The procurement of biological medicines constitutes a specific category within public procurement law. Since 2023, a specific regulatory framework has applied, requiring hospitals, among other things, to structure their procedures in such a way so as to ensure that biosimilar medicines have genuine access to the market. Recent case law of the Council of State also shows that these specific rules cannot be viewed separately from the general principles of equality and competition.
This therefore provides a good opportunity to revisit the key rules and consider two recent rulings in which the Council of State clarified how contracting authorities must safeguard competition between biological medicines.
Already in 2016, the then Minister of Public Health, Maggie De Block, warned in a circular that Belgium risked missing the ‘biosimilar train’. The problem? Belgian hospitals were making insufficient use of so-called biosimilar medicines. These are biological medicines that are highly similar to an already approved biological reference medicine and offer comparable quality, safety and effectiveness. A biological medicine (biological) is a medicine, the active substance of which is derived from a living organism. The reference medicine is the original biological medicine used as the reference for the development and authorisation of a biosimilar.
Biosimilars are often significantly cheaper than their reference medicines. Facilitating their market access creates competition in the market for generally expensive biological medicines, which can lead to a significant reduction in expenditure for medicines. In her circular, the Minister therefore advocated, among other things, to have reference medicines and biosimilars compete against each other within the same lot.
- The Royal Decree of 13 September 2023: specific public contract rules for biological medicines
The fact that the desired ‘uptake’ of biosimilars in Belgium was lagging is also apparent from the Royal Decree adopted in September 2023 under Minister of Public Health Frank Vandenbroucke. The Royal Decree of 13 September 2023 establishing specific rules on public contracts for biological medicines imposes a number of specific obligations on hospitals when awarding public contracts for biological medicines.
The Report to the King noted that too many hospitals were still failing to use public contract rules, or failing to use them sufficiently, to achieve genuine competition between biological medicines. In practice, procurement documents still too often contain barriers that prevent free and optimal competition. As a result, potentially significant savings for the healthcare budget remain unutilised. Unnecessary, unjustified and market-distorting selection and award criteria and technical specifications must therefore be avoided.
The key rules of the Royal Decree can be summarised as follows:
- Article
1 requires hospitals to award a public contract for the biological medicines
concerned within nine months of the first biosimilar becoming reimbursable and
available on the Belgian market.
In addition, contracts for biological medicines concluded since the Royal Decree entered into force on 2 October 2023 must contain a clause allowing the contract to be terminated when a new public contract has to be awarded pursuant to the Royal Decree. The intention is for the existing contract to end when the new contract is awarded, thereby ensuring the continuity of the access to the medicines concerned.
- Article 2 limits the duration of such public contracts to a maximum of 24 months. Subject to the conditions laid down in the Royal Decree, the contract may be extended twice, each time for a maximum of twelve months.
- Article 2: limits the duration of the public contracts to a maximum of 24 months, with the possibility of two extensions of 12 months each.
- Article 3 prohibits a number of selection criteria, award criteria and technical specifications that may restrict competition. These include:
- criteria requiring the medicine to already have been on the market for a specified period;
- criteria relating to additional services that are unrelated to the subject of the contract;
- criteria relating to the effectiveness, safety or quality profile of the biological medicines;
- criteria requiring the provision of clinical switching data or financial support for clinical switching studies
- price discounts where several lots are awarded to the same tenderer, where that mechanism also applies to at least one lot for which there is no competition due to the protection of intellectual property rights;
the inclusion of different routes of administration in the same lot; and
- a contractual link with other medicines.
The Royal Decree thus forms part of a broader policy aimed at ensuring that competition can genuinely operate in the market for biological medicines and at opening up the market to biosimilar medicines as much as possible. The legal ground for this is Article 71bis of the Act of 14 July 1994 on compulsory insurance for medical care and benefits. This provision, introduced by Article 74 of the Act of 18 May 2022 relating to various urgent provisions on health, allows measures to be adopted by Royal Decree ‘with a view to remedying the lack of free competition and/or the non-application or suboptimal application of the Public Procurements Act, and the resulting underutilisation of cheaper or potentially cost-saving alternatives.’
Although the Royal Decree was therefore largely prompted by the finding that biosimilars were not gaining sufficient access to the market, this does not mean that biosimilars may simply be given preferential treatment in public contract procedures. Recent case law of the Council of State shows that the principles of equality and competition require therapeutically equivalent biological medicines to be able to compete genuinely and on an equal footing. These principles impose limits both on how the subject and technical specifications of a contract are defined and on how tenders are evaluated.
