Opening hours key to pharmacy approval case

The Federal Court has ruled that an appeal should be allowed in this ongoing stoush between two NSW South Coast pharmacies, which are just 150 metres away from each other

A pharmacy’s appeal has been upheld in the Federal Court, with debate over its application for approval sent back to the primary judge for review.

On 30 March 2017, Vincentia MC Pharmacy applied for approval to supply pharmaceutical benefits from premises at the Vincentia Medical Centre on the South Coast of NSW. The medical centre is located around 150 metres from another pharmacy, Choice Pharmacy Vincentia, which has been there since December 2015.

The Australian Community Pharmacy Authority was satisfied that each of the requirements for proposed premises were met and recommended that MC Pharmacy’s application be approved.

MC Pharmacy commenced operating at the premises on 1 November 2017 and supplying pharmaceutical benefits on 4 December 2017 following approval by the Secretary of the Department of Health on the same day.

Earlier this year, Choice Pharmacy brought the case against Vincentia MC Pharmacy, seeking judicial review of the Authority’s decision and orders quashing both the Authority’s recommendation and the Secretary’s approval.

Under Item 136 of the 2011 Rules, a “large medical centre” is defined as one that operates for at least 70 hours each week, and has one or more prescribing medical practitioners for at least 70 hours each week.

Choice Pharmacy contended that the medical centre in question did not in fact operate for 70 hours each week.

MC Pharmacy conceded that the rosters in evidence before the Authority established that the medical centre was not open on public holidays between 30 January 2017 and the first week of June 2017, including Easter and Anzac Day. As such, MC Pharmacy conceded that in the weeks on which those public holidays fell, fewer than 70 hours were worked at the medical centre.

Earlier this year, a Federal Court judge found that the Explanatory Statements to the 2009 and 2011 Rules revealed features indicating that “at least 70 hours each week” should be read strictly.

The Authority had failed to appreciate the significance of the evidence concerning public holidays, the primary judge said, adding that this was an error of law.

In a subsequent decision, the primary judge made final orders setting aside the recommendation and approval decisions. She remitted the application for approval to the Authority and the Secretary for further consideration according to law, with MC Pharmacy to pay Choice Pharmacy’s costs.

However the Federal Court has now upheld an appeal to that decision. Last week, two of three judges ruled that Choice Pharmacy’s submissions should be rejected on that basis that the primary judge erred in her construction of “large medical centre”.

They said the Explanatory Statement explained that item 136(6) of the 2011 Rules was intended “to ensure that, as far as is practicable, a majority of patients can access the pharmacy following a consultation by a doctor in that medical centre”.

“A pharmacy will still, generally speaking, be open for the extended hours thereby facilitating timely and convenient access to the supply of pharmaceutical benefits by patients of the medical centre attending during extended hours, even if exceptions are made for weeks in which one or more public holidays fall,” they ruled.

“The same cannot, with respect, be said of the primary judge’s construction that a medical centre is not a ‘large medical centre’ merely because it is closed for some or all public holidays declared under, or prescribed by, Commonwealth, State or Territory laws as applicable.”

By majority, the Federal Court rejected the primary judge’s construction in favour of arguments by MC Pharmacy and the Authority.

“Contrary to the primary judge’s decision, the decision of the Authority and the Secretary is not tainted by error of law,” the judges stated.

They upheld MC Pharmacy’s appeal of the decision to set aside its recommendation and approval.

Choice Pharmacy was ordered to pay MC Pharmacy’s appeal costs. The matter has now been remitted to the original judge in order to deal with the remaining grounds of judicial review.

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  1. Great article Sheshtyn. Thanks for keeping the community informed.

  2. sylvie comeau-hall

    Tragic outcome. The medical center elected to have a Pharmacy in situ when a Pharmacy is already available 150m away… I presume greed is the motive not service. Nobody wins in this scenario.

