FSA Arbitration Board: Stricter Requirements for the Support of Training Events by Member Companies

A decision by the Arbitration Board of the German Association for Voluntary Self-Regulation of the Pharmaceutical Industry (FSA) dated 13 March 2023 (Ref.: 2022.8-667-672, 674) concerns the sponsoring of external training events and the assessment of the existence of an "incentive effect”, which overturns the previous ruling practice of the FSA.

The Arbitration Board of the FSA dealt with the sponsorship of a training event for urologists that took place during the so-called "Gäubodenvolksfest” in Straubing, the second largest folk festival in Bavaria. The member companies were accused of not complying with Section 12a. of the Board Guidelines of the FSA Code of Conduct for Professionals for the training event they sponsored in Straubing. The member companies defended themselves against this and argued that the event lacked an incentive effect, as there was no opportunity for leisure time and therefore no opportunity to participate in the "Gäubodenvolksfest” during the event, which is why the complaint was unfounded.

On 13 March 2023 (Ref.: 2022.8-667-672, 674), the FSA Arbitration Board ruled that the "Gäubodenvolksfest” had a formative incentive effect for Straubing as a conference venue and the sponsoring was therefore a violation of Section 20 para. 5 sentence 4 in conjunction with para. 3 sentence 2 FSA Code of Professional Conduct and Section 12a. of the Board Guidelines. According to Section 12a.2 of the Board Guidelines, the view of third parties, i.e. the "general public”, and no longer that of the invited training participants is decisive for the assessment of whether there is an incentive effect. In the opinion of the FSA Arbitration Board, the city of Straubing has an incentive effect during the "Gäubodenvolksfest”, as the location is then characterised by special experience opportunities. This is the result of a combination of numerous factors such as the size, duration and attractiveness of the event for the population. It is irrelevant whether the experience opportunity is well-known, as the decisive factor is a high level of attractiveness from the point of view of the general public. Similarly, the public festival does not have to correspond to the "Oktoberfest” or Cologne Carnival mentioned in Guideline 12.a.1 (ii) in terms of theme, number of visitors or duration, as the decisive factor is that the festival attracts visitors from many regions who do not come from the surrounding area. Actual possibility of participation is not a prerequisite for the existence of a breach of the FSA Code for Professionals. The previous ruling practice, according to which the extension of the stay for a festival visit does not provide an additional, unobjective incentive, can no longer be upheld without restriction. An "abstract incentive effect” is sufficient for an offence. With this decision, the Arbitration Board has adopted a strict interpretation of Section 12a. of the Guidelines, which is why FSA member companies will have to analyse training events that they wish to sponsor even more closely in future. In particular, the venue and its surroundings must be examined with regard to an abstract incentive effect, whereby temporary cultural events must be taken into account.