2. Council of State, 16 January 2025, No. 261.996: comparable medicines cannot be excluded from competition without adequate justification
In this case, a central purchasing body acting on behalf of several hospitals had launched a procurement procedure for a supply contract consisting of two lots. The second lot was restricted to pharmaceutical products based on pegfilgrastim, an active substance with ATC code L03AA13.
As a result, the applicant pharmaceutical company was unable to submit a tender for its medicine Lonquex, which contains lipegfilgrastim as its active substance and falls under ATC code L03AA14. This restriction was all the more notable because, prior to the procurement procedure, the central purchasing body had conducted market research in which the applicant’s medicine had also been considered. The Council inferred from this that the central purchasing body had initially regarded that medicine as sufficiently comparable to pegfilgrastim-based medicines to consider a procurement procedure for both active substances. Other elements also indicated a certain degree of comparability between the two types of medicine.
The Council emphasised that a contracting authority enjoys a broad margin of discretion when determining the subject and technical specifications of a contract. That margin of discretion is particularly broad where the public authority bases its choice of medicines on medical considerations relating to its doctors’ therapeutic freedom.
However, that freedom does not relieve the contracting authority of its obligation to provide adequate justification for technical specifications that restrict competition. In accordance with Article 53, § 2 of the Public Procurement Act, technical specifications must ensure equal access for entrepreneurs to the procurement procedure and may not create unjustified obstacles to opening up public contracts to the competition. Where technical specifications restrict competition, the Council held that the restriction must be justifiable by accurate, relevant and legally acceptable reasons apparent from the administrative file.
This was precisely where the problem lay. Although the central purchasing body relied on therapeutic freedom and consultation with the doctors concerned during the proceedings, the administrative file contained no documents showing that the decision to exclude lipegfilgrastim was actually based on such medical considerations.
According to the Council, the mere fact that pegfilgrastim and lipegfilgrastim are different active substances with different mechanisms of action was not sufficient to justify the exclusion. The file contained no assessment by the central purchasing body demonstrating a relevant distinction between the two medicines in terms of effectiveness or quality of patient care.
Similarly, the difference in reimbursement by the National Institute of Health and Disability Insurance (“RIZIV/INAMI”) could not justify the distinction. According to the Council, the fact that Lonquex was reimbursed at 100%, whereas pegfilgrastim-based medicines were reimbursed at 85%, did not in itself mean that the two types of medicine could not compete against each other within the same contract.
The Council therefore concluded that, insofar as the technical specifications excluded the applicant’s medicine, they were not based on sufficient substantive grounds and consequently constituted an unjustified restriction of competition.
The ruling thus contains an important warning for contracting authorities: they retain a broad margin of discretion when selecting the medicines they wish to procure, but where that choice restricts the competition, the specific reasons for doing so must be sufficiently apparent from the administrative file.
Although the Royal Decree of 13 September 2023 was not yet applicable ratione temporis to the procurement procedure concerned, the ruling is consistent with the principle of competition that was subsequently expressly enshrined in that specific regulatory framework. Already under the general rules of public procurement law, and Article 53, § 2 of the Public Procurement Act in particular, technical specifications may not create unjustified obstacles to competition. The ruling thus illustrates that the specific rules of the Royal Decree of 13 September 2023 build on a broader principle of public procurement law: restrictions on competition in the market for biological medicines must be capable of objective justification.
3. Council of State, 15 July 2025, No. 263.956: formal market access is not enough
Six months later, the Council of State was once again asked to rule on a dispute concerning competition between pegfilgrastim- and lipegfilgrastim-based medicines. This time, the contracting authority had taken the earlier case law into account: the lot concerned was open to both active substances. However, that was not the end of the matter.
The central purchasing body, acting on behalf of several hospital pharmacies, used ‘net cost to the hospital’ as its main award criterion, accounting for 80 of the 100 points. This net cost was calculated by deducting the amount that the hospital could charge to the health insurance from the net price including VAT offered by the tenderer.
The Council did not consider this a problem in itself. The “RIZIV/INAMI” reimbursement is relevant to the actual cost ultimately borne by the hospital for the medicine. According to the Council, such a calculation method could therefore prima facie fall within the concept of ‘cost’ within the meaning of Article 81, § 2, 2° of the Public Procurement Act and could be suitable for identifying the most economically advantageous tender for the hospital.
