Pharmacy approval denied

A Federal Court stoush over the approval of pharmacy premises has ended with one applicant being ordered to pay appeal costs to the other

The Federal Court has agreed with a recommendation by the Australian Community Pharmacy Authority that an application for approval to supply pharmaceutical benefits from certain premises not be approved.

In doing so, they overturned the decision of a different judge, who ordered in August to quash the recommendation.

On 19 March this year, the application was first made to establish a new pharmacy at a premises in Flagstone, Queensland.

The proposed premises were located in close proximity to a Coles supermarket within 500m by straight line—one of the requirements for the application.

However this supermarket was reportedly to open from 7am on 21 March—two days after the day on which the application for pharmacy approval was made.

Supporting material included evidence that the Coles supermarket had been “fitted out and stocking and merchandising” had commenced; there were “trucks at the site, presumably to deliver goods, as well as marketing signs, price signs and weighing scales displayed and hanging in the supermarket area”. There was also “evidence of workers arriving at the site”.

However on 26 June 2020, the Authority considered that Item 130 of the Rules for the approval of applications to supply pharmaceutical benefits was not satisfied as “the Coles Supermarket was not trading on the day the application was made”.

It determined that the application not be approved.

The applicant commenced proceedings for judicial review of the Authority’s decision. On 25 August, a Federal Court judge quashed the 26 June decision by the Authority and remitted the application back for consideration.

The primary judge found the definition of a retail store “does not require that, on that day, the retail store must be selling, or that sales must be taking place,” they said (emphasis theirs).

“In the face of the evidence of the commercial activities that the Coles Supermarket was clearly already undertaking, it would have been surprising for the Authority to have found, in an unqualified sense, that the Coles Supermarket ‘was not trading’,” the primary judge ruled.

However a second company, which had made a competing application to the Secretary for approval to establish a new pharmacy in the same suburb, appealed the decision.

In a decision handed down on Monday, the Federal Court allowed the appeal.

“The primary judge’s construction would leave open the possibility that an approval may be granted even though the ‘supermarket’ never ultimately trades, or trades with a gross leasable area less than the prescribed area,” found Honourable Justice Darryl Rangiah.

“The granting of approval in circumstances where a ‘supermarket’ may never open, or open with a smaller area than anticipated, would be inconsistent with the objects of a sustainable and viable network of community pharmacies and access of consumers to pharmaceutical benefits. Such consequences are unlikely to have been intended,” Justice Rangiah said.

He said Item 130 of the Rules require that a “supermarket” must have commenced trading on or before the day the application was made and before the day the application is considered by the Authority.

“It follows that the Authority was correct to conclude that as the Coles Supermarket had not commenced trading on or before the day on which the application was made, Item 130(b) of the Rules was not met because there was not ‘at all relevant times…a supermarket’,” he said.

The Court ordered the appeal “must be allowed”. Orders made on 25 August 2020 quashing the recommendation and remitting the application back to the Authority were set aside.

The initial pharmacy applicant was ordered to pay the appellant’s costs of the appeal.

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