Falk Pharma GmbH v DAK-Gesundheit (C-410/14)

In August 2013 DAK-Gesundheit (DAK) a statutory health insurance fund published a notice in the OJEU concerning an “authorisation procedure” for the conclusion of rebate contracts concerning medicinal products.

The procedure provided for the authorisation of all interested undertakings meeting the authorisation criteria and the conclusion with each of those undertakings of identical contracts whose terms were fixed and non-negotiable. The notice also indicated that the procedure was not subject to public procurement law.

Kohlpharma was the only undertaking which expressed an interest in response to the notice and it proceeded to enter into a contract with DAK. A notice of the contract was published in the OJEU.

Dr. Falk Pharma GmbH (Falk) brought proceedings seeking a declaration that the authorisation procedure initiated by DAK and the only contract award which resulted from that procedure were incompatible with public procurement law. Falk argued that public procurement law applies where a body classified as a contracting authority procures goods on the market and that law requires that there be a call for tenders, which implies the conclusion of exclusive contracts.

The European Court of Justice (ECJ) ruled that a contract scheme for the acquisition of goods under which a public entity contracts with any economic operator which agrees to provide the goods, in accordance with predetermined conditions, without choosing between the interested operators, does not amount to a public contract within Directive 2004/18/EC.

However, the ECJ noted that if the authorisation procedure underpinning that scheme is of cross border interest, it must be organised in accordance with the fundamental rules of the Treaty on the Functioning of the European Union, in particular, the principles of non-discrimination, equal treatment and transparency.

Comment

This judgment is extremely significant in that it shapes the concept of what is “public procurement” and what falls within the definition of a “public contract”.