Advertising and promotion

Regulation

Summarise the rules relating to advertising and promotion of medicinal products and medical devices, explaining when the provision of information will be treated as promotional. Do special rules apply to online advertising?

Advertising of medicinal products and medical devices is governed by several laws (eg, the Act on the Advertising of Medicinal Products (HWG) and the Unfair Competition Act (UWG)) and under the regulations governing specific professions (eg, the Medical Association's Professional Code). These regulations generally pertain to sales-related advertising.

In principle, an advertisement must not be misleading (eg, claiming certain success, no adverse effects, or effects that a medicinal product does not have), must not include assessments or evaluations by non-professionals, and must not refer to telemedicine. Furthermore, advertisements regarding medicinal products that have not been authorised or prescription-only medicinal products are prohibited outside the circle of healthcare professionals.

All regulations on advertising apply equally to online advertising.

Inducement

What regulations exist to discourage the provision of inducements to healthcare professionals to prescribe, sell, supply or recommend use of a particular medicinal product or medical device?

The Social Law, the Penal Code, and the laws governing specific professions include regulations designed to prevent the granting of unfair advantages to medical service providers. Consequently, medical service providers are prohibited from accepting such advantages. Additionally, certain regulations under the HWG and the UWG establish penalties and administrative sanctions for violations.

Reporting transfers of value

What requirements apply to recording and publishing details of transfers of value to healthcare professionals and organisations by companies marketing medicinal products or medical devices?

In principle, the transfer of value for advertising purposes is prohibited. In a very limited number of exceptional circumstances, pharmaceutical manufacturers may provide promotional items of minimal value, such as gifts consisting of a specific, precisely calculated sum, a defined quantity of goods, or customary accessories or ancillary services (eg, reimbursement for travel expenses).

Documentation obligations are not stipulated by German law itself. However, certain codes of conduct applicable to the pharmaceutical industry impose documentation and publication requirements for such transfers.

Enforcers

Describe the bodies involved in monitoring and ensuring compliance with advertising controls for medicinal products and medical devices, distinguishing between any self-regulatory framework and control by the authorities.

In terms of competition law, companies and other participants in the healthcare system (eg, physicians and hospitals) can facilitate the enforcement of advertising restrictions in the healthcare system by seeking a cease-and-desist declaration with a penalty clause, followed by judicial injunction proceedings (if necessary, accompanied or followed by principal proceedings).

In addition, government bodies and non-governmental organisations, such as the Centre for Protection against Unfair Competition or local authorities authorised by the applicable states, may take action, particularly in cases of violations of the HWG or the UWG, or both.

Violations may constitute an administrative or criminal offence, or both. In the latter case, public prosecutors' offices and courts will act accordingly. If only administrative offences are involved, the administrative authorities – depending on the applicable state – are responsible.

Sanctions

What are the possible financial or other sanctions for breach of advertising and promotional controls for medicinal products or medical devices?

Violations of advertising prohibitions under the HWG may result in financial and other consequences. In addition to fines of up to €50,000, imprisonment for up to one year may be imposed. Furthermore, individuals engaging in illegal commercial practices under the UWG may face lawsuits for injunctions at risk of repetition to cease and desist and claims for damages.

If a competitor issues a cease-and-desist letter, associated costs – such as the opposing party’s legal fees – may arise. In the event of court proceedings, court fees must also be accounted for.

A cease-and-desist letter containing a penalty clause will incur penalty payments if the party involved breaches the terms of the cease-and-desist letter.

In extreme cases, particularly in violations of laws governing specific professions, physicians may also face professional sanctions.

Sale and supply

Regulation

Are there special rules governing the dispensing or sale of particular types of medicinal products or medical devices?

There are various special regulations in Germany that the Medicinal Products Act (AMG) governs. These relate to opiates and particularly hazardous medicinal products, the prescription and distribution of which must be reported and registered separately. There are also special rules for individual products (such as blood products), which are supplied directly by physicians and not, as usual, by pharmacists.

Online supply

What laws and guidelines govern online dispensing, sale and supply of medicinal products and medical devices?

The mail-order pharmaceutical trade has been licensed in Germany since 1 January 2000 (section 43(1) of the AMG). Approved German mail-order pharmacies are fully fledged on-site pharmacies holding a mail-order licence under the Pharmacy Act (section 11a). They are subject to the same legal requirements and oversight mechanisms as traditional on-site pharmacies. Depending on the category, medical devices may also be sold online. There is generally no pharmacy obligation.

Pricing and reimbursement

What are the controls imposed on pricing of medicines and medical devices and reimbursement by national social security systems that are applicable to manufacturers, distributors and pharmacists?

Medicinal products

In Germany, the pharmaceutical pricing and reimbursement system is governed by several laws, for example, the AMG, Social Security Code Book Five (SGB V) and the German Drug Price Regulation (AMPreisV).

German law provides several options to control the pricing of medicinal products, for example:

  • 'uniform selling price' according to section 78 of the AMG;
  • additional charges in terms of wholesalers and pharmacies;
  • AMNOG procedure;
  • fixed prices;
  • statutory discounts;
  • price moratorium;
  • discount agreements between pharmaceutical manufacturers and health insurances;
  • open house agreements;
  • tender;
  • indications for treatment, section 92(2) of the SGB V;
  • excluding provision of services, section 34 of the SGB V or by guidelines in accordance with section 92(1), sentence 2 No. 6 of the SGB V; and
  • framework agreements.
Price regulation of medicinal products

With regard to over-the-counter drugs, a specific price regulation does not exist. Such pharmaceuticals are not reimbursable under the statutory health insurance (SHI). Pharmacy-only but non-prescription medicinal products are also generally neither reimbursable nor price-regulated in the SHI system.

