Provision of medical aids: Anti-competitive price coordination stopped following Bundeskartellamt proceeding

The anti-competitive coordination of prices in the supply of medical aids by the Working Group of Associations of Suppliers of Medical Aids (“Arbeitsgemeinschaft von Hilfsmittelverbänden”, ARGE) has been terminated. This is the result of a proceeding the Bundeskartellamt conducted on account of coordinated price increases to the detriment of the statutory health insurance companies against the ARGE members, that is against the following associations of suppliers of medical aids: Sanitätshaus Aktuell AG, EGROH, rehaVital, Reha-Service-Ring, Cura-San and Bundesinnungsverband Orthopädietechnik. 

Andreas Mundt, President of the Bundeskartellamt: “Suppliers of medical aids are allowed to cooperate. However, the purpose of ARGE was to more or less eliminate price competition at the expense of health insurance companies. With our proceeding we quickly put a stop to this practice. This sends a clear signal to the medical aid sector, which has already been effective and will also be important in the future: Negotiations conducted by working groups or associations on the supply and demand side are required for an efficient supply and are provided for by law. If, however, price competition is de facto eliminated by coordinated conduct, in this case even at the highest level of associations, a red line is crossed.”

Suppliers of medical aids, such as health care supply stores, orthopaedic technicians and others, are allowed to form national associations to collectively negotiate with health insurance companies regarding the provision of medical aids to patients. Only in this way can suppliers of medical aids ensure that all patients are supplied throughout Germany. The associations of suppliers of medical aids were organised as “ARGE”.  ARGE represents around 80 per cent of all outlets supplying technical aids for rehabilitation in Germany. In the negotiations between ARGE and the health insurance companies ARGE thus acted as a quasi-monopolist.  At least from September 2021 the ARGE members had called for uniform price increases for medical aids within the framework of existing supply contracts with the health insurance companies. In many cases they were able to enforce the price increases. The reason the health insurance companies were given for the increases was that the Covid-19 pandemic had had cost-relevant effects (increased freight, shipping and raw material costs). In March 2022 the Bundeskartellamt had initiated a cartel administrative proceeding against these practices, and in January 2023 it had sent a statement of objections to the ARGE members (see press releases of 23 March 2022, 25 January 2023).

Although cooperation in the supply of medical aids is possible under the law, the line drawn by competition law is definitely crossed when all relevant associations join forces or cooperate to an extent which almost completely eliminates competition. Even unforeseen cost increases do not justify the attempt to enforce general price increases through supply monopolies. The ARGE members had imposed price increases on the health insurance companies for practically all products and services offered, without providing a calculation related to the product-specific cost increases.

After the Bundeskartellamt had objected to this practice, the parties refrained from entering into a legal dispute about the scope of competition law and dissolved ARGE. The contracts concerned have meanwhile been terminated or cancelled, and the parties have agreed not to engage in the practices objected to in the future. The Bundeskartellamt accepted the commitments proposed by the parties and declared them binding in a decision pursuant to Section 32b of the German Competition Act (Gesetz gegen Wettbewerbsbeschränkungen – GWB) (Commitments), so that the proceeding is now concluded.