Gifts and advantages in public procurement procedure: New FAMHP Circular

The Belgian Federal Agency for Medicines and Health Products (FAMHP) has recently issued an administrative circular clarifying the conditions in which healthcare institutions may request and companies may provide gifts, advantages and benefits in the context of public tenders taking place in Belgium.

The Circular (no. 646, dated 21 June 2019) is available on the FAMHP website since 28 June, in Dutch and French languages. It follows an earlier opinion of the Belgian Commission for Public Tenders on the same subject1 and provides useful guidance to both pharmaceutical and medical devices companies bidding for healthcare tenders in Belgium, and institutions awarding such contracts.

Guidance

The Circular does not make legal or administrative changes to the way public tenders are regulated in Belgium. However, it clarifies the FAMHP services’ position on (i) compliance with anti-gift rules2 in the context of public tenders and some public procurement principles3 such as inter alia (ii) the correlation between awarding criteria and the object of tenders and (iii) (un)equal access to procurement procedures.

(i) It is illegal to request or provide undue gits or benefits when medicinal products / medical devices are being supplied, prescribed, delivered or administered4.

If additional materials or services (eg training sessions on the use of the product, educational materials or software tools) are requested or provided in the context of the tender, they should be: (a) included in the price of the product that is the object of the tender or (b) separately invoiced (in which case bidding companies should, for instance, be able to include the price(s) of all such materials or services in the pricing section or one of the annexes of the offer).

(ii) Awarding criteria should always be linked to the object of the tender5.

For instance, invitations of healthcare professionals to a congress or a training course should be closely linked to the purchase of the product, as defined in the object of the tender. The option of requesting or providing additional equipment or software on top of the medicinal products or medical devices that are the object of the tender should also be carefully assessed in view of this principle. The Circular makes it key for contracting authorities to cautiously define the object of their tenders and awarding criteria to ensure consistency and avoid purchasing unrelated materials or services or requesting any sort of (unconditional) grants or funds.

(iii) Requesting companies to meet technical specifications should not lead to unequal access to public procurement procedures 6. The applicable awarding criteria should guarantee free competition and cannot lead to an unrestricted freedom of choice for the contracting authority.

The above requirements on awarding criteria and technical specifications should be assessed on a case-by-case basis taking into consideration various elements such as, for instance, the narrowness of the technical specifications; the number of economic operators which are prevented from participating in the tender (and could therefore be discriminated); the related awarding criteria and their value/importance in the total amount points; and the specifications clarifying the contracting authority’s expectations on each of those awarding criteria.

Points of attention

  • Using the Q&A round during the tender procedure - Companies aware of infringements to the anti-gift principles (outlined in (i) above) may raise the issue before the contracting authority during the procurement procedure. For bidders participating in a procurement procedure, it is important to identify such anti-gift issues in the tender documents in due time and make use of the Q&A round to raise them before the contracting authority, with a view to clearing (illegal) technical specifications and/or awarding criteria before the submission deadline.

  • Complaint procedure - Anyone may also file a complaint in writing with the FAMHP Contact Point, on an anonymous basis if they so wish7. The anti-gift principles mentioned above do not only apply to those promising, offering and granting undue advantages or benefits (eg manufacturers of medicinal products or distributors of medical devices) but also those requesting or accepting them (eg hospitals, foundations or care homes).

    As part of the complaint procedure before the FAMHP, evidence of material elements is required (eg invoices, email exchanges or tender documentation where the contracting authority would seek to obtain products for free or to obtain illegal advantages).

  • Sanctions - Sanctions in case of infringement of the anti-gift rules8 include fines varying between €1,600 and €120,000 and/or an imprisonment sentence between one month to one year, the Circular recalls. Note that these sanctions are not applicable to legal entities (companies), to whom a higher threshold applies (fines between €4,000 and €240,000)9.

    All such convictions are entered in the person’s or the entity’s criminal records, thereby possibly precluding their access to future public tenders for a period of up to five years.

  • Competence - Whereas the FAMHP is empowered by law to enforce, monitor and control local anti-gift rules, it does not have jurisdiction to enforce or interpret the public procurement legislation applicable in Belgium. The Chancellery of the Prime Minister can interpret and provide guidance on the public procurement legislation. The Belgian courts have jurisdiction to take binding decisions based on both pieces of legislation.

    Under Belgian law, pharmaceutical and medical devices companies have no recourse before the FAMHP to complain about, or denounce, breaches of procurement rules, such as, unfair technical selection and/or awarding criteria and a lack of transparency or equal access by the contracting authority during a tender procedure. This is the exclusive right of the judicial or administrative courts10. Whilst the FAMHP’s interpretation of the public procurement regulation (see (ii) and (iii) above) is an interesting one, the FAMHP does not have control over the conduct of a tender process unless the issues or complaints arise from its realm of expertise (eg interactions with healthcare professionals and hospitals, but also product safety, quality or (pharmaco)vigilance), as defined by the law11.

1 Belgian Commission for Public Tenders, Opinion on the compatibility of gifts and advantages as awarding criteria, 05 March 2019 (Dutch, French)
2 Article 10 of the Medicines Act of 25 March 1964, also applicable to medical devices
3 Including the Public Procurement Act of 17 June 2016 and related royal decrees
4 Article 10 of the Medicines Act of 25 March 1964, also applicable to medical devices
5 In accordance with article 81, paragraph 2, 3° and paragraph 3, sub paragraph 1, of the Public Procurement Act of 17 June 2016
6 Article 53, paragraph 2, of the Public Procurement Act of 17 June 2016
7 Royal Decree of 10 June 2006 establishing and laying down the conditions of operation the FAMHP Contact Point
8  Article 10 of the Medicines Act of 25 March 1964, also applicable to medical devices
9  Article 41bis of the Belgian Criminal Code
10 Depending on the type of hospital/healthcare institution (public or private) either the Tribunal of first instance or the Council of State will be the competent court
11 Act of 20 July 2006 establishing and regulating the operation of the Federal Agency for Medicines and Health Products

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.