Pharmacies celebrating ‘David and Goliath win’

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Gisborne’s community pharmacies are celebrating after the High Court in Wellington ruled that licences issued to five Countdown pharmacies, including the Gisborne store, are unlawful and invalid and should be quashed.

The Ministry of Health and Countdown have about a month to appeal so the quashing of licences is on hold.

New Zealand Independent Community Pharmacy Group, representing more than 100 pharmacies, sought a judicial review of decisions made by the Ministry of Health and two former health boards — including the former Hauora Tairāwhiti — to grant licences which were not majority-owned by pharmacies based within Countdown supermarkets.

The pharmacy at Gisborne’s Countdown only operated for a short period before closing because pharmacists could not be recruited.

The independent pharmacies claimed the five pharmacies were illegal as they were not “effectively controlled” by the pharmacies, as required by law.

Countdown pharmacies are run by two directors — a pharmacist director and a corporate one, with each meant to have equal control.

The ministry and a company called RX8 submitted there was “negative control” sufficient to establish effective control where the pharmacist could block the decisions of the other director.

But the High Court ruled that the Medicines Act requires that a company granted a licence to operate a pharmacy must be both majority-owned by pharmacists and for the pharmacist shareholders to have “effective control” of the company.

The court ruled there was no effective control as the pharmacist owners could not make any changes to the businesses without approval from the corporate shareholder, Countdown.

Independent pharmacies also claimed district health boards had obligations under the Treaty of Waitangi, but the court ruled that Maori representatives from Tairāwhiti were involved in the panels that considered the contract.

The court did not accept the independent pharmacy submission that Hutt Valley District Health and Hauora Tairāwhiti did not have sufficient information to assume the abolition of the $5 charge for prescriptions would automatically reduce health inequities.

Ironically the $5 charge has been abolished by the Government — that change coming into effect on July 1.

New Zealand Independent Community Pharmacy Group spokesman Clive Cannons said the ruling was a “David and Goliath win” for the independent pharmacists.

He told Radio New Zealand he was unsure what implications the ruling may have for Australian-owned discount pharmacy chains operating in New Zealand.

“That will come out when the Ministry of Health make their submissions to the court around the effective control ownership and . . . the structure of the pharmacy companies.

“The thing that I see is that we don’t want the health of New Zealanders in the hand of Australian corporates.”

Gisborne community pharmacy spokesman Sean Shivnan said Mr Cannons has summed the matter it up well.

“The Budget decision to remove the government $5 prescription charge will definitely help reduce barriers to access.”