The Brothers of Mercy

State Orders Investigation into Allegations by Financial Regulatory Authority

Medications are alleged to have been internally billed at inflated prices.(Bild: APA/BARBARA GINDL)

The Order of the Brothers of Mercy is alleged to have internally resold medications at inflated prices. For example, an antibiotic purchased in Linz for 19.49 euros is said to have been resold to the hospital on Seilerstätte for more than ten times that amount. The Order denies the allegations; the State of Upper Austria has called in the Financial Supervisory Authority.

“I take these allegations very seriously. As soon as we in the Department of Health became aware of them, we immediately commissioned the Financial Supervisory Authority to conduct an investigation,” said Deputy Governor Christine Haberlander (ÖVP) after the allegations against the Brothers of Mercy came to light. 

Serious Allegations
According to an investigation by the German news magazine “Spiegel,” the Catholic Order of the Brothers of Mercy is alleged to have charged its own hospitals for medications at prices that in some cases included enormous markups. This may have artificially inflated the hospitals’ operating losses—and thus also the payments made by the public sector. The presumption of innocence applies.

An example from Linz
An example from Linz: According to internal documents, a simple antibiotic was purchased for an average of 19.49 euros and resold to the Deaconesses’ Clinic on Weißenwolffstraße in Linz for 24.15 euros. The order’s own hospital on Seilerstätte, however, had to pay more than ten times that amount—a whopping 241.25 euros—for the same medication.

Order Denies Allegations
The Brothers of Mercy deny the allegations and emphasize that the transfer prices for their own hospital by no means represent pure medication costs. Rather, they include medication preparation, pharmaceutical care during rounds, and personnel costs.

Room for Improvement
In a press release, however, Peter Ausweger, CEO of the Barmherzige Brüder, acknowledges room for improvement: Invoicing at all locations is to become more transparent retroactively for the entire year 2026—the separation of the various cost components for medications is to be “clearly evident.”

“No Compromises”
Haberlander concluded: “With allegations like these, full transparency and a thorough investigation are required. Should the allegations be confirmed, there must, of course, be appropriate consequences. There can be no compromises here.”