Prescription pharmaceuticals are subject to a comprehensive and complex price regulation system. However, prescription pharmaceuticals are generally reimbursable by the SHI. Pharmaceutical manufacturers are required to ensure the uniform selling price according to section 78(3) of the AMG. Discounts for wholesalers and pharmacists are generally prohibited.

In terms of wholesalers, additional charges apply. Pursuant to section 2, sentence 1 of the AMPreisV, a fixed charge of €0.73 and VAT must be levied on the pharmaceutical manufacturer’s selling price; additionally, a charge of up to 3.15 per cent, but not exceeding €37.80, may be levied on the selling price (excluding VAT).

Pharmacies receive remuneration for supplying finished medicinal products in the form of a fixed surcharge of 3 per cent and a prescription flat rate of €8.35 for standard operations, plus €0.21 for emergency service coverage, and €0.20 to fund additional pharmaceutical services under section 129 (5e) of the SGB V and VAT.

In practice, price competition through discounts and allowances, particularly at the wholesale level, has shifted toward the granting of discounts (Skonti). According to the traditional definition, Skonti refers to cash rebates paid before or immediately after the due date upon payment of the purchase price.

Reimbursement of medicinal products in the field of outpatient care

With regard to the reimbursement of medicinal products in the field of outpatient care, the Act on the Restructuring of the Pharmaceutical Market (AMNOG) procedure applies and covers the price regulation of innovative pharmaceuticals in Germany.

In the first six months after market entry of a medicinal product, the price set by the pharmaceutical manufacturer applies. Pharmaceutical companies intending to launch a pharmaceutical with a new active ingredient on the German market must prove its additional benefit (section 35a Social Security Code Book Five (SGB V)). The Joint Federal Committee (G-BA), the highest decision-making body in the SHI, determines the specific proof which is required for the respective pharmaceutical. The result of the assessment is decisive for the further pricing procedure. For pharmaceuticals with a proven additional benefit, the National Association of Statutory Health Insurance Funds (GKV-SV) and the respective pharmaceutical manufacturer negotiate a reimbursement amount for the statutory health insurance within six months as a discount on the original sales price, which was determined by the pharmaceutical manufacturer itself. However, an arbitration commission will determine the reimbursement amount if no agreement has been reached.

In this case, the G-BA concludes that the new medicinal product offers no additional benefit compared to the appropriate comparative therapy, the medicinal product can be transferred to the fixed amount system. Notwithstanding, where a medicinal product without an additional benefit cannot be allocated to a fixed amount group, a reimbursement amount may also be agreed upon, but the annual therapy costs shall not be higher than for the appropriate comparative therapy.

Moreover, the SHI may receive a discount from the pharmacist for medicinal products supplied at their expense, for which no fixed amount has been granted in accordance with section 35 of the SGB V (section 130a (3), SGB V). The pharmaceutical manufacturers are obliged to reimburse the pharmacies for the discount.

The SHI may receive the following statutory discount on the selling price of the pharmaceutical manufacturer, VAT excluded the following:

  • manufacturer discount, section 130a(1) and (1a) of the SGB V;
  • discount with regard to vaccines, section 130a(2) of the SGB V;
  • price moratorium discount, section 130a(3a) of the SGB V; and
  • generic discount, section 130a(3b) of the SGB V.

Moreover, further discounts may apply, due to discount agreements between the pharmaceutical manufacturer and the health insurance, pursuant to section 130a(8), SGB V).

Reimbursement of medicinal products in the field of inpatient care

The costs of medicinal products in the field of inpatient care are regularly considered by the billing catalogues applicable to hospitals.

Medical devicesPricing and reimbursement system of medical devices in the field of outpatient care

The pricing and reimbursement system of medical devices in Germany is mainly governed by the SGB V. The options to control the prices of medical devices are the following:

  • digital health appliances (DiGA);
  • catalogue of therapeutic appliances;
  • discounts, if possible under the HWG and UWG; and
  • excluding provision of services.

With regard to medical devices in low- risk categories, whose main function is essentially based on digital technologies and which are intended to support the detection, monitoring, treatment or alleviation of diseases or the detection, treatment, alleviation or compensation of injuries or disabilities in the insured person or in the care provided by service providers, are classified as DiGA. Such DiGAs are listed in the catalogue for digital health appliances, according to section 139e of the SGB V. The manufacturer of the DiGA and the GKV-SV will make an agreement with regard to the reimbursement, similar to the above- mentioned AMNOG procedure. The catalogue of therapeutic appliances, which must be compiled by the GKV-SV in accordance with section 139(1) 1, SGB V, contains all therapeutic appliances that are covered by the SHI's obligation to provide benefits.

In accordance with section 33(1) 1 of the SGB V, insured persons are entitled to the provision of hearing aids, body replacement parts, orthopaedic and other aids that are necessary in individual cases to ensure the success of medical treatment, to prevent an impending disability or to compensate for a disability, insofar as the aids are not to be regarded as every day objects or are excluded in accordance with the statutory ordinance issued based on section 34 (4) of the SGB V.

Pricing and reimbursement system of medical devices in the field of inpatient care

However, the costs of medical devices in the field of inpatient care are regularly considered by the billing catalogues applicable to hospitals.