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GeM Medical Products Pricing Trap – How L1 Is Really Decided

Executive Insight

In medical procurement on the Government e-Marketplace (GeM), L1 is not about quoting the cheapest number. Thousands of medical vendors lose tenders every year despite being “lowest priced” because they fall into the GeM medical pricing trap.

Getting Started

The Biggest Myth in Medical Tenders: Lowest Price = L1

This assumption destroys margins and businesses.

Reality on GeM medical tenders:

  • Price comparison happens only after technical compliance

  • Non-compliant bids are removed before L1 calculation

  • L1 means lowest among fully compliant vendors

 If your product fails compliance, your price is never seen.

white and black labeled bottle


Stage One: Technical & Regulatory Compliance (Price Ignored Here)

Before pricing is evaluated, GeM checks:

  • CDSCO registration (for regulated devices)

  • BIS / safety certification (where applicable)

  • Exact model & variant matching

  • OEM authorization validity

  • Warranty, AMC / CMC compliance

  • Buyer-added technical conditions

 One mismatch = price disqualified automatically

Stage Two: Total Landed Cost, Not Unit Price

Government buyers evaluate total cost of ownership, not headline price.

L1 calculation includes:

  • Base product price

  • Installation & commissioning

  • Calibration / testing

  • AMC / CMC (if mandatory)

  • Taxes & statutory levies

 Vendors quoting low unit price but high add-ons lose L1 position.

The Reverse Auction Trap in Medical Equipment

Reverse auctions are common for:

  • ICU equipment

  • Diagnostic systems

  • Hospital infrastructure

Common mistakes vendors make:

  • Blind undercutting without cost viability

  • Ignoring service & warranty costs

  • Breaching OEM minimum pricing norms

Result:

  • Financially unviable L1

  • Order cancellation

  • OEM complaints

  • Vendor rating damage

Winning at the wrong price is worse than losing the bid.

Abnormally Low Pricing = High Risk

In medical products, very low prices trigger:

  • Buyer suspicion

  • OEM verification

  • Quality & safety scrutiny

Especially risky for:

  • Life-saving equipment

  • Diagnostic & imaging systems

  • Emergency medical devices

Dumping prices often leads to bid cancellation or vendor flagging.

Behavioural Scoring: The Invisible Factor

GeM tracks vendor performance silently.

Factors include:

  • Past delivery delays

  • Order cancellations

  • Compliance failures

  • Buyer ratings

 Vendors with poor history may lose L1 even when compliant and cheap.

Common Pricing Mistakes Medical Vendors Make

  • Pricing without factoring CDSCO & compliance cost

  • Treating medical tenders like consumables

  • Ignoring post-order execution expenses

  • Aggressive RA participation without exit strategy

Each mistake compounds risk and loss.

How Leegal Protects Vendors From the Pricing Trap

Leegal acts as a pricing-risk and compliance strategy partner for medical vendors.

✔ Pre-bid compliance & L1 probability assessment

✔ Pricing & reverse auction risk modeling

✔ Make in India & OEM pricing alignment

✔ Post-order execution & payment protection

✔ Legal remedies in unfair rejection or cancellation

We help vendors win profitably, not destructively.