ZEW Economist Adriano De Leverano on Joint Procurement in Healthcare Over Coronavirus

Whereas the Italian government recently issued a nationwide lockdown due to the spread of the coronavirus ordering people to leave their homes only for work or health reasons, the rest of Europe is also threatened by the effects of the pandemic. In the light of the EU’s health ministers still trying to find consensus on launching a joint procurement process for the purchase of medical supplies, the need for such processes to come into effect is all the more urgent. Dr. Adriano De Leverano, economist in the Junior Research Group “Economics of Public Procurement” at ZEW Mannheim, comments on this matter.

“The coronavirus has hit Italy hard with hospitals requiring antivirals, sterilizers, blankets, and ventilators while struggling with capacity shortages. The Italian national procurement agency, by relying on an emergency solicitation procedure, is already close to the award of a contract worth 258 million euros for the provision of medical supplies including surgery gloves, masks, detergents, and disinfectants among others.

Yet, some of the required equipment is imported from other European countries. In this context, centralizing the purchase process on the European level might match demand and supply not only faster, but also more efficiently than what local contracting authorities are doing in some Italian regions.

Europe is currently facing massive asymmetric needs and this can be a crucial stage to implement centralized purchases by the EU since research results show that the centralization of public procurement is beneficial. Centralizing public procurement for big contracts has proven to be effective in improving procurement outcomes since a centralized buyer has more bargaining power vis-á-vis a supplier.

We must respond to the effects of the pandemic spreading rapidly across Europe. During this emergency, the principle of solidarity underlying the EU should be recalled. The launch of a joint procurement process could reinforce credibility of the EU’s institutions. Efficiency and competence from coordinated and centralized healthcare purchases on the supranational level are more needed than ever.”