Germany Criminalizes Corruption in the Health Care System

Germany Criminalizes Corruption in the Health Care System

On July 29, 2015, the German government adopted a Draft Act against corruption in the health care system (Entwurf eines Gesetzes zur Bekämpfung der Korruption im Gesundheitswesen, the "Draft Act"). The Draft Act marks a significant step in the fight against corruption in Germany's health care system. At the same time, it raises a number of issues due to its broad wording. The Draft Act will certainly result in protracted discussions in the German Parliament, but however these discussions develop, it is highly probable that an act ultimately will be adopted. Thus, life sciences companies should examine their compliance procedures for interactions with health care professionals in Germany.

Why the Draft Act?

The German Federal Court of Justice held in 2012 that self-employed health care professionals are not subject to the existing anti-corruption rules: they are neither public officials nor representatives of the public health insurers. While corruption in the health care system is already sanctioned under professional regulations and regulations on promotion of medical products, the German legislature determined that criminal sanctions were required as well.

Who is Affected?

The Draft Act purports to cover both the giving and taking of benefits. On the taker's side, all health care professionals that work in a regulated profession are affected. This means not only doctors and pharmacists but also nurses, physiotherapists, and other health care professionals, whose education is regulated or who may carry a professional title only subject to regulated license. On the giver's side, the Draft Act applies to anyone involved with health care products or services: pharmaceuticals, medical devices, and other medical products, as well as the treatment of patients or laboratory analysis. The Draft Act utilizes categories from both product regulation and social security regulation in relation to reimbursement (e.g., by listing both "medical devices," which is a category under product regulations, and "medical aids," which is a term under reimbursement law, comprising medical devices from a product regulation perspective). But the product categories are in general well defined by prior case law, except perhaps for the those on the fringes of other medical products.

How is "Corruption" Defined?

The Draft Act defines "corruption" based on two elements. First, there has to be a benefit given or taken, promised or requested. "Benefit" is defined broadly to include both material and intangible benefits. Benefits may include invitations to conferences or even consideration payable (at arm's length) under a service contract, and benefits to designated third parties (e.g., a family member of the health care professional) are also covered. Second, there must be a nexus with a sought or offered advantage, which is a key factor. The Draft Act considers two scenarios: (i) the product or service being preferred unfairly over competitors, or (ii) a violation of professional ethics rules on independence of medical choices from benefits. At the same time, the Draft Act confirms that legitimate cooperation in the health care sector and the resultant compensation remain unaffected. Considering the highly cooperative nature of the health care sector, where specialists interact among themselves and with industry and service providers, it will be challenging to distinguish legitimate cooperation from illegal benefits.

Violations will be pursued only if a complaint is filed. The public health care insurers have created task forces for combating corruption under earlier legislation. It is likely that such task forces will file such complaints if they are apprised of apparent violations.

The proposed penalties are monetary fines or imprisonment of up to three years and, in certain serious cases, of between three months and five years of imprisonment.

The political discussion will resume after the summer break. However, industry should proactively examine its relationships with health care professionals in Germany, particularly in relation to any incentives to prescribe or purchase a pharmaceutical or medical device.

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Christian B. Fulda

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