ACT Numbered Regulations - Explanatory Statements ACT Numbered Regulations - Explanatory Statements[Index] [Search] [Download] [Related Items] [Help]
PUBLIC HEALTH (COMMUNITY PHARMACY OWNERSHIP) AMENDMENT REGULATION 2013 (NO 1) (NO 4 OF 2013)
THE LEGISLATIVE ASSEMBLY FOR
THE
AUSTRALIAN CAPITAL
TERRITORY
PUBLIC HEALTH (COMMUNITY
PHARMACY OWNERSHIP)
AMENDMENT
REGULATION 2013 (No 1)
SL2013-4
EXPLANATORY
STATEMENT
Minister for Health
Public Health (Community Pharmacy Ownership)
Amendment Regulation 2013 (No 1)
When the Health Practitioner Regulation National Law
(ACT) 2010 was enacted by the Legislative Assembly it did not contain a
provision that would ensure that pharmacies can only be owned by registered
pharmacists or a complying pharmacy corporation. This was an important and
unintended oversight.
To correct this problematic oversight,
section 13 of the Health Practitioner Regulation National Law
(ACT) 2010 was used to make a Regulation that modified the Health
Practitioner Regulation National Law (ACT) 2010, and consequentially
the Health Act 1993 (the Health Act). The modification made was the
insertion into the Health Act of section 129A, which limited by way of an
offence pharmacy ownership to pharmacists or a complying pharmacy corporations.
Modification of the Health Practitioner Regulation National Law
(ACT) 2010 was authorised by section 13 of the Health
Practitioner Regulation National Law (ACT) 2010. Section 13
provided that a regulation may prescribe transitional matters necessary or
convenient to be prescribed because of the enactment of the Health
Practitioner Regulation National Law (ACT) 2010. Transitional powers
are inserted into legislation where there is some complexity arising from a
reforming Bill. A clause of this nature ensures that any matters that may have
been inadvertently omitted or inadequately dealt with when developing a Bill can
be addressed.
The Health Practitioner Regulation National Law (ACT)
(Transitional Provisions) Regulation 2010 (No 2) was made pursuant to
section 13 of the Health Practitioner Regulation National Law
(ACT) 2010 to modify the Act, and consequentially amend the Health Act.
However, the Health Practitioner Regulation National Law (ACT) (Transitional
Provisions) Regulation 2010 (No 2) is a transitional provision that
had a limited life, and as such expired on 1 July 2012. Subsequently,
section 129A as inserted into the Health Act also expired on
1 July 2012.
The Public Health (Community Pharmacy Ownership)
Amendment Regulation 2012 (No 1) was made under section 138
of the Public Health Act 1997 to permanently preserve the
restriction on pharmacy ownership beyond 1 July 2012. To the extent
possible, section 62 of the Public Health Regulation 2000 reproduced
the offence that was outlined in the section 129A of the Health
Act.
In addition, the Public Health (Community Pharmacy) Risk
Activity Declaration 2012 (No 1) was made under
section 18 of the Public Health Act 1997 declaring the
operation of community pharmacy as a licensable public health risk activity from
1 March 2013. The combined effect of the offence in section 62
of the Public Health Regulation 2000 and the declaration of the operation
of community pharmacy as a licensable public health risk activity is that from
1 March 2013 all owners of community pharmacies in the ACT will
require a licence to operate.
This Regulation has been prepared in
recognition of the fact that a small number of pharmacy corporations that
legitimately and legally owned a community pharmacy prior to
1 July 2010 do not fully comply with the current provisions under
section 128A of the Health Act.
In some cases this is
because it was possible in the ACT prior to 1 July 2010 for
corporation to be registered as a corporate pharmacist. By extension it was
also possible for a corporate pharmacist to be a shareholder of another
corporate pharmacist. It was no longer possible for a corporation to be
registered as a pharmacist after 1 July 2010 when the Pharmacy Board
of Australia took over the registration of pharmacists. Consequently, a
pharmacy corporation that has a former pharmacist corporation as a shareholder
does not comply with the provisions now placed in section 128A of the
Health Act.
The amendments made by this Regulation seek to allow
pharmacy corporations that owned a community pharmacy and through it operated a
pharmacy business prior to 1 July 2010 to be able to continue to do so, subject
to conditions.
