China Introduces Reforms to Support Value-Based Purchasing for Medical Equipment & High-Value Devices

On July 14, 2026, China’s National Health Commission — alongside the National Administration of Traditional Chinese Medicine and the National Center for Disease Control and Prevention — issued a landmark directive: the "Notice on Improving the Centralized Procurement of Medical Equipment in Public Medical and Health Institutions."

This sweeping regulation establishes a formalized three-tier procurement framework, shifting public hospital purchasing away from low-price wars and toward value-based assessments, life-cycle costs, and strict anti-low-bid protections. For international medical device manufacturers, it is a powerful positive signal that prioritizes clinical innovation, quality, and transparent pricing.

Three-Tier Procurement Structure and Implementation Timelines

To eliminate fragmented buying and boost transparency, the framework divides purchasing responsibilities into distinct administrative levels for public medical institutions utilizing budget-managed funds:

• National Level: Manages Class A large-scale medical equipment, such as high-end radiotherapy systems. Highly customized infrastructure-dependent equipment, like heavy ion proton radiotherapy systems, remains excluded for now.
• Provincial Level: Oversees Class B large-scale equipment (including PET/MR, PET/CT, laparoscopic surgical systems, and conventional radiotherapy equipment) alongside other high-value devices with limited market competition.
• Prefecture Level: Drafts local centralized procurement catalogs to drive regional compliance for devices not covered at higher levels.

Strict Deadlines for Provincial and Prefecture Rollout

The framework enforces clear deadlines to accelerate adoption:

Tip for manufacturers: Align commercial distribution schedules with institutional procurement windows immediately, as regional health bureaus may accelerate timelines based on clinical demand.

Key Strategic Mechanisms

Moving beyond simple cost-cutting, the policy implements sophisticated mechanisms to protect quality and establish nationwide price visibility.

Value-Based Pricing and Life-Cycle Assessment

The framework mandates value-based pricing, prioritizing technical quality, clinical utility, and comprehensive after-sales service alongside device costs.

Hospitals must adopt a lifecycle cost management concept that accounts for:

• One-time acquisition expenses, including quality and initial purchase price
• Long-term operating costs, such as consumables and reagents
• Maintenance and after-sales service provisions

This plays directly to the strengths of international brands. Foreign manufacturers with superior engineering and robust clinical evidence can compete on product value and total cost of ownership rather than competing on price against low-cost domestic alternatives.

Oversight of Abnormally Low Bids and National Price Visibility

Authorities have introduced mandatory reviews for abnormally low bids — enforcement already seen in provinces like Fujian, where undercutting valid thresholds leads to immediate tender cancellation.

Concurrently, a centralized procurement filing database for high-value medical equipment, linked with public government procurement channels, establishes a national price transparency mechanism across jurisdictions.

Implications for Foreign Manufacturers

Success in this evolving market requires proactive preparation:

1. Audit & Segment Portfolios: Map product lines against incoming provincial and prefectural catalogs to differentiate premium, clinical-first technology from mature lines vulnerable to aggressive volume aggregation.
2. Quantify Health Economics & TCO: Build rigorous total-cost-of-ownership data — highlighting reliability, lower consumable consumption, and extended operational lifespans — to support hospital justification for premium tiers.
3. Strengthen Bidding Compliance & Governance: Establish strict internal pricing governance and cross-province audit controls for all tender submissions to prevent non-compliance or triggering price-abnormality reviews.

Final Thoughts

China’s healthcare market is moving away from price-driven competition. By replacing destructive price wars with a unified framework that rewards clinical excellence, total cost efficiency, and transparency, these reforms create a more balanced playing field for high-quality technology.

Navigating these tender rules and regulatory shifts effectively requires proactive strategy. Backed by extensive expertise in China's regulatory and procurement landscape, Cisema helps international manufacturers navigate these policy shifts. Through comprehensive support — ranging from medical device registration in China through to post-market services — Cisema empowers your team to meet every new standard with absolute confidence.

For medical device manufacturers looking to streamline their market entry and compliance strategy in China, contact Cisema today.

Further Information

• Explore Cisema’s services for medical device registration in China.

References

• Notice from the National Health Commission, the National Administration of Traditional Chinese Medicine, and the National Center for Disease Control and Prevention on Further Improving the Centralized Procurement of Medical Equipment in Public Medical and Health Institutions
• Policy interpretation of the document "Notice on Further Improving the Centralized Procurement of Medical Equipment in Public Medical and Health Institutions."