Bulgarian drug procurement bill blocked, defying EU infringement process

Bulgaria’s parliamentary majority has been blocking the adoption of a key drug procurement bill for more than two months. The draft legislation requires private hospitals to conduct public tenders when purchasing medicines.

The European Commission, which launched infringement proceedings against the country in 2018, has been pressing for the reform.

Private hospitals were required to hold public tenders for medicine purchases until 2016 when this obligation was removed from the law at the proposal of Boyko Borissov’s centre-right GERB party, which currently plays a leading role in the government.

Two years later, the European Commission initiated infringement proceedings against Bulgaria for allowing private hospitals to access the resources of the state-run National Health Insurance Fund without conducting public tenders or procurement procedures.

“The problem is that the bill has stalled because a large part of the ruling majority is against it. The delay depends entirely on them - if they decide not to proceed, there will be no second reading,” Bozhidar Bozhanov, co-chair of Democratic Bulgaria and one of the bill’s sponsors, commented to Euractiv.

Lobbying pressures halt reform

Despite repeated attempts to reintroduce the requirement for private hospitals to hold public tenders, the lobbying power of private medical institutions has prevailed, and the proposal has consistently failed to pass on second reading in parliament.

In early May, the liberal coalition We Continue the Change - Democratic Bulgaria, the largest opposition force, used a procedural loophole to once again pass the bill on public tenders for medicines at first parliamentary reading.

Crucial support came from the Bulgarian Socialist Party (BSP), which is part of the ruling coalition but backed the legislation. However, for two months, GERB has blocked the bill from being reviewed in parliamentary committees, preventing its final adoption.

There are 116 private hospitals in Bulgaria, accounting for 34% of the country's total hospitals. According to the bill’s sponsors, the price difference for the same medicine from the same manufacturer between public and private hospitals can reach 14-15 times, and in some cases up to 28 times.

This discrepancy is most evident in oncology treatments, according to Euractiv’s findings.

Bozhanov noted that if the ruling coalition supports and adopts the bill, Bulgaria would comply with the EU directive on public procurement and avoid potential financial sanctions.

“When public tenders are not held, prices are higher. In some cases, this even involves related suppliers, meaning a supplier is linked to the private hospital, offers inflated prices, and the state health fund pays the bill,” he said.

The debate on tenders

According to the bill’s authors, exempting private hospitals from public procurement obligations results in an annual loss to the state budget of more than €50 million.

The Health Ministry declined Euractiv's request to comment on the issue.

The ruling coalition’s refusal to adopt the changes aligns with an analysis by the think tank Expert Club for Economics and Politics (EKIP), which challenges the necessity for private hospitals to procure medicines and supplies through public tenders.

According to EKIP analysts, private hospitals do not fall under the scope of EU Directive 2014/24 on public procurement, as they do not meet the established criteria.

The organisation notes that in Germany, Austria and the Netherlands, private hospitals are excluded from the general procurement legislation.

“In the event of legal proceedings before the EU Court of Justice, Bulgaria would have a strong case. The European Commission has committed serious procedural violations in its infringement procedure, which contradict the principles of EU law,” EKIP claims.

[Edited by Vasiliki Angouridi, Brian Maguire]