    • GlassCeiling

      Yes the medical centre is the bad guy, right! Forget the fact only a pharmacist can own a pharmacy and the existing rules obviously permitted the approval at presentation.

      The location rules serve only the Guild and owners. Location rules are an anchronism that were designed for manual claiming of prescriptions and to reduce administrative burden on the department of human services- a bygone era.

      The rules were a deal brokered by the Guild at the first community pharmacy agreement to keep pharmacist only ownership. At that time pharmacists were limited in number and had lots of choice in their self-employment or employee status. The rules have degraded to corporate ownership over time- the very thing they were designed to prevent. The leadership over the last 30 years have consolidated power among many efforts including legislating pecuniary interest of 5 pharmacies in NSW from 3 in 2003 to serve only themselves to the detriment of the future professionals seeking to earn a comfortable living through ownership. The leadership have supported the exponential growth of pharmacy schools and graduates to service a high supply, low demand and low wage environment.

      When the local multi millionaire pharmacist/s running a corporate structure negotiate with developers or the head office of the wholesaler negotiates on the established wealthy owners behalf for greenfield pharmacy sites what chance do up and coming, lack of silver spoon pharmacists do to negotiate, compete for lease terms and stand on their own two feet? The leadership went so far in response to private pharmacies popping up a a few years ago that it lobbied to strip NDSS from non-NHS approved pharmacies- yes that is right – the leadership was successful in lobbying for a community service to be stripped away in order to consolidate its power by sinking private pharmacy remuneration.

      Pharmacy approvals are not tendered. A pharmacist that is first to apply and meets the basic legal site requirements for approval is in without question as to their personal attendance at the pharmacy, capability, resources, community vision or community health service offer. There is no community benefit when opening hours are not mandated and owners of multiple pharmacies in a region can gouge prices to the detriment of the local population – it is happening as cited by the King Review of Remuneration and Location Rules. Community oriented pharmacists are prevented from competing and offering a superior service due to illogical rules preventing the practice of a subsidised health profession near another.

      Location rules are controlled by medical centre operators and shopping centre developers. The legislation gives medical centre and shopping centre owners the right to have a pharmacy premise while pharmacists that have worked and studied to practice the profession have no right to a premise. Prices are high per sqm lease and relationships consolidate ownership to a few people with the right contacts.

      Many owners are investors and many are making millions (yes millions) to the detriment of the 25-35 dollar/hr non-owner slaves in their employ. Many employee pharmacists see their owner pharmacists a couple times a year if at all. All the while cries of ownership doing it tough resound while the leadership acts to suppress pharmacist wages at industrial relations tribunals.

      Centralised electronic prescription uploads to the health servers and electronic payment negate the need for these ridiculous location rules. As long as these rules are in place Australian community health will not reach potential. The rules suppress innovation and leadership efforts to maintain the status quo by preventing alternate revenue sources outside their brick and mortar network suppress professional advancement. The only reason big box pharmacies are successful is that employee pharmacists have such limited employment choice. Should location rule abolition become a reality would you work as a low paid employee or go it alone or with friends?

      Rural pharmacies will not be affected . Rural incentives will always exist. In fact incentives may be wound back when people want to practice in their home town and we have more than one pharmacy operational in one pharmacy towns.

      The system is broken – contact your local federal politician- demand the removal of these ‘location rules ‘ and institute rules that enhance health professional presence in the community. Let’s call them ‘ health enhancement and community service ‘ rules. Let’s take control out of the hands of the privileged few through a staged and managed approach and give it to those existing hands on owners and the many pharmacists that genuinely want to make a difference and get a fair go.

      • Paul Sapardanis

        In your post you state that prices in certain locations constitute gouging. Wrong. Maximum PBS price payable occurs in all PBS prescriptions. There is a ceiling price on all PBS prescriptions. There isn’t a floor price though which makes the system broken. The failure of the relevant state regulators to ensure that ownership rules are maintained is NOT the fault of the guild and it is unfair to blame them

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