Court quashes supermarket pharmacy licences

By Frank Neill

Wainuiomata’s two independent chemists, Clive Cannons and Ron Chin have welcomed the “David and Goliath” High Court victory that has quashed Countdown Pharmacy licenses.

Justice Cheryl Gwyn decided to quash five Countdown pharmacy licenses, including in Wainuiomata, following an application to the Court by the New Zealand Independent Community Pharmacy Group (ICPG).

Her judgment in the case, [2023] NZHC 1486, was delivered on 15 June.

Mr Cannons is the ICPG’s Chair.

The ICPG argued in Court that the Ministry of Health had wrongly granted pharmacy licences to Countdown pharmacies in Penrose, Grey Lynn, Wainuiomata, Gisborne and Richmond, because the pharmacies were not “effectively controlled” by pharmacists.

The High Court ruled in the pharmacists’ favour, finding that the law requires that pharmacy companies “serve independent pharmacists and not some outside interest ... to protect public safety” (paragraph 310 of the judgment).

The Court found that Countdown Pharmacy ownership structures, giving pharmacists a veto right over company decisions but no effective control, did not meet the requirements of the legislation.

The Court decided that it was not enough for pharmacists to control only “operational management”, since pharmacy company decisions can have an impact on the health and safety of patients.

The Court case “started here in Wainuiomata,” Mr Cannons says.

“This is ground zero.

“The outcome of the decision goes part way to securing a future where New Zealanders’ health and wellbeing needs are being met by trained health care professionals, not controlled by supermarket managers and grocery business models,” Mr Cannons says.

“Any legislation or policy that risks the independence of pharmacists in favour of non-pharmacist owned and controlled pharmacies risks lower standards of public health.”

The High Court decision, “which is a David and Goliath victory for us independent community pharmacists, reaffirms the importance of patient safety and effective pharmacist control of pharmacies.

“We also want to acknowledge the work and significant support of the Pharmacy Guild throughout the course of this litigation.”

The High Court recognised that the decision would have a “significant impact” on Countdown and “possibly other pharmacy-operating companies, and the Ministry of Health itself”, since Countdown cannot operate pharmacies without a licence, and the Ministry would also need to reconsider its general approach to effective control when issuing licences.

“In particular, although the quashing order relates only to the five Countdown Pharmacies named above, the ICPG understands that all Countdown Pharmacy companies share the same structure, so the Court’s findings apply to all Countdown pharmacies across the country,” Mr Cannons says. Justice Gwyn delayed the quashing of Countdown’s pharmacy licences to give Countdown time to confer with the Ministry of Health and to allow the Ministry to consider “the potential impact of this decision on any other licence holders”.