Your character can carry and equip one healing item in the
spot on your inventory. This can be either medical supplies or a healing potion. Press
to bring it out, and
to use it on yourself. For this achievement, however you need to use medical supplies on others (Potions don't help with this at all.) When near another character, hold
to use the medical supplies on them.
You will usually start with one medical supplies already on you, and can collect more during a mission, look for small boxes with a green outline.
I'm not sure if using supplies on Bot teammates count for this achievement, please let me know in a comment if they do.