In this Circular

Chair's message

It is pleasing that many Victorian pharmacies have registered to participate in the COVID-19 vaccination rollout. As the peak demand for influenza vaccination approaches and with the rollout of COVID-19 vaccines, licensees who provide immunisation services should assess and consider measures to address workload capacity, physical distancing and related requirements. Authority inspectors are conducting site inspections and will be monitoring compliance in this area.

Disappointingly, there have been recent media reports or statements claiming that certain entities own hundreds of pharmacies without evidence to support the claims. The Authority reminds stakeholders that only registered pharmacists, companies of pharmacists and eligible friendly societies may own pharmacies in Victoria. The Authority will continue to ensure that legislated ownership provisions are upheld. This is supported by comprehensive licence application assessment processes, pharmacy ownership audits and franchise reviews.

This circular clarifies the Authority’s approach to pharmacy franchise agreements and other commercial arrangements. It also highlights whether Authority approval is required to construct an immunisation room.

Please make the circular available to all pharmacy staff.

David McConville
Chair

Special focus

Perceptions about pharmacy ownership

The Authority regulates the ownership and operation of pharmacy businesses. It is committed to ensuring that all Victorian pharmacies are owned, operated and controlled only by registered pharmacists.

Media, consumers and even some pharmacists will see a prominent brand and assume that the franchisor or “head office” has ownership over the individual pharmacies or franchises.  The Authority is aware of media reports and statements claiming that certain entities own hundreds of pharmacies; however, these claims are not supported by evidence.

Section 5(1) of the Pharmacy Regulation Act 2010 (Act) limits who may own or have a proprietary interest in a pharmacy business to registered pharmacists, pharmacist companies or eligible friendly societies.

Further, section 5(2) of the Act states that a registered pharmacist or pharmacist company must not own or have a proprietary interest in more than 5 separate pharmacy businesses in Victoria.

A breach of section 5(1) of the Act carries a penalty of up to 240 penalty units (approximately $40,000) in the case of a natural person, or 1200 penalty units (approximately $200,000) in the case of a company.

The Act provides for a person to notify the Authority about any matter relating to a licensee if the person has information indicating that the:

• licensee has contravened the requirements regarding ownership of pharmacies; or
• licensee is no longer eligible to hold a licence; or
• licensee has contravened the Act; or
• licence having been improperly obtained because the Authority was provided with false or misleading information.

The Authority will investigate a matter based on such a notification.

Details of Victorian licensees can be viewed via the Register Search on the VPA website.

Franchise agreements and other complex commercial arrangements – VPA approach

The Authority carries out comprehensive reviews of pharmacy franchise agreements and other complex commercial arrangements to ensure compliance with the Act. This process has identified several cases where franchise agreements gave a third party the right to control aspects of the operation of the pharmacy business.

Section 11 of the Act (Undue influence) makes void any provision of a commercial arrangement concerning a pharmacy that gives any person other than the person licenced to carry on the pharmacy business:

a) the right to control the manner in which the pharmacy business is carried on; or
b) the right to access books of accounts or records kept in respect of that business, otherwise than for the purpose of determining whether or not the conditions of the relevant document are being complied with; or
c) the right to receive any consideration that varies according to the profits or takings of the business.

This section prevents the use of commercial arrangements to remove control of a pharmacy business from the licensee.

Established commercial arrangements
The process involves conducting detailed reviews of the arrangements and inviting the franchisor/third party providers to a meeting to discuss the areas of non-compliance.

In all cases, such arrangements have been brought into compliance with the ownership and undue influence provisions of the Act.

Established commercial arrangements continue to be reviewed for compliance with the Act on a risk basis.

New commercial arrangements
Any new commercial arrangements must be compliant with the Act before the Authority will issue a licence to a person to carry on a pharmacy business pursuant to the arrangements.

Pharmacy ownership audit program update

The Authority recently wrote to licensees regarding the outcomes of several pharmacy business ownership audits.

