In Australia, there are strict regulations on owning and operating a pharmacy to ensure high-quality healthcare. With the rise of online businesses, marketplace models are becoming increasingly popular. Accordingly, online pharmacies are evolving and currently operating in a regulatory grey area. Thus, if you are considering opening a pharmacy marketplace, you must understand the governing laws that may apply. This article will discuss the fundamental laws governing pharmacies and some of your critical obligations.
Online Marketplaces
Online marketplaces are increasingly common business models. They are generally online platforms that connect a party who can offer a service or product to the consumer. The marketplace operator acts as a host to facilitate the transaction. However, they do not have any direct involvement. Generally, marketplace hosts will typically facilitate communication between the transacting parties and payment for the services or products. The ongoing involvement of marketplace hosts will typically vary based on the business model and industry.
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What Law Governs Pharmacies?
The main law governing pharmacies and other health professionals is the Health Practitioner Regulation National Law (the National Law).
Additionally, the Australian Health Practitioner Regulation Agency (AHPRA) regulates pharmacists who must follow industry-specific practice guides. For example, the Pharmacy Board of Australia Guidelines on the Compounding of Medicines and the Pharmaceutical Society of Australia Professional Practice Standards.
Continue reading this article below the formHow Does the Legislation Apply to Pharmacy Marketplaces?
The key areas of concern for pharmacy marketplaces are set out below:
| Issue | Law | Application of Law |
| Financial or security interest in a pharmacy business | National Law provides that only a pharmacist, a partner in a pharmacist partnership, a pharmacist body corporate or a friendly society can hold a financial interest in a pharmacy. Further, the National Law voids security interests in the profits or takings of a pharmacy business. | Charging fees for marketplace services or charging a percentage of any sales made on the marketplace could be considered a financial interest in a pharmacy business or security interest in the profits of a pharmacy business. This will impact the structure required to set up a marketplace. |
| Advertising of regulated products and services | Dispensing of medicines is a regulated health service. A regulated health service is a service usually provided by a registered health practitioner). Certain products, in particular prescription products, are considered therapeutic goods. Therapeutic goods contain scheduled ingredients, have a therapeutic benefit or make therapeutic claims. | Suppose the marketplace facilitates the sale of prescription medicines (or other therapeutic goods). In that case, it will be captured by the advertising rules under the National Law and Therapeutic Goods Advertising Code (No. 2) 2018 (TGA Ad Code). These rules are discussed in further detail below. |
| ACL Obligations | Under the ACL a supplier means a person who supplies in trade or commerce to a consumer by way of sale, exchange, lease, hire or hire purchase goods. The ACL defines a manufacturer as a person who grows, extracts, produces, processes or assembles goods. | The following factors will influence whether a marketplace provider could be considered a supplier or manufacturer: + website layout; + advertisement of the products; + influence on product pricing; and + acceptance of payment for the products. Marketplaces can be considered suppliers or manufacturers and will have obligations under the ACL concerning consumer guarantees. |
Advertising Considerations
Advertising of any pharmacy marketplace should take into account the ACL, National Law and TGA Ad Code. Consequently, the key requirements for any advertising material are:
- the advertisements must not be false, misleading or deceptive;
- where the advertisement refers to a regulated health service (specifically dispensing of medicines in this case), the title ‘pharmacist’ must be used correctly because this is a protected title under the National Law;
- advertisements must not use testimonials; and
- advertisements must not encourage indiscriminate or unnecessary use of regulated health service like the dispensing of medicines.
Key Takeaways
In summary, the regulation of health services is complex. Accordingly, you must obtain advice specific to your business model before you launch to ensure you understand the risks and ensure you set up your business structure appropriately.
Thus, if you have any questions about the regulation of health services and pharmacies in Australia, our experienced compliance lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Online platforms generally connect a party who can offer a service or product to the consumer. The marketplace operator acts as a host to facilitate the transaction but is not directly involved. Marketplace hosts will typically facilitate communication between the transacting parties and payment for the services or products. The ongoing involvement of marketplace hosts will typically vary based on the business model and industry.
Pharmacies are governed by the Health Practitioner Regulation National Law, the Australian Health Practitioner Regulation Agency industry guides, the Board of Australia Guidelines on the Compounding of Medicines and Pharmaceutical Society of Australia Professional Practice Standards and the Australian Consumer Law.
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