Independent pharmacists register victory over Clicks community pharmacies
The Independent Community Pharmacy Association on Wednesday registered a victory in its long-running complaint to the health department against Clicks community pharmacies.
The high court in Cape Town declared that the Clicks Group, New Clicks SA, Unicorn Pharmaceuticals, Clicks Investments and Clicks Retailers contravened section 22A of the Pharmacy Act, read with Regulation 6 of the Act.
In terms of the act and the regulation, an entity having a beneficial interest in a community pharmacy is prohibited from being the holder of a direct or indirect beneficial interest in a manufacturing pharmacy.
In 2016, the association — which represents members comprising more than 1,000 independently-owned pharmacies — lodged a complaint with the department of health, claiming that Unicorn Pharmaceuticals and Clicks Retailers were contravening provisions of the act.
The complaint was dismissed by the department of health deputy director-general on January 19, 2017. The association's appeal to the chairperson of the appeal committee was dismissed on January 15, 2018.
The association then went to court asking for an order reviewing and setting aside both the decision of the DDG and the decision of the chair of the appeal committee.
The Clicks Groups is a 100% shareholder of New Clicks SA. New Clicks owns all the shares of both Unicorn Pharmaceuticals and Clicks Investments.
Clicks Investments holds all the shares of Clicks Retailers.
Unicorn owns a manufacturing pharmacy while Clicks Retailers owns and operates about 470 community pharmacies with 1,830 pharmacists, 1,430 pharmacy assistants and 315 nursing practitioners.
In his judgment, Acting Judge Frederick Sievers said New Clicks was the holder of a beneficial interest in a manufacturing pharmacy.
“The next question is whether New Clicks is a beneficiary of the juristic person which owns the community pharmacies (Retailers). New Clicks is the sole shareholder of the company (i.e Investments) which holds all the shares of the juristic person which owns the community pharmacies (i.e Retailers).”
Sievers said the regulations recognised that where a community pharmacy was owned by an entity other than pharmacists themselves, it was undesirable for there to be a direct or indirect beneficial interest in both such a community pharmacy and a manufacturing pharmacy.
“An entity having interests in both types of pharmacies would gain financially if the manufacturing pharmacy's products are promoted by the pharmacists in the community pharmacies over others.
“This could result in consumers not getting the best quality product at the best price.”
He said the conflict of interest could also result in the manufacturing pharmacy favouring community pharmacies belonging to the same group above outside or independent pharmacies.
“These dangers are present in the corporate structure of the Clicks entities.”
In his order, Sievers said the issue of sanction in respect of the contravention by Clicks entities will be referred to the DG of health for consideration.
He also ordered that the Clicks entities pay the costs of the association.
In reaction to the judgment Jackie Maimin, CEO of the association said: “We persisted with this argument for years, in order to protect the best interest of the consumer against the financial interest of parties who were acting in contravention of the act and the regulation.”