Bulgaria ruling party moves to end private hospital procurement exemption amid EU legal case

Bulgaria’s ruling Progressive Bulgaria party has introduced legislation requiring all hospitals that receive public health insurance funding to conduct public procurement procedures. The move revives a long-standing reform effort as the country faces legal action from the European Commission over its exemption of private hospitals from EU procurement rules.

The proposed amendments to the Public Procurement Act and the Medicinal Products in Human Medicine Act would eliminate distinctions based on ownership, placing state, municipal, and private hospitals under the same rules when purchasing medicines and medical supplies.

The initiative comes as Bulgaria defends itself before the Court of Justice of the European Union, following the Commission’s referral of the country to the court in December 2025 for incorrectly transposing EU public procurement legislation.

“There must be equal treatment for all healthcare providers using public resources,” said Health Minister Katya Ivkova. “The objective of centralised contracting is to ensure the same price for the same medicinal product and to address the imbalances identified in the procurement of high-cost medicines.”

Dual System, Unequal Pricing

According to the European Commission, Bulgarian law unlawfully exempts private hospitals from procurement obligations, even though more than half of their funding comes from public sources. Brussels argues that this is incompatible with the EU definition of a “body governed by public law,” which also covers entities that are not state-owned but are predominantly publicly financed.

“The Medical Institutions Act explicitly states that healthcare providers are equal regardless of their ownership structure,” said Progressive Bulgaria MP Georgi Iliev when presenting the proposals.

“Bulgaria’s experience has shown that private hospitals have been able to circumvent public procurement requirements, resulting in different prices being paid by the National Health Insurance Fund for the same medicines,” he added.

The dispute extends beyond a legal disagreement over procurement rules. For years, Bulgaria’s dual regime has allowed private hospitals to negotiate directly with suppliers, while state and municipal hospitals have been required to organise public tenders.

Health experts and successive governments have argued that the system enables affiliated distributors to sell medicines at substantially higher prices that are ultimately reimbursed by the National Health Insurance Fund.

The issue has repeatedly sparked allegations of corruption. Former NHIF governor Decho Dechev revealed that the same oncology medicine, pemetrexed, had been purchased for between €65 and €530 depending on the hospital. Later parliamentary data showed price gaps of up to twentyfold for identical medicines.

Centralised Purchasing of Unlicensed Medicines

A second amendment would introduce centralised electronic tenders and framework agreements for unlicensed medicines, with the Health Ministry acting as the central purchasing authority.

The measure would establish uniform pricing across hospitals and prevent situations in which the same medicine is purchased at dramatically different prices by different healthcare providers. The final goal is to end the practice whereby a medicine can be bought for €50 in one hospital and at ten or even one hundred times that price in another.

Ivkova later confirmed that the government supports the proposed changes.

Under the proposal, the ministry would conclude framework agreements as the central purchasing body for the healthcare sector. Hospitals would then be able to sign contracts at the negotiated prices while retaining the option to secure even lower prices independently.

Background

Private hospitals were subject to public procurement requirements until 2016, when the obligation was removed through amendments introduced by the then-ruling GERB party (EPP).

The issue has become one of the most contentious debates in healthcare governance in Bulgaria, as private hospitals have been able to purchase medicines through affiliated distributors and subsequently bill the National Health Insurance Fund at substantially higher prices.

Over the years, numerous cases have emerged in which the public insurer paid up to twenty times more for the same medicine depending on the hospital where it was administered. Attempts to curb the practice through procurement reforms, electronic tenders, and other control mechanisms have repeatedly faced strong resistance from vested interests.

The European Commission first opened infringement proceedings against Bulgaria in January 2019 and brought the case before the EU court six years later.