In cases where the pharmacy was operating under a commercial arrangement for which the Authority had not yet completed a detailed assessment, licensees were advised that a condition will be imposed on the licence. This “commercial arrangement” condition details the action the Authority may take if, after further investigation, the commercial arrangements are found to contravene the Act.

The “commercial arrangement” condition is a standard licence condition which has been imposed since 2017 on new licences when an applicant wishes to operate a pharmacy business under arrangements which have not yet undergone a detailed assessment for compliance with the Act. It is removed from a licence when the Authority is satisfied that the pharmacy business commercial arrangements comply with the Act.

The Authority is currently consulting with stakeholders to identify further improvements to the pharmacy ownership audit program.

Update: Managing Schedule 8 poisons – a reference guide for pharmacists

The Authority’s reference guide seeks to support pharmacists to understand and comply with their obligations regarding the management of S8 poisons, particularly in areas where frequent non-compliance is observed during inspections.

Though most pharmacies are able to store their S8 prescriptions separately from other records, the Authority appreciates that that this may not be a practical approach in all settings (including pharmacy departments) and that other approaches may be taken to ensure they can be retrieved readily.

The Record section of the reference guide has been updated to reflect the required outcome:

You must retain in a secure place at the pharmacy for 3 years from the date of transaction:

• all S8 poison transaction records in a readily retrievable form.
• S8 prescriptions stored in a manner that ensures their integrity and ability to readily retrieve.

Refer to Medicines and Poisons Regulation (MPR), Department of Health’s guidance document Dispensing medicines – requirements for pharmacists for further information (see Retaining prescriptions for Schedule 8 poisons).

Applications

Guidance on franchise agreements for stakeholders

The Authority publishes commercial arrangement guidance on its website to assist stakeholders to ensure that pharmacy business commercial arrangements comply with the Act.

The Authority’s guidance on franchising provides examples of the types of clauses that pharmacists should be wary of and avoid, such as clauses that:

• allow the Franchisor to dictate the way in which the business is operated;
• provide that any amounts payable to the Franchisor increase or decrease in accordance with the profits of the business (for example, a Franchise annual fee that is a base amount plus a % of profits);
• provide the Franchisor with unfettered (i.e., unlimited) discretion to make decisions with respect to the business;
• provide that amounts contributed by the pharmacy business to such things as Franchisor marketing funds or training are calculated by reference to the profit of the business;
• provide a Franchisor with a right of access to books of account or records kept in respect of the business (otherwise than for the purpose of determining whether the agreement is being complied with), as opposed to the franchisee having the option to provide certain information to the franchisor so that a specific requested service can be provided (for example, marketing or management services).

There is also a checklist to assist with the preparation and negotiation of franchise agreements.

The Authority strongly encourages pharmacists to seek independent legal advice prior to entering in to a Franchise Agreement.

Licensees are also reminded to notify the Authority of proposed changes to pharmacy business commercial arrangements in accordance with their licence condition.

Inspectors are out on the road

The Authority’s inspectors have recommenced unannounced site inspections.

Inspections may now be conducted as a site inspection without notice or as a remote inspection by appointment using a readily available virtual meeting platform. Site inspections continue to be the Authority’s preferred method for monitoring compliance and assisting pharmacists to meet their obligations to comply with the Act and good pharmacy practice.

The Authority will continue to make changes to its inspection program in line with risk-based approaches and pandemic developments.

Immunisation – focus on pharmacy workload and compliance

Licensees should be mindful of workload and staffing levels and have contingency measures in place due to the expected demand for immunisation services.

Licensees should be preparing for the management of increased numbers of consumers presenting to pharmacies for vaccines, including measures to ensure physical distancing requirements are met on presentation to the pharmacy as well as post-vaccination. The use of an electronic booking system to manage appointments at reasonable time intervals considering staffing levels, pharmacy space and physical distancing requirements is strongly encouraged.