The problem lay in the significant differences in “RIZIV/INAMI” reimbursement between the medicines competing within the lot. For Lonquex, based on lipegfilgrastim, the reimbursement basis was €662.29, 100% of which could be charged by the hospital. For pegfilgrastim-based biosimilars, the reimbursement basis was €532.25, of which only 85% (or €452.41) could be charged.
According to the Council, the formula used therefore gave Lonquex a de facto structural competitive advantage of €209.88. Moreover, that difference resulted from a factor which, as the tender specifications themselves stated, was beyond the control of both the contracting authority and the tenderers.
The consequences for the competition were significant. To compete with Lonquex, suppliers of biosimilars had to offer such substantial discounts that their net price would have to fall to zero or even below zero. The Council also found that the second, technical award criterion could not offset the resulting distortion.
In doing so, the ruling highlights an important distinction. An award criterion may be suitable for identifying the most economically advantageous tender for the contracting authority and yet still be unlawful if it fails to ensure genuine competition between tenderers. Article 81, § 3 of the Public Procurement Act does indeed require award criteria to ensure the possibility of effective competition. In addition, they must respect the principles of equality, non-discrimination and transparency.
The Council therefore ruled that the net-cost criterion, as structured in this contract, could distort the competition and infringed the principle of equality between tenderers.
Interestingly, the Council expressly linked its reasoning to the specific regulatory framework for biological medicines.
According to the Council, the contracting authority could not invoke Article 71ter of the Health and Disablement Insurance Act to justify the difference in treatment. That provision is intended, among other things, to encourage hospitals to make biosimilars and their reference medicines compete against each other through public procurement procedures, to thus achieve price reductions. It neither permits nor requires hospitals to exploit differences in “RIZIV/INAMI” reimbursement to the fullest extent where doing so distorts competition.
The Council then expressly referred to Article 71bis of the Health and Disablement Insurance Act and the Royal Decree of 13 September 2023 based thereon. It inferred from that regulatory framework and the Report to the King that the applicable rules encourage the use of biosimilars and the broadest possible competition between the available biological medicines. It is precisely for that reason that the Royal Decree contains measures designed to prevent public contract procedures from creating unnecessary barriers to competition.
The ruling also clarifies how the Royal Decree relates to the general principles of public procurement law. The specific regulatory framework seeks to encourage market access for biosimilars, but it does so by strengthening competition, not by legitimising a distortion of the competition in favour of a particular category of medicines.
The contracting authority should therefore have used a formula that neutralised the structural competitive advantage resulting from the significant differences in “RIZIV/INAMI” reimbursement. The Council expressly left open the question of which specific formula should have been used.
4. Take-away: two rulings, one recurrent theme
Taken together, the rulings of 16 January and 15 July 2025 provide an interesting two-part analysis of competition in public contracts for biological medicines.
In the first ruling, the scope for competition had been defined too narrowly. The contract was restricted to pegfilgrastim, meaning that Lonquex, based on lipegfilgrastim, was unable to participate. Although a contracting authority, particularly where medical and therapeutic considerations are involved, enjoys a broad margin of discretion in determining its needs, any resulting restriction of competition must be adequately justified. No such justification was provided in that case.
In the second ruling, the scope for competition was formally sufficiently broad: both pegfilgrastim-based medicines and Lonquex were eligible to participate. However, the assessment formula used made genuine competition virtually impossible because it gave Lonquex a structural advantage based on differences in RIZIV/INAMI reimbursement.
The message for contracting authorities is therefore twofold. They must not only carefully determine which medicines are eligible for inclusion in the contract, but must subsequently also ensure that the method used to assess the tenders allows genuine competition between those medicines.
The Royal Decree of 13 September 2023 follows the same logic. The specific regulatory framework was prompted by the finding that biosimilars had gained insufficient traction in Belgium and seeks to promote their market access and use. The mechanism chosen to achieve this, however, is to allow competition in the market for biological medicines to operate to the fullest possible extent.
The level playing field that underpins public procurement law therefore remains the recurrent theme. Tender specifications must not restrict competition without adequate justification, but nor may they merely create competition in formal terms while the chosen assessment methodology gives one of the competing medicines a structural and insurmountable advantage as a result of external factors.
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