Background information
On
26 March 2008, the Council of Australian Governments (COAG)
signed the 2008 Intergovernmental Agreement for a National Registration and
Accreditation Scheme for Health Professions (the Agreement). The objective
of the agreement was to fully implement a national scheme of registration and
accreditation for health professions (the National Scheme) in Australia by
1 July 2010.
In the ACT the final stage was achieved through
the Health Practitioner Regulation National
Law (ACT) Act 2010. The consequential amendment section of
the Health Practitioner Regulation National
Law (ACT) Act 2010 contained amendments to other existing ACT
legislation affected by the reforms; such as the Health Act and Health
Professionals Regulation 2004.
Among the amendments to the Health
Act were provisions about pharmacists and pharmacy premises. The explanatory
statement for the amendments stated the purpose of the amendments that inserted
Part 9 into the Health Act was “to ensure that the status quo
regarding pharmacy premises is maintained”. The intended position was that
in order to protect the wider health of the community that pharmacists have
direct, personal control of the operation of community pharmacies.
It
was later identified that this position was not given full effect. Consequently,
the power in the Health Practitioner Regulation National Law
(ACT) 2010 was used to modify the Health Act to give effect to the
intended position.
A detailed explanation of each clause of the Regulation follows.
The first clause of the Regulation declares that the name of the Regulation
is to be the Public Health (Community Pharmacy Ownership)
Amendment Regulation 2013 (No 1).
Clause 2 provides for the commencement of the Act, which will commence
on the day after its notification.
Due to the operation of
section 75(1) of the Legislation Act 2001 (the Legislation Act)
the naming and commencement provisions of this Regulation, clauses 1 and 2,
commence automatically on the day the Regulation is notified. A note to that
effect is included in the provision.
This provision alerts the reader that this Regulation amends the Public
Health Regulation 2000.
Upon commencement, this Regulation will
alter the Public Health Regulation 2000 in accordance with the provisions
that this Regulation contains. This Regulation will then be immediately
repealed. Consequentially, from the date that this Regulation commences a new
republication of the Public Health Regulation 2000 will be available. That
new republication will feature the alterations made by this Regulation.
In 2012 the Public Health Regulation 2000 was amended by SL2012-30; the
Public Health (Community Pharmacy Ownership) Amendment
Regulation 2021 (No 1). SL2012-30 inserted into the Public
Health Regulation 2000 a new section 62, which makes it an offence for
a person to own a pharmacy unless the person is a pharmacist or a complying
pharmacy corporation.
Clause 4 of this Regulation amends
section 62(1) by adding a paragraph (c). The effect of the new
paragraph is to permit former corporate pharmacists to own a community
pharmacy, in addition to pharmacists and complying pharmacy corporations. The
meaning of the term ‘former corporate pharmacist’ is the
subject of the next clause to this Regulation.
This provision will not
alter the manner in which the offence within section 62 operates. It is
neither a strict liability offence or an absolute liability offence, and does
not displace any defences or rights of a defendant, or place any evidentiary
burden on the defendant. As such, no rights under the Human Rights
Act 2004 are engaged or limited by the amendment to this offence
provision.
Contained with section 62(2) of the Public Health Regulation 2000
are explanations of terms utilised in the offence in the preceding subsection.
The provision already defines what amounts to a pharmacy business and
pharmacy services, as well as directing the reader to section 128A
of the Health Act for the meaning of complying pharmacy
corporation and to the Medicines, Poisons and Therapeutic Goods
Act 2008 for the meaning of medicine and community
pharmacy. The fifth clause of this Regulation inserts into
section 62(2) a definition of a former corporate pharmacist.
On 1 July 2010 Australia moved to a system of national
registration for a range of health professionals, including pharmacists. Prior
to that date however, pharmacists in the ACT were registered under the ACT
Health Professionals Act 2004 by the then ACT Pharmacy Board,
which also permitted companies to be registered as a corporate pharmacist.
The Health Professionals legislation contained criteria that a
corporation was to meet in order to be registered as a corporate pharmacist, but
these criteria had not been strictly or robustly interpreted or applied. As a
result, there are several community pharmacies in the ACT owned by corporations,
or trusts administered by corporations as trustee, that would not meet the
criteria to be able to obtain a licence under the Public Health legislation to
operate a pharmacy business from 1 March 2013 onward.
It would be possible for such corporations to make the necessary
changes to meet the new criteria so as to obtain a licence, but doing so has the
potential to have significant taxation consequences for the shareholders
involved. It is accepted that the incurring of significant taxation liabilities
in order to comply with a recently introduced regulatory arrangement would be an
unreasonable cost burden on affected companies and shareholders. It would also
be undesirable for such a corporation, which previously was legally able to own
a community pharmacy, to now be in breach of section 62 of the Public
Health Regulation despite no real change in command and control or ownership.