The Authority’s inspectors will be monitoring pharmacies providing immunisation services to ensure compliance with VPA guidelines (4.3.13 Facilities for immunisation services) and other requirements relevant to pharmacist immunisers generally as well as those specific to the preparation and administration of the COVID-19 vaccine.

Welcome Karen La

The Authority welcomes Ms Karen La to its staff as an Authorised Officer. Karen is a registered pharmacist with a background in aged care and extensive experience as a community and locum pharmacist. Her role will focus primarily on community pharmacy inspections. She commenced her employment with the Authority in January 2021.

Quarterly performance report

The Authority's performance measurement framework provides information on its activities and intended outcomes. The quarterly performance report for the period 1 October 2020 to 31 December 2020 is available on the Authority’s website.

Did you know?

Planning to construct an immunisation room in the pharmacy?

Licensees planning to construct a consultation room to deliver immunisation services on registered premises must seek the Authority’s approval if the construction involves a significant alteration to the pharmacy or pharmacy department.

Significant alterations are described in the Authority’s guidelines (4.2.2 Alterations to registered premises) to include any of the following:

• alterations to the perimeter or perimeter security of the premises
• alterations affecting public access to the premises
• alterations to the dispensary including changes to the perimeter and access to the dispensary
• alterations to counselling areas
• addition of a compounding room or dose administration aid filling room separate to the dispensary

In designing the layout, it is recommended that licensees pay particular attention to ensuring the provision of a hygienic environment for the preparation and administration of vaccines on an ongoing basis (e.g., the room used to deliver immunisation services should not be a thoroughfare to a washroom).

If clarification is required, applicants are advised to call the office on 9653 1700 or send a copy of the proposed plan to enquiries@pharmacy.vic.gov.au.

An application for alterations to an existing registered premises must be approved by the Authority prior to making significant alterations to a pharmacy or pharmacy department. The VP21 application form is available on the Authority’s website.

Resources

Supporting key learnings from recent inspections and areas of high risk, licensees and pharmacists may wish to refer to the following resources alongside the VPA Guidelines. Resources are not limited to the list below and pharmacists are encouraged to review other relevant references as required.

• Pharmacy Board of Australia Guidelines for proprietor pharmacists here.
• Pharmacy Board of Australia Guidelines on practice-specific issues - Guideline 1 (List of reference texts for pharmacists) can be viewed here.
• Pharmacy Board of Australia Guidelines on dose administration aids and staged supply of dispensed medicines can be viewed here.
• Pharmacy Board of Australia Guidelines for dispensing of medicines with reference to requirements for barcode scanning can be viewed here.
• Pharmacy Board of Australia Guidelines on compounding of medicines can be viewed here.
• DPCS Regulations 2017 with reference to requirements for recording, storage and reconciliation of Schedule 8 poisons can be viewed here.
• Medicines and Poisons Regulation: Managing Schedule 8 poisons - summary of requirements for pharmacists can be viewed here.
• National Vaccine Storage Guidelines "Strive for 5" can be viewed here.

Members of the Victorian Pharmacy Authority

Mr D McConville, Chair   (Pharmacist member)
Ms E Kennedy   (Lawyer member)
Ms C Fersterer   (Pharmacist member)
Mr B Moar   (Pharmacist member)
Ms M Ritchie   (Community member)
Mr D Sanghvi   (Pharmacist member)

Authority Staff

Registrar: Mr A Bawden
Senior Pharmacist: Mr D Thirlwall
Pharmacist: Mrs C Greco (Program Officer - Licensing and Registration)
Pharmacist: Authorised Officer - Ms J Webster
Pharmacist: Dr J Snell (Governance and Risk Officer)
Pharmacist: Authorised Officer - Ms T To
Pharmacist: Authorised Officer - Ms K La
Chief Finance Officer: Mrs K Nadanakumar
Administration Officer: Mrs H Newett

Address: Level 2, 15-31 Pelham Street, Carlton, Victoria, Australia 3053
Telephone: (03) 9653 1700
Email: enquiries@pharmacy.vic.gov.au
Website: www.pharmacy.vic.gov.au