Discount contracts for medicines are possible

The Public Procurement Senate of the Düsseldorf Higher Regional Court has ruled that the BAHN-BKK procedure, by which the health insurance company wanted to dictate rebate contracts and the conditions to pharmaceutical companies, was inadmissible, but that under certain conditions such contracts were certainly possible.

In April 2011, the BAHN-BKK wrote to pharmaceutical manufacturers and informed them that it wanted to conclude discount contracts with as many pharmaceutical manufacturers as possible for about 290 active substances as of 1 July 2011. One of the health insurance company's aims was to ensure that the insured persons would receive "their medicine", the medicine prescribed by their doctor, and not another medicine with the same or a similar combination of active ingredients. The health insurance company specified discount rates of between 3% and 39.8%, depending on the active ingredient. Initially, there was no public invitation to tender, but this was later made up for.

Four pharmaceutical companies (generic drug manufacturers) objected to this. In June 2011, the 3rd Federal Procurement Chamber then ruled that the BAHN-BKK's approach was in breach of procurement law and that a Europe-wide invitation to tender should have been issued. In addition, BAHN-BKK had violated competition principles. BAHN-BKK determined the price and not - as is usually the case in a tender - the bidder. This deprived the bidders of the possibility to calculate the price. The fact that the health insurance fund did not make a selection decision among various bidders as provided for in the award procedure per se, but wanted to conclude discount agreements with all manufacturers if possible, did not change the obligation to invite tenders.

The Public Procurement Senate of the Higher Regional Court (Oberlandesgericht) today ruled that the discount contracts of BAHN-BKK under review here were in breach of public procurement law. The tender had not been divided into "lots", and the companies had had to offer their entire product range as far as the active substances or combinations of active substances were concerned. Furthermore, the contract clause was objectionable, according to which, in the case of a pharmaceutical group, all affiliated companies would also have had to conclude the contract. In its decision, the senate pointed out that in this case only the concrete way of awarding the contract had been objected to. In the opinion of the Senate, the conclusion of pharmaceutical rebate contracts in the intended manner was not fundamentally inadmissible outside of public procurement law and could take place under certain conditions.

The decision is legally binding and will be available on the internet at in about two weeks.

(File no: VII-Verg 57/11, VII-Verg 58/11, VII-Verg 59/11 and VII-Verg 67/11)


Source: Press release of the OLG Düsseldorf


Goldberg Attorneys at Law

Attorney at Law Michael Ullrich, LL.M. (Information Law)