EU Ombudsman Seeks Further Inquiry Into Greek Hospital Procurement Case

April 3, 2015

The EU ombudsman is urging the European Commission to reexamine allegations that Greek hospitals violated procurement laws to favor certain suppliers, saying the country has a history of flouting the law.

The complaint was filed in January 2013 by a Greek importer who claimed the country didn’t ensure that its hospital procurement procedures follow EU law after hospitals refused to buy its CE-marked suture devices. The importer also accused the Commission of failing to force Greece to comply.

Not only did hospitals not change their practices, but they put in place additional specifications that allowed them to continue to favor their preferred supplier, the complainant alleged. The preferred supplier, a large multinational company, held a near-monopoly on sales to Greek hospitals, according to a draft recommendation issued March 26. When the importer filed injunctions against calls for tenders that included those specifications, Greek officials increased the fees for filing an injunction.

The Commission concluded that Greece was in compliance with EU law and, in July 2014, the ombudsman proposed a “friendly solution” to the matter, asking the Commission to reexamine the complaint file concerning Greece’s compliance with EU procurement legislation for medical devices.

The Commission responded that it could not continually monitor the way member states apply EU law or keep complaints open indefinitely, the ombudsman says.

Further Sanctions

In her draft recommendation, Ombudsman Emily O’Reilly faults the Commission for failing to fully examine the complainant’s allegations, which she says are well-reasoned and substantiated.

If the Commission considers the evidence insufficient, “it should act upon the complainant’s offer to provide clarifications and additional information,” she says. If infringement of EU procurement laws is found, the Commission should consider referring Greece back to the EU Court of Justice for further sanctions, the ombudsman says, citing a 2006 decision involving the same issues.

The Commission has until June 30 to issue a detailed opinion explaining how it will implement the recommendation.

Erik Vollebregt, with Axon law firm in the Netherlands, says the case is reminiscent of procurement fraud in earlier Commission investigations into general healthcare corruption. The supplier has two options in addressing such situations: challenge the hospital’s decision via EU procurement law or sue for fraud.

Using procurement law can be tricky, however, “because there is no way to make the hospital comply if it really doesn’t want to,” Vollebregt says, which may drive suppliers in this situation to file fraud claims.

View the draft recommendation at www.fdanews.com/04-06-15-greece.pdf. — Elizabeth Orr