In June 2016 the Bundestag revised its anti-corruption law with the aim of closing a gap in the demand side of corruption in the healthcare sector. One year on, what has been the effect of this law in light of the German Pharma Industry’s Transparency Codex?

What changed in the law?

In 2012 a ruling by the German Supreme Court held that doctors in private practice did not fall under the scope of application of public bribery provisions, since they could not be considered as public officials according to the law. This meant that no criminal liability arose for bribery offences by doctors in private practice.

The Supreme Court’s ruling had been subject to heavy criticism for creating a double standard that failed to close the door on corrupt business practices in the medical industry. The amendments to the law in July 2016 were enacted to address this issue.

The new Sections 299a and 299b of the Criminal Code aim to ensure that all medical practitioners are held to the same standards: Criminal liability applies to any member of the medical profession who demands, allows himself or herself to be promised or accepts a benefit for himself or herself or another as consideration for unfair preference in an internal or external competition by means of prescribing or acquiring medical equipment or medicaments or allocating patients. The briber is equally punishable under these provisions.

The effect of the new law for German private practitioners is that they may be criminally prosecuted in relation to any income related to their medical practice that was not earned through their expertise as a medical doctor.

Criticism and opposition

The new law was heavily opposed for fear of opening the floodgates to lawsuits against individual doctors in witch-hunt scenarios fuelled by the uncertainty of where a legitimate business relationship between a doctor and pharmaceutical company begins and ends. Because of course, there are legitimate partnerships that are important for the sustainable development of medical care, and when transparently managed, they can be beneficial for all.

The Transparency Codex

In 2015 the German Association of Voluntary Self-regulation of the Pharmaceutical Industry (FSA) revised its Transparency Codex so that the monies paid by the pharma industry to doctors would be published on an annual basis. The FSA covers over 75% of the German pharma market, and in its 2016 report it put a number on the flow of funds from pharma companies to doctors for the very first time.

The 57 leading pharmaceutical companies in Germany disclosed that they paid some 575 million euros in 2015, and some 562 million euros in 2016 by 54 pharmaceutical companies. These sums were spent on doctors, hospitals, and other medical foundations, clinical studies, research, events, speeches and further education.

This Codex has created a source of data and a level of transparency that has been picked up by the media in Germany. The sums received by individual doctors have been particularly highlighted in some media reports as undermining trust in the medical profession, and even being evidence of potential corruption.   

Collective Action

The revised law came into force some eight months ago and to date only four cases directly linked to the new provisions have been recorded. It might just be the calm before the storm that was anticipated by the critics, but so far the most tangible effect of is the uncertainty it creates for doctors in their collaborations with pharmaceutical companies.

The insight the FSA annual reports under the Codex give into payments made by the pharma industry to health professionals has neither reduced concerns about the ethics of such arrangements nor allayed the uncertainty for healthcare professionals about what they can and cannot accept from pharma companies.

The FSA appears to have recognised that it needs to step up its multi-stakeholder approach in an open, critical and constructive intensification of its efforts.

Collective Action and self-regulation go hand-in-hand, it’s important that the FSA’s efforts ensure that the doctors and other beneficiaries of pharma money are clear about their obligations under the law, and that the pharma industry has robust policies and procedures in place to ensure that they do not overstep when dispensing their products and money.

For its part, the FSA’s disciplinary body will need to act swiftly to complaints raised under the Codex, to ensure that bright lines are established for all stakeholders sooner rather than later.