We would like to inform you that the German Ministry of Justice recently provided a new draft anticorruption law explicitly referring to the healthcare sector.  This draft new law – once adopted – may also affect your German business, in particular the collaboration with German physicians, pharmacists, nurses and many other healthcare professionals ("HCPs").  A similar draft law was already discussed to be adopted and established in the German Criminal Code (Strafgesetzbuch – "StGB") in 2013.  However, at that time, the legislative process could not be finalized due to the upcoming elections and a change in the government and parliament.  Moreover, also Bavaria recently provided a very similar draft new law to the German Federal Assembly (Bundesrat).

Outline

There are already anti-corruption provisions in the German Criminal Code.  However, they currently only cover

  • corruptive agreements with respect to granting (undue) benefits and the offering a bribe to public officials (or person entrusted with special public service functions), e.g. a physician in a public hospital; and
  • corruptive agreements with respect to granting anundue benefit and offering a bribe to employed officers and service providers in commercial practice.

Thus, corruptive agreements with respect to granting an undue benefit and offering a bribe to the principal of a commercial practice or business (e.g. a self-resident physician or a pharmacist) or to other HCPs which are no public officials and/or are no employees are not covered by current criminal laws.  I.e. granting an undue benefit to employees of an HCP in a private practice may be a corruptive act, but not the granting of an undue benefit to the HCP himself/herself. In 2012, the criminal branch of the German Federal High Court ("BGH") indicated in its decision that there is a gap in the German anti-corruption provisions of the German Criminal Code.

The granting of undue benefits to e.g. self-employed physicians ("resident doctors") is of course prohibited by other German laws, such as the German Health Care Advertising Act (Heilmittelwerbegesetz – "HWG").  However, as said, it is not covered by criminal laws yet.

If the draft new law will be adopted, there will be the followingimplications:

A pharmaceutical/medical devices company will in particular have to be more careful in collaborating with HCPs who are self-employed HCPs or employed at privately held or funded hospitals. These HCPs are currently not subject to the criminal anti-bribery laws in Germany. The same applies for medical personnel who are involved in the public health care provision (e.g. some nurses, pharmacists etc.). We assume that there will be no significant changes to the draft new law in the legislative process. However, the process has not really started yet, thus, the adoption of the draft new law will likely take some time.

Details of the Proposal

The proposed new criminal provision stipulates that

whosoever offers, promises or grants a benefit to a – specifically defined – HCP for himself/herself or a third party in connection with practicing his/her profession as consideration of the HCP for (1) according an unfair preference in the national or international competition or (2) violating his/her duties of the professional practice in any other kind at the purchase, the prescription or the dispensing of pharmaceuticals, remedies, aids or medical devices or at the assignment of patients or test material shall be liable to imprisonment not exceeding three years or a fine.

The demanding, allowing to be promised and/or accepting of a bribe by such a HCP certainly will be sanctioned respectively.

The draft criminal provision intends to aim at the following: the protection of the competition in the healthcare sector as well as the protection of the confidence of the public in the integrity of decisions of HCPs.

The draft new criminal provision covers all HCPs who need a state-regulated education for practicing or using the professional title.  Thus, not only so-called "academic HCPs" (such as physicians, dentists, veterinarian, pharmacists, psychological psychotherapists and psychotherapists for children and teens) are included, but also so-called "paramedical professions" such as nurses, ergo therapists, speech therapists and physiotherapists.  Thus, almost all HCPs are covered by the draft new law – irrespective of them being employed or self-employed and irrespective of them providing services in the public or private health insurance.

The draft new law prohibits to offer, promise or grant a benefit as consideration for the (1) according of an unfair preference in the national or international competition or for the (2) violating of duties of the professional practice in any other kind, at the purchase, the prescription or the dispensing of pharmaceuticals, remedies, aids or medical devices or at the assignment of patients or test materials.

The benefit is defined in a very broad manner and includes even things of no significant value.  Generally e.g. invitations to congresses, the provision of share of profits as well as the reimbursed participation in observational studies may qualify as a benefit and its accepting, offering or granting may cause criminal liability, provided that all other conditions of the proposed provision are fulfilled, too; in particular, there has to be a corruptive agreement ("Unrechtsvereinbarung", see below).

The benefit is offered, promised or granted with a criminal consideration where this happens for (1) an unfair preference in the competition or a (2) violation of duties of the professional practice.  Since one may only favor anyone if there are at least two competitors and this may not be the case if a product cannot be replaced by another, also the violation of duties of the professional practice shall be criminal liable according to the draft new law.  These duties include such of the respective professional rules but also e.g. provisions regulating certain prices which a pharmacist has to request for a product.

Important is, however, that the draft new law requires a concrete corruptive agreement.  This means that the benefit has to be accepted and granted as a consideration for the HCP's concrete preferring of the product or service of the one granting the benefit or for a concrete violation of the HCP's duties.

A person violating the draft new criminal provision may be liable to imprisonment up to three years or a fine – similar to the already existing fines for corruption in the private sector.  In case the offender acts commercially (i.e. in order to generate ongoing revenues) or the benefit is of a very high value, the criminal act may be sanctioned with imprisonment up to five years.  One may already act commercially when acting for a commercial company.  The increased penalty may, according to the draft reasons of the ministry of justice, also apply if the criminal action causes a significant risk to a patient's health.

The violation of the draft new criminal provision shall only be prosecuted if there is a respective request or in case of particular public interest.  All violated parties may request the prosecution.  These are in case of a preference in the competition, the competitors; patients shall only be allowed to request prosecution if their right of a treatment which is not influenced by undue benefits and which is oriented at the patient's benefit is violated.  Sick funds may also only be allowed to request prosecution provided that the corruptive agreement violates duties of the HCP which exist with respect to the sick funds.  Moreover, the professional chambers of the HCP as well as any professional association which represents the interests of violated parties in the competition, may request prosecution.