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Are pharmacy regulators ‘cracking down’ on unregistered financial interests?

by | Dec 18, 2018 | Pharmacy Law

It has come to our attention that the Pharmacy Council of New South Wales (Council) is deferring consideration of applications for approval of change of ownership of pharmacies in certain circumstances.

The Council is apparently taking the view that receipt and retention by franchisors, licensors of intellectual property and buying groups of rebates and incentives from suppliers and not passing them on to individual pharmacy owners give rise to non-pharmacists having a financial interest in pharmacy businesses. Since the amount received in respect of purchases by each individual pharmacy will vary according to the turnover of the pharmacy this is also said to constitute an interest in the profits of the pharmacy business.

Under the Health Practitioner Regulation National Law (National Law) (NSW) – Schedule 5F

  • all holders of a financial interest in a pharmacy business must be registered in the Register of Pharmacies; and
  • a provision in a lease or licence that provides that the lessor or licensor is to receive consideration that varies according to the profits or takings of the business is void.

The Council has also apparently formed the view that a pharmacist who has entered into such an arrangement may be guilty of unsatisfactory professional conduct under the National Law.

The Victorian Pharmacy Authority (VPA) has recently released guidance on pharmacy business commercial arrangements apparently directed at assisting pharmacists and stakeholders to check that their business arrangements comply with the legislation.

The VPA guidelines on commercial arrangements highlight the so called ‘undue influence’ provisions of the Victorian Pharmacy Regulation Act under which any provision of a commercial arrangement that gives any person, other than the person licensed to carry on the pharmacy business, the right to receive any consideration that varies according to the profits or takings of the business is void.

Pharmacists affected by any of the above are invited to share their experiences by way of comment.

Any pharmacist affected by the above who wishes to discuss their particular circumstances is also invited to contact our pharmacy law experts Peter Clinch pclinch@clw.com.au or John Simpson jsimpson@clw.com.au or call us on 02 9279 4888.

Important Disclaimer: The content of this publication is general in nature and for reference purposes only. It is current at the date of publication. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.