Rules for the distribution of products for medical needs

Category: product liability Industry: healthcare Author: Year:
Miriam Schuh

In the "SARS-CoV-2 Medicinal Products Supply Ordinance," (PDF / only in german) the Federal Ministry of Health presents a statutory framework designed to ensure the supply of "products for medical needs" as the epidemic continues.

Products for medical needs

In addition to medicinal products, the Ordinance explicitly states that the term "products for medical needs" includes medical devices, laboratory diagnostics, aids, personal protective equipment and disinfectants. In accordance with the Ordinance, all of these products are subject to a far-reaching "prohibition on sale and commitment."

Prohibition on sale and commitment

This means that manufacturers and distributors of these products are required to provide the Federal Ministry of Health or a notified body designated by the Ministry with information at any time, and without delay, as to their stocks, production, distribution and prices for these products. Manufacturers and distributors of products for medical needs of relevance for supply are required, within the scope of their responsibility and within reasonable bounds, to ensure an adequate and continuous supply of the relevant products so that the needs of the public can be met. The Ordinance states that prices of relevant products for medical needs must generally be based on the cost of supply. This also means that, as far as pricing is concerned, manufacturers and distributors may not charge a premium to consumers. Manufacturers and distributors are also required to take precautions in the sale and distribution of relevant products for medical needs in order to counteract recognizable hoarding and deliberate market shortages as far as possible. The Ordinance contains enforcement provisions which state that those who fail to comply with the above prohibitions have committed an administrative offense.

Conclusion

In other words, the Ordinance imposes substantial restrictions on distribution for manufacturers and distributors of the specified products, creating the risk that these products can no longer be freely distributed according to the customary rules of supply and demand. Particularly with regard to the sale of these products to consumers, manufacturers and distributors will no longer be able to respond to growing demand by charging prices commensurate with the demand for these products. Whether this will contribute to an improvement in the overall supply situation is doubtful, particularly if distributors cease to buy these products due to fear of the potential financial risks.

[Mai 2020]