Fig. 1 The Life Sciences tender market in the EU
Undoubtedly, the Life Sciences market, including both Pharmaceutical and Medical equipment companies, is one of the most important in the world. And it has a huge social impact in fighting disease and improving health conditions for everyone.
Not surprisingly, a lot of activity in this market is generated from the public sector as tendering is becoming a crucial part of the overall business.
Based on data from TED* (Tenders Electronic Daily), the online version of the “Supplement to the Official Journal” of the EU, dedicated to European public procurement, the tender-driven part of the Life Sciences exceeds €70Bn annually (budget of new tenders) capturing more than than 8% of the overall tender business published on TED, in terms of both number of tenders and budget. Based on these figures, the Life Sciences market is ranked 3rd out of 45 business sectors in TED making it one of the most important for public tendering.
The Pharmaceutical industry is the bigger of the two Life Sciences segments with an annual budget of new tenders exceeding €47Bn and a median tender of €0.53mn. The Medical equipment segment exceeds €23Bn, with a median tender of €0.46mn. Overall, pharmaceutical tenders tend to be fewer and bigger and the difference increases considerably for larger tenders.
In terms of growth, although both segments developed a lot during the past three years, the Medical equipment segment grew more aggressively at a 14% rate, on average, compared to a 10% rate for the Pharmaceutical segment.
Fig. 2 Distribution per country of the number of new Life Sciences tenders in the EU
Geography-wise, tender activity is relatively fragmented for both the Medical equipment and the Pharmaceutical segments. The above overview only shows activity, meaning numbers of tenders and not values (Euros), which we will talk about in one of our upcoming insights posts.
The top country in the Pharmaceutical segment, in terms of number of tenders, is by far Poland with 34%. In pure numbers, this means that over the last 3 years, Poland published on average over 2,100 tenders per year. Then follows Romania with 11% and some of the larger European economies, like France, Germany, Italy, and Spain, capture a combined 24% of the tender activity, leaving 31% for all other countries. The United Kingdom, a very important Healthcare and Tender Market, does not show up in this graph as it has fewer, but rather high value tenders. This is also true for some of the Nordics like Sweden, Norway, and Finland.
The Medical equipment segment is more fragmented, with Poland taking again the top position with 26%, in this case meaning an average of over 2,800 published tenders per year. Combined France, Germany, Italy, and Spain capture a 28% of the tender activity and the remaining 46% is distributed among all other countries.
As mentioned in a previous Cube RM insight, the tendering market has a significant impact on most countries and industries around Europe and other regions as well. Based on the data presented here, this is even more important for the Life Sciences as this is one of the biggest contributing sectors experiencing relatively high growth rates in new tenders released every year. It’s only natural that in the coming years Life Sciences companies, among companies from other sectors, will focus more and try to optimize their tender-driven business in order to face the challenges and harvest the benefits of this promising market. Especially for countries with very high numbers of tenders per year such as Poland, it will be important for companies to find ways to automate and facilitate the bidding process as much as possible.
*Based on data (average figures 2016-2018) from TED (Tenders Electronic Daily), ©European Union, http://ted.europa.eu, 1998–2018