Ministry of Health ‘carefully considering’ High Court decision on pharmacy ownership

Countdown and the Ministry of Health are reviewing the ruling that Countdown Pharmacy’s corporate ownership structure is unlawful but are not yet saying whether they will appeal.

In her decision in New Zealand Independent Community Pharmacy Group vs Te Whatu Ora – released yesterday – Justice Cheryl Gwyn ordered that licences issued by the ministry to two Countdown pharmacies be quashed.

Justice Gwyn ruled Countdown Pharmacy’s ownership structure did not satisfy the legal requirement that a pharmacist owner have effective control of their pharmacy.

In Countdown pharmacies, pharmacist owners hold more than 51 per cent of shares in their entity but cannot make changes without approval from corporate shareholder Countdown.

The court’s decision potentially affects other pharmacy groups with ownership structures similar to Countdown Pharmacy’s.

The parties involved in the case, heard in the High Court at Wellington, have four weeks to make submissions before Justice Gwyn’s order comes into force.

Pharmacy Today asked the ministry whether it would appeal and received a statement from chief legal advisor Phil Knipe saying: “Manatū Hauora – Ministry of Health acknowledges the judgment of the High Court, and is carefully considering the court’s decision.

“Manatū Hauora notes the legal and operational implications relating to the administration of the ‘effective control’ aspects of pharmacy ownership within the Medicines Act 1981, and the potential implications for holders of licences to operate pharmacy.”

Meanwhile, Countdown’s head pharmacist Jeremy Armes says Countdown is reviewing the decision.

“The approach taken by the Ministry of Health and Te Whatu Ora in relation to licensing has been in place since 2008,” Mr Armes says in an emailed statement.

“We will work closely with the ministry and Te Whatu Ora to make sure we comply with any changes it decides to make to its licensing approach in light of the court's decision. In the meantime, it’s business as usual for our pharmacies and customers.”

The Pharmacy Guild was an interested party supporting the Independent Community Pharmacy Group (ICPG) in its case.

Guild chief executive Andrew Gaudin says: “We welcome this decision and were pleased to see repeated acknowledgement of the evidence presented by counsel for the guild in the Judge’s decision.”

In an emailed statement, Mr Gaudin says: “Given the significant financial investment and expertise we brought to the case, it’s great to know the important role our evidence had on this positive outcome for the community pharmacy sector.

“While ICPG and the guild were not successful on the other matters raised in the case, we hope members are satisfied that we made the right decision in joining the case and represented their interests effectively.”