Background
Facts
Decision
Implications
Comment


On March 29 2012 the Federal Court of Justice ruled that it is not a criminal offence for German doctors who have their own practice and are authorised to treat patients insured with a statutory healthcare fund to accept favours or gifts from pharmaceutical companies in return for prescribing particular drugs and medication. The ruling shows that, in this respect, there is a loophole in German anti-corruption legislation.

Background

The Federal Court of Justice ruling was triggered by the longstanding legal debate on whether doctors who have their own practice and are authorised to treat patients insured through the statutory healthcare system can be found guilty of passive corruption if they accept gifts or favours and – vice versa – whether representatives of pharmaceutical companies can be found guilty of active corruption by offering or granting benefits to such doctors.

Under German criminal law, it is a criminal offence to offer a bribe to a public official (Section 332 of the Criminal Code) or to an employee or agent of a commercial business (Section 299 of the code). By contrast, favours or gifts offered to the owner of a business do not constitute a criminal offence. As doctors who have their own practice generally also own that practice, it has long been debated whether it is a criminal offence for them to accept gifts and favours from pharmaceutical companies.

The Braunschweig Higher Regional Court, along with several other legal commentators, held the view that doctors who are authorised to treat patients insured through the statutory healthcare system were agents of a business in commercial practice – here, the statutory healthcare funds. It reasoned that by prescribing medication to such patients, doctors oblige the healthcare fund to reimburse the costs which this incurs, as patients are entitled to be reimbursed for the costs of medicines and therapeutic products which have been prescribed by the doctor. The doctor has both a statutory right and an obligation to act as if he or she were a representative of the statutory healthcare funds. Hence, a doctor must be regarded as an 'agent' within the meaning of Section 299. The logical conclusion of this is that doctors who have their own practice can be found guilty of corruption if they request or accept gifts or other favours from pharmaceutical companies in return for prescribing certain drugs or medicines. Likewise, pharmaceutical company employees would be found guilty of corruption if they offered, promised or granted gifts or favours to such doctors.

Facts

A pharmaceutical company representative had given doctors cheques totalling €18,000. These payments were based on a premium system operated by the company. Under that system, doctors received a premium of 5% of the purchase price for prescribing drugs from that specific company. The Hamburg Regional Court found the representative guilty of bribery in commercial practice and imposed a fine.

Decision

On appeal, the Federal Court of Justice ruled that doctors who are authorised to treat patients insured through the statutory healthcare system are not agents of the healthcare funds within the meaning of Section 299 of the Criminal Code. Its reasoning was as follows.

First, the doctor's primary duty is to the patient, rather than to the healthcare fund. The patient is free to choose his or her doctor. Although the doctor must consider the economic interests of the healthcare fund when prescribing drugs and medication, this does not alter the fact that the doctor's primary duty is to the patient.

Second, in this case the doctor did not act as a 'representative' of the healthcare fund when prescribing medication. The court ruled that the purchase agreement for medication was entered into between the patient and the dispensing pharmacist who sold it, whereas the healthcare fund was not a party to this agreement. The pharmacist, then, had a direct claim against the patient's healthcare fund for the costs to be reimbursed.

Third, the medication prescribed by the doctor depended primarily on the medical diagnosis and the treatment which the doctor deemed necessary.

Lastly, the court reasoned that in many cases it is the dispensing pharmacist, rather than the doctor, who ultimately decides which medication is sold, since dispensing pharmacists are frequently required to offer the patient a more economical alternative with the same effect.

In its decision, the court clarified that, as the law currently stands, doctors who have their own practice and are authorised to treat patients insured with a statutory healthcare fund cannot be found guilty of corruption. However, it did point out that responsibility for amending applicable law and closing loopholes in the healthcare system lies solely with the legislature.

Implications

The ruling means that, at the moment, doctors who have their own practice and who accept gifts or other favours from pharmaceutical companies in return for prescribing certain drugs or medicines are not committing a criminal offence under German law. The same applies to pharmaceutical company employees – under this ruling, they will no longer face criminal charges for offering bribes to such doctors.

The legal position of other doctors (eg, those employed in hospitals) remains unchanged. These are generally either public officials (eg, doctors in public hospitals) or employees or agents of a commercial business (eg, doctors in private hospitals), and as such they can face criminal charges by requesting or accepting gifts and other favours. The Federal Court of Justice ruling does not affect them. The same applies to pharmaceutical company representatives who offer or give bribes to such doctors.

Nonetheless, the ruling cannot be regarded as carte blanche for doctors who have their own practice to accept gifts or other favours from drug companies. Although under this new ruling this is not a criminal offence, numerous regulations already govern the acceptance of gifts or favours by doctors. For example, the laws on the medical profession set out detailed rules governing the relations between medical practitioners and pharmaceutical companies, and prevent doctors from requesting or accepting gifts or other favours if this could impair their independent judgement in taking medical decisions. The state medical associations may impose severe penalties for a breach of professional duty. Gifts and other favours to doctors are also prohibited under the Act on Advertising in the Healthcare Sector. Both drug companies and doctors are still required to comply with the existing rules.

Comment

It remains to be seen whether this Federal Court of Justice ruling will end the controversial discussion on whether doctors who have their own practice can face criminal charges for accepting or requesting gifts or favours. There have already been several calls for a change in the law. However, the Federal Ministry of Health sees no need to act at this stage, arguing that current restrictions on the medical profession are adequate.

For further information on this topic please contact Florian Block at CMS Hasche Sigle by telephone (+49 89 23807 264), fax (+49 89 23807 40605) or email (florian.block@cms-hs.com).

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