Pharmacy Location Rules are now more flexible. However, the location or relocation of pharmacies in and around shopping centres can be complicated and applicants should seek professional advice. This article considers the background, and looks at aspects of the new rules, and their impact on pharmacies and shopping centres.
The Fourth Community Pharmacy Agreement (Fourth Agreement) introduced new Pharmacy Location Rules on 1 July 2006. The rules prescribe criteria that must be satisfied to establish a new pharmacy or relocate an existing pharmacy. If a pharmacy does not meet the criteria under the rules it cannot receive government payments for dispensing PBS medicines.
Backfilling
Shopping centre “backfilling” occurs where a pharmacist relocates a pharmacy a short distance (up to 1.5km) outside a shopping centre and then relocates another pharmacy into the vacated site in the shopping centre. The distance requirements are intended to ensure there is a well distributed network of community pharmacies in Australia.
However, neither the rule relating to short relocation out of the shopping centre nor the rule on the relocation into the vacated site in the shopping centre is subject to any distance requirements between the proposed premises and other approved premises. In practice, this means pharmacies can relocate from a shopping centre, irrespective of other existing pharmacies in the location and can result in a "cluster" of pharmacies outside the shopping centre in an area which may already be well serviced. This is inconsistent with the objectives of the Pharmacy Location Rules.
The National Health (Australian Community Pharmacy Authority Rules) Amendment Determination 2007 (No. 1) addresses the issue of “clustering” of pharmacies through the introduction of the new rules. The Determination clarifies the intention of the rules by requiring the applicant to have a legal right to occupy the premises at the time of application and at the time the Authority makes its recommendation.
Shopping centre and single management
The rules define a shopping centre as a group of shops and associated facilities under single management. Single management means the management of a shopping centre or medical centre as a whole by a single manager, or a number of managers working in cooperation under an agreement, to facilitate customer use of the centre as a single integrated facility. Single management does not include a number of independent owners or tenants who cooperate only on particular occasions.
"Commercial establishment"
The Pharmacy Location Rules define a "commercial establishment" as premises occupied by, or likely to be occupied by:
(a) a shop where goods, food or beverages are sold retail; or
(b) a bar, cafe, restaurant or takeaway; or
(c) a business that provides services to customers.
Importantly, an application does not need to demonstrate that a requisite number of commercial establishments operate within the shopping centre, however it must demonstrate the shopping centre will contain the requisite number of commercial establishments.
Relevant rules summarised
Rule 109: Relocation to a small shopping centre aims to improve pharmacy access for consumers in shopping centres of sufficient size and range to attract customers from an area larger than that of the local community.
Under Rule 109, the proposed premises must be at least 500m, by straight line, from the nearest approved pharmacy or, if the Australian Community Pharmacy Authority (ACPA) is satisfied there is genuine barrier to the proposed premises, at least 500m, by the shortest lawful access route.
The proposed premises must be situated within a small shopping centre under single management, has a gross total leasable area of at least 5,000 square metres, contains a supermarket of at least 2,500 square metres, contains at least 15 other commercial establishments, and has customer parking facilities.
Rule 110: Relocation to a large shopping centre
The essential benefit of a large shopping centre is there is no distance requirement, that is, a large shopping centre is provided with a pharmacy by right.
The proposed premises must be situated within a centre under single management, has a gross total leasable area of at least 5,000 square metres, contains a supermarket of at least 1,000 square metres, contains at least 30 other commercial establishments and has customer parking facilities.
While the new rules include many of the existing provisions in past Community Agreements (such as the requirement pharmacies must generally be at least 1.5 km from each other), they introduce new provisions that allow pharmacies to co-locate with large medical centres (eight or more doctors) that operate extended hours; and to relocate to:
- small shopping centres (with 15 shops and a large supermarket); and
- large single pharmacy rural towns (8000 or more people) and urban areas with high population growth.
The new rules also give the Minister discretion to approve pharmacies in circumstances where the location rules have resulted in an unmet community need for pharmacy services. Further, the membership of the ACPA, the body which considers pharmacy applications, has been expanded to include a consumer representative.
For further information and advice please contact Damien Wurzel on + 61 3 9608 2288 or d.wurzel@cornwalls.com.au
