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Pharmacy Ownership Reform – GO WEST!
Posted: 09/11/2010
The new Pharmacy Act 2010 (WA) (the “Act”) came into effect on 18 October 2010 and replaced the Pharmacy Act 1964 (WA) ("Old Act").
The Act introduces, among other things, key regulatory changes to ownership and control of Pharmacies in Western Australia, such as:
1. A registered Pharmacist will no longer be required to be domiciled in WA to practise or carry on business as a Pharmacist, or own a Pharmacy in WA.
2. A Pharmacist, pharmacist controlled company ("PCC") or partner in a partnership that carries on a Pharmacy Business (“Partnership”) can own or hold a proprietary interest in a Pharmacy. The latter has categories of persons who may hold an ownership interest in a WA Pharmacy which significantly expands the range of persons who may have a proprietary or pecuniary interest in a Pharmacy in WA than previously existed under the Old Act.
Under the Old Act only registered pharmacists domiciled in WA could own (carry on) a Pharmacy in WA. Moreover, a pharmacist could not own a Pharmacy through a corporate structure.
Pharmacist Controlled Company (PCC)
The Act requires that:
(a) at least one (1) director of the PCC be a Pharmacist. All other directors can be a close family member (i.e. spouse, de facto partner, child, parent) ("CFM") of the director who is a Pharmacist; and
(b) each shareholder of the PCC (whether beneficial or legal) must be a Pharmacists or CFM of a Pharmacist who is a shareholder. Further, a Pharmacist(s) must be entitled to control the exercise of more than 50% of the voting power at directors meetings or attached to voting shares.
The Act allows CFMs of Pharmacists to have a proprietary interest in the PCC (as a director or shareholder). Although this change alters the long standing requirement that only Pharmacists can own or have a proprietary interest in Pharmacies in WA, a Pharmacist(s) must still exercise more than 50% of the voting power of the PCC.
Partnership
The Act requires that every partner in Partnership be a Pharmacist or CFM of a partner who is a Pharmacist. However, as the Act currently stands, there is no restriction on a CFM having a majority ownership or controlling interest in a Pharmacy. This is a significant change to the long standing requirement that only Pharmacists can own or have a proprietary interest in Pharmacies in WA. The change:
(a) brings WA into line with other States and Territories insofar as the range of persons who may have a pecuniary / proprietary interest in a Pharmacy is concerned;
(b) allows a Partnership to be structured in a more tax effective way, by for example, ensuring that the partner (Pharmacist or CFM) with the lowest taxable income has majority ownership or controlling interest in the Pharmacy.
3. A Pharmacist or CFM of the Pharmacist can now own or hold a proprietary interest in up to four (4) Pharmacies. Under the Old Act, a Pharmacist was restricted to a direct or indirect pecuniary interest in up to two (2) Pharmacies.
The New Act implements a number of other important changes regarding pharmacy premises, registration and regulation which is beyond the scope of this article.
For further information, please contact Hamish Rotstein on (03) 9604 7888. |
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