To resolve this potential problem former corporate pharmacists that meet
certain criteria will, by virtue of changes made by this Regulation, be
permitted under section 62(1) of the Public Health Regulation to own a
community pharmacy.
For a company to be considered a former corporate
pharmacist several essential criteria must be met, starting with the
requirement that the company actually owned a pharmacy business on
30 June 2010, and has continuously owned and operated the pharmacy
business since that date.
The other requirements to be considered a
former corporate pharmacist are that since 30 June 2010 the
company must have only appointed pharmacists as directors of the corporation,
and must not have allowed persons to become new shareholders of the company
unless those persons are a company pharmacist, or a close relative of a company
pharmacist, and that such persons hold the beneficial ownership of those shares.
Pharmacists that have been appointed as directors of the corporation are
considered company pharmacists, as are any pharmacists employed in the
corporation.
In the event that the corporation practices pharmacy as a
trustee under a trust deed, any new beneficiaries added to the trust deed since
30 June 2010 must only be a company pharmacist, or a close relative of
a company pharmacist. For the purposes of this section, a company pharmacist
includes a pharmacist appointed as a director of the company, or a pharmacist
employed by the company.
A definition of close relative is
contained in the section. The meaning assigned to the term reflects modern
drafting approaches, and is consistent with that used in other ACT legislation,
including the Working with Vulnerable People (Background Checking) Act 2011.
The definition recognises the nature of modern families and relationships.
The meaning of a close relative has been broadened so as to included
step-relationships, such as stepmothers, stepsons and stepsisters. Also
expressly included are half brothers and half sisters, as well as in-laws, such
as a father-in-law, or even uncles and aunts-in-law.
It has long been
the intention that pharmacy businesses are essentially only owned by
pharmacists. Recognising commercial reality, in 2001 the ACT made legislative
amendments that enabled pharmacy businesses to be owned by corporations,
provided the company was essentially owned through its shareholdings by
pharmacists or their close relatives, and that it was governed, through its
directors, by pharmacists.
The framing of this provision recognises that
although this intention has been long standing, its interpretation and
enforcement over the years has been inconsistently applied. As such, this
provision has been constructed so as to allow for some tolerance for companies
that owned a pharmacy business prior to 1 July 2010, which is the date
that national registration of pharmacists commenced, and have thereafter
continuously owned and operated that pharmacy business.
Accordingly, to
be regarded as a former corporate pharmacist since 30 June 2010 the
company must only have appointed pharmacists as directors. What this means is
that in the event that the company had a director prior to
30 June 2010 who is not a pharmacist, that will be acceptable. In
contrast however, if any director appointed on or after 30 June 2010
is not a pharmacist, the company will not meet the definition of a former
corporate pharmacist, and will need to make all necessary changes to meet the
definition of a complying pharmacy corporation in section 128A of the
Health Act before the company will be issue a licence.
Similarly, for a
company to be considered a former corporate pharmacist it must not have allowed
from 30 June 2010 persons to become new shareholders of the company
unless those persons are a company pharmacist, or a close relative of a company
pharmacist, and that such persons hold the beneficial ownership of those shares.
As such, any company that owned a pharmacy business prior to
30 June 2010 which had shareholders that are not pharmacists or close
relatives of a pharmacist will be accepted. However, if the company has
obtained new shareholders since 30 June 2010 the company will not meet
the definition of a former corporate pharmacist if those new shareholders are
not a pharmacist appointed as a director of the company, or a pharmacist
employed by the company.
It should be noted that the restriction
applies only to new shareholders. As such, there is no impediment to any person
that was a shareholder prior to 30 June 2010, even if they are not a
pharmacist or close relative of a pharmacist, from acquiring more shares in the
company after 30 June 2010.
Where a corporation practices
pharmacy as a trustee, it is the trust deed that dictates the functions and
directions of the trust. Again, this Regulation has allowed a measure of
tolerance for trusts and company trustees established prior to
30 June 2010, and to persons that are not a pharmacist, or related to
a pharmacist, being a beneficiary to such a trust. However, should a person that
is not a pharmacist, or related to a pharmacist, be added to a trust deed as a
new beneficiary, that the entire trust deed and the trustee corporation will not
be regarded as a former corporate pharmacist, and all necessary changes
will need to be made in order to meet the definition of a complying pharmacy
corporation in section 128A of the Health Act.