It was decided yesterday: a tender procedure is necessary also in the market for medical devices! The third Procurement Review Chamber of the Federal Cartel Office has ruled in a landmark decision (VK 3 – 193/09, November 12, 2009) after a representative court proceeding with almost 70 parties that the rules of the fourth Chapter of the Law Against Restraints on Competition have to be applied without any exceptions. Professor Dr. Heiko Höfler and Dr. Thomas Mösinger from Orrick Hölters & Elsing convinced the procurement review chamber with their arguments in favour of an obligation to public tendering also in the market of medical devices and succeeded over more than 65 opposing parties. 

MAKO Handels GmbH from Fulda which is specialized in the field of medical devices had filed a procurement review procedure against the Knappschaft from Essen and seven further public health insurance companies at the Federal Cartel Office. Subject of the case was the failure to call for a European-wide tender for various medical devices. 68 contractors had been assigned informally by the Knappschaft, all of which were summoned by the Federal Cartel Office. The Procurement Review Chamber has now declared that the assignments are invalid due to the breach of public procurement laws.

The Federal Cartel Office brings a long-standing practice of numerous public health insurance companies to its end. They used to assign high-volume long term contracts for medical devices (such as optical aids, hearing aids, prostheses, walker frames, wheel chairs and other orthopedic devices and medical supplies) without complying with European public procurement law. In doing so, German public health insurance companies so far have awarded contracts with an overall volume of 5 billion Euros annually without any competition between the contractors and therefore without competitive prices.

To justify the ignorance of prevailing European law, the public health insurance companies referred to German social law regulations. According to section 127 para. 2 SGB V it should be possible that public health insurances assign contracts for the supply of medical devices without conducting a public procurement procedure. Each interested company should be able to accede to the concluded contract without the need to compete against each other. The public health insurances insisted on this point of view even after the clear ruling of the European Court of Justice of June this year stating that public health insurance companies are public contracting authorities according to the European Procurement Directives. The landmark decision of yesterday has put an end to this unlawful praxis in breach of European procurement law. The Procurement Review Chamber also ruled that the contracts for the supply of medical devices are public contracts according to section 99 para. 1 and 2 of the Law Against Restraints on Competition. All attempts of the public health insurance companies to deny the medical device contracts´ public character have therefore failed. The Procurement Review Chamber refused the insurances´ argumentation that there was no public contract due to the lack of “exclusivity“ of the contracts. It pointed out that the additional requirement of “exclusivity“ was not prescribed by the EU directives and would therefore unlawfully restrict its scope.

The decision of the Procurement Review Chamber is not final yet. An immediate appeal could still be filed within the next two weeks with the Higher Social Court of North Rhine-Westphalia against it.