outweighed price considerations during evaluation.

Payment and Pricing Reforms Aim to Accelerate Adoption of Higher-Value Technologies

Procurement reform was presented alongside broader adjustments to medical insurance payment and service pricing systems, reinforcing the same policy direction. NHSA officials described these reforms as complementary measures intended to support the clinical adoption of higher-value medical technologies.

Medical Insurance Payment Reform Moves Beyond Cost Control

The NHSA stated that payment reform is no longer positioned solely as a cost-control measure. It is also an accelerator for the inclusion of clinically valuable technologies into the scope of medical insurance payment, helping innovations reach clinical use earlier.

Medical Service Pricing Reform Expands Reimbursable Technologies

At the same time, project approval guidelines issued by the National Healthcare Security Administration have added more than 100 pricing items focused on advanced technologies and urgent clinical needs. Multiple provinces and municipalities have already begun implementing these new pricing items.

Together, these payment and pricing adjustments expand reimbursable services and align reimbursement mechanisms more closely with current clinical practice, creating clearer conditions for hospitals to adopt higher-value medical technologies.

Implications for Overseas Manufacturers

For overseas manufacturers, competitive advantage increasingly depends on moving beyond one-time equipment sales toward integrated, lifecycle-based offerings. As procurement places greater emphasis on clinical value and service capability, reliance on hardware pricing alone increases exposure to margin pressure.

Manufacturers that combine original manufacturer servicing, clinical training, system upgrades, and data-enabled support are better positioned to influence evaluation outcomes and clinician acceptance by reducing operational and clinical risk for hospitals.

In this context, companies should consider:

Prioritizing innovative products and services aligned with current policy direction and supported by clinical evidence or real-world data
Strengthening lifecycle accountability, including warranties, service responsiveness, and defined upgrade pathways
Aligning China strategies with policy cycles, recognizing that procurement rules often evolve alongside national planning periods

Key Takeaways for International Companies

Recent policy clarification, together with observable procurement outcomes, points to a clearer direction for China’s centralized procurement framework. While pricing pressure remains, clinical use considerations, product reliability, and service support are playing a more visible role in procurement and reimbursement decisions.

For overseas manufacturers, this does not eliminate pricing pressure, but it does reduce the risk of competing solely on cost. Companies that can demonstrate sustained clinical value and support products effectively within China’s healthcare system are better positioned under the evolving framework.

As China’s procurement framework evolves, early alignment matters. To discuss how these developments may affect your China strategy, contact Cisema for tailored guidance. With more than 20 years of experience supporting international companies in China, our specialists provide practical insight for compliant market entry and long-term positioning.