All above board


Audit of pharmacy ownership arrangements fails to find signs of unlawful behaviour 

Pharmacy ownership audits conducted by the Victorian Pharmacy Authority in 2020 failed to find any evidence of unlawful arrangements, the VPA says in its latest circular.

The VPA recently released results of its 2020 (second year) audits. During the year, it conducted forty-five ownership audits and one financial audit.

“These audits have not detected any unlawful ownership,” the VPA said.

The Authority had received the final reports on a further 6 financial audits in the first quarter of 2021. These have also been assessed as compliant.

In total, the VPA has completed eighty out of the 101 ownership audits that were selected in 2019. The remaining audits were planned for completion by 30 June 2021.

“A major barrier to progress in 2020 has been delays caused by the coronavirus pandemic,” the VPA said.

“Licensees were given ample time to respond to audits with due consideration for the challenges presented by sustained lockdowns. Delays also occurred as Authority staff adjusted to a different working environment during the pandemic.

Further, financial audits can take at least 6 months to complete depending on the volume and complexity of information undergoing assessment and the cooperation of licensees,” the VPA said in its latest circular.

In its previous analysis of the first year of audits (2019), the VPA had said it “did not identify any cases of silent or undeclared ownership”.

However, “the two completed financial audits identified one case in which profits were distributed via a trust to family members who were not eligible to have a proprietary interest.

Additionally, the Authority’s parallel franchise agreement review program has found extensive evidence that franchise agreements and other complex commercial arrangements provide for third parties to exert control or undue influence over pharmacy businesses”.

The VPA also said that a “major barrier to progress has been delays caused by licensees failing to provide information in a timely manner”.

The Authority has revised the annual target to 40 ownership audits for 2021, including at least 10 financial audits.

“We will continue to audit pharmacy business ownership and commercial arrangements, implement
program improvements, and undertake further detailed legal reviews of franchise agreements to
ensure compliance with the ownership and undue influence provisions of the Act,” the VPA said in its annual report.

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5 Comments

  1. Ex-Pharmacist
    02/07/2021

    Why are these audits only done in Victoria by the Victorian Pharmacy Authority?
    What is the equivalent authority in other states and territories?
    Can only conclude it is a ‘free-for-all’ everywhere except Victoria.

  2. Paul Sapardanis
    03/07/2021

    So this obviously means that ALL current franchises in Victoria are compliant so if a new player wants to enter then just follow the precedent set. Simple.

  3. Sean
    14/07/2021

    Now do an audit of how many banner groups and discount pharmacy chains use the threat of financial penalties to force these “above board” pharmacy owners to implement policies that aren’t in the patients’ best interests

    EDIT:
    Actually I misread this part, it seems like that is something they’re doing:
    Additionally, the Authority’s parallel franchise agreement review program has found extensive evidence that franchise agreements and other complex commercial arrangements provide for third parties to exert control or undue influence over pharmacy businesses

    • Paul Sapardanis
      14/07/2021

      What like the head office receiving rebates from suppliers. Let them finish there coffee and donuts first

      • Sean
        14/07/2021

        Head office would never twist the arm of their community pharmacists until they started upselling garbage CAMs and performing bogus MedsChecks, as that would violate standard 1.5.4 of the coveted National Competency Standards. Even if they tried, the professional organisations would surely never let them get away with it. I’m proud of my industry!

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