New intervention powers of public authorities for obtaining urgently needed medical products

The federal government and the federal states of Bavaria and North Rhine-Westphalia are giving their public authorities additional intervention powers to procure urgently needed medical products such as protective equipment if necessary, thereby securing the supply of materials. These include powers that make it easier to locate and requisition such goods, in particular reporting obligations, sales bans, seizures and obligations to surrender such goods. The application and handling of the new powers is unclear and is creating some uncertainty in the economy. Legal doubts are also justified.

Epidemics Act comes into force in North Rhine-Westphalia, use of new powers unclear

After a lengthy negotiation process, the state parliament of North Rhine-Westphalia adopted its “Epidemics Act” this week. In addition, the state parliament established an epidemic situation of state-wide significance, which is required for the application of the powers under the Epidemics Act. Previously, the state government had been subject to fierce criticism due to the planned powers, especially with regard to the possibility of medical staff being forced to work, and had to water the legislation down.

The legislative package includes North Rhine-Westphalia’s own Infection Protection and Powers Act. This, among other things, gives the federal state authorities the power to secure medical protective equipment, prohibit the sale of such products and oblige persons in the federal state to report their stocks of such goods; the competent authorities can also oblige owners and holders of such goods to hand them over to the federal state or to medical institutions at the market price that applied before the infection occurred. Goods for personal consumption are not covered by these regulations. Whether and to what extent the state government in North Rhine-Westphalia will use these powers is currently unclear.

Extensive powers also created in Bavaria, but not in use

North Rhine-Westphalia’s Epidemics Act is essentially based on the new Bavarian Infection Protection Act, which has been in force since 27 March and provides for corresponding powers: confiscation powers, reporting obligations, bans on sale, obligations to hand over products to the federal state in the event of a health emergency. 

So far, the Bavarian state government has not yet declared a health emergency, in contrast to North Rhine-Westphalia, which has declared an epidemic situation of state-wide significance. According to its own statements, the Bavarian state government has not created the new regulations in order to use them immediately, but to be prepared for a dramatic deterioration in the healthcare situation in view of any significant increase in new infections in Bavaria. It is therefore not to be expected that the new powers under the Bavarian Infection Protection Act will be applied in the near future.

Federal governmental also has new powers, regulation being prepared

The federal government also wants to use new regulations to improve its ability to procure materials during the coronavirus pandemic. The German Act for the Protection of the Population in the Event of an Epidemic Situation of National Significance already came into force on 28 March. Among other things, it amends the federal government’s powers in the German Infection Protection Act. As a core element, the amendment contains powers to issue regulations for the Federal Ministry of Health (section 5(2) nos. 3, 4, 7 and 8 German Infection Protection Act).

Section 5(2) no. 4 German Infection Protection Act is of particular interest. According to this, the Federal Ministry of Health is authorised to take measures to ensure the supply of, among other things, drugs, medical devices, protective equipment and disinfectants by means of statutory regulation. The measures which are possible according to this, which are listed in the catalogue contained in section 5(2) no. 4 a) to g) German Infection Protection Act, are extremely broadly defined. In particular, they include measures for the procurement and securing of the aforementioned products (c), d)), regulations on reporting and notification obligations (c)), sales bans and regulations on sales, pricing, reimbursement and remuneration (e), f)) as well as measures for the maintenance, conversion, opening or closure of production facilities (g)). Even possible expropriatory measures are provided for (d)).

A statutory regulation is currently being prepared, which will primarily deal with regulations on the supply of medicines (the SARS-CoV-2 Medicines Supply Regulation). However, section 8 of the draft bill to this effect also contains a practically hidden ban on sales and obligations. The regulation authorises the Federal Ministry of Health to monitor the market for medical supplies. According to the draft this includes both medicinal products and personal protective equipment items and disinfection products. The market surveillance also authorises the Ministry to issue a ban on the sale of such products, to introduce notification requirements and to oblige persons to sell such goods to the federal government, the federal states, local authorities or others at the price that the product had before the epidemic was identified. It is unclear when and in what form the regulation will be adopted.

Certain doubts regarding the legality of individual regulations  

However, legal doubts about individual powers under the new regulations in Bavaria, North Rhine-Westphalia and the German Infection Protection Act of the federal government are justified. On the one hand, this applies with regard to the requirements that the state regulations place on the use of the new powers. Since confiscation/seizure, sales bans, reporting obligations and obligations to hand over medical goods to the state are far-reaching restrictions of basic rights (Article 12(1), Article 14(1) Basic Law for the Federal Republic of Germany (German constitution) with expropriating effect in some cases (Article 14(3) Basic Law for the Federal Republic of Germany), high demands must be placed on proportionality, in particular the necessity of such restrictions. It does not appear to be certain in all respects that the new powers take these requirements into account. The regulations on price determination in particular are also subject to doubts. 

On the other hand, section 5(2) no. 4 German Infection Protection Act contains an extremely broad and at the same time not very specific formulation of the power to issue regulations. It would require more detailed examination whether the power to issue regulations meets the special constitutional requirements (Article 80(1) Basic Law for the Federal Republic of Germany).

The Scientific Service of the Bundestag also has doubts about the legislative competence of the federal states to create federal state legislative powers in the field of infection control.

It remains to be seen whether and to what extent the new regulations are used at all and subsequently also put to the test. 

We will keep you up to date.