Warwick Smith/Stuff
Many Countdown supermarkets now contain a pharmacy.
The High Court has ruled Countdown pharmacies have been operating unlawfully because the Ministry of Health granted licences that were invalid.
The New Zealand Independent Community Pharmacy Group (ICPG), a group of community pharmacists, submitted a request for a judicial review of the decision by the Ministry of Health to issue licences to RX8, a company associated with Countdown Supermarkets, to operate pharmacies in supermarkets.
The ICPG particularly took issue with the licences approved by the ministry for Countdown pharmacies in Wainuiomata, Gisborne, Penrose and Grey Lynn in Auckland, and Nelson.
But there are 42 pharmacies operating within Countdown stores in New Zealand. The pharmacies are operated by entities within the Woolworths New Zealand group of companies, including RX8.
Under the Medicines Act any company granted a licence to operate a pharmacy must be majority-owned by pharmacists. The pharmacist shareholders must have “effective control” of the company,
Each Countdown Pharmacy is run by two directors – one a pharmacist director and the other a corporate, each meant to have equal control.
Breakfast
First Union says it’s a promising sign for Fair Pay Agreements in the supermarket sector.
But the ICPG argued this was not the case and the pharmacy director could be overruled by the other.
Both the Ministry and RX8 relied on the concept of “negative control” which they said was sufficient to establish effective control – in which the pharmacist could block the decisions of the other director.
The ministry argued it had been applying the negative control test for pharmacy licences since 2008.
But Justice Cheryl Gwyn of the Wellington High Court ruled pharmacist control could not be jointly held with non-pharmacists and control by a pharmacist that was shared with a non-pharmacist would not be “effective control”, as required by the Act.
KEVIN STENT/Stuff
Countdown has 42 pharmacies operating in its stores.
“I conclude that the licences granted by the Ministry of Health to RX8 to operate the Countdown pharmacies were unlawful and invalid and an order should be made to set aside those licences,” she said.
She said she acknowledged the decision would have a significant impact on RX8 and potentially other pharmacy-operating companies, as well as the Ministry of Health.
“Given that, it is appropriate that the date on which the quashing order comes into force be deferred, to enable RX8 to consider its position and confer with the ministry, and for the ministry to consider the potential impact of this decision on any other licence-holders.”
She said submissions on when the quashing order should take effect should be filed within four weeks.
Countdown has been approached for comment.
ICPG said it was a “David and Goliath victory for us independent community pharmacists”.