Supply of pharmaceutical benefits "from" approved premises
22 It will be recalled that the pre-2007 version of s 90(1) of the Act referred to a pharmacist being approved "for the purpose of supplying pharmaceutical benefits at or from" identified premises. Those premises were premises "at" which the pharmacist was "willing to supply pharmaceutical benefits on demand".
23 The amendments made in 2007 came shortly after the decision of the Full Court (Dowsett, Greenwood and Collier JJ) in Holzberger v Secretary, Department of Health and Ageing [2007] FCAFC 68; 158 FCR 586 (Holzberger). Holzberger was an appeal on questions of law from a decision by the Administrative Appeals Tribunal. The central issue was whether the applicant's approval was liable to be cancelled under s 98(3) of the Act, which permits cancellation when the Secretary is satisfied that the approved pharmacist "is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved". The applicant had purchased a pharmacy and obtained approval in connection with it, but had set up business at other nearby premises and intended to close the first pharmacy. She worked at the new premises and dispensed medications from there, but rarely if ever interacted with patients there. The first pharmacy remained open, with medication delivered from the new premises and a qualified pharmacist on duty to assist patients. The Tribunal affirmed a decision to cancel the applicant's registration under s 98(3). The Full Court held that the Tribunal had erred in its understanding of the provision. The Court concluded at [20] that, on the facts as found, the applicant was carrying on business at two locations. Their Honours continued:
There was no suggestion that this practice was inconsistent with the terms of her approval. Indeed, s 90 contemplates the supply of pharmaceutical benefits away from the premises which are the subject of the approval. Each of subss (1), (2) and (3) refers to supply "at or from" the premises in question, indicating that the supply of pharmaceutical benefits need not necessarily occur "at" the approved premises. It is sufficient if such supply is made "from" those premises. The Tribunal's decision necessarily assumed that a pharmacist could only carry on business at the site at which prescriptions are received and medications physically delivered. Given the aspect of s 90 to which we have referred, it seems unlikely that this was Parliament's intention.
24 This was part of the background to the 2007 Amendment Act, which amended s 90(1)-(3) so as to put them in their current form. Now, approval is to be sought and granted for the purpose of supplying pharmaceutical benefits "at" specified premises. In his Second Reading Speech on the Bill for the 2007 Amendment Act, the Minister (Mr Pyne) said (Australia, Parliamentary Debates, House of Representatives, 20 September 2007, 139 (Christopher Pyne, Minister for Ageing):
The act [sic] currently uses the term 'at or from' premises in relation to the supply of pharmaceutical benefits by approved pharmacists. This means, if an approved pharmacist is conducting a mail order business, there is no need for the pharmacist to have a shopfront pharmacy supplying to their local community.
The proposed amendments provide that an approved pharmacist must supply pharmaceutical benefits 'at' their pharmacy - that is, to have a shopfront for people to physically attend the pharmacy. In addition, an approved pharmacist may also choose to supply pharmaceutical benefits 'from' their pharmacy to people who do not physically attend the pharmacy - for example, to nursing home residents or to a person by mail order.
25 Although neither the Second Reading Speech nor the Explanatory Memorandum to the Bill expressly refers to Holzberger, the case was referred to by the Shadow Minister (Ms Roxon) in the course of the Second Reading debate (Australia, Parliamentary Debates, House of Representatives, 20 September 2007, 141 (Nicola Roxon)); and the first paragraph of the extract from the Second Reading Speech set out above appears to draw on the observation in Holzberger that "the supply of pharmaceutical benefits need not necessarily occur 'at' the approved premises". Whether or not Holzberger constituted the source of this understanding, the apprehended consequence - that an approved pharmacist might conduct business as such without maintaining a shopfront where people could attend and be served personally - is evidently the mischief at which these amendments were directed. The second paragraph of the extract indicates the solution that the legislature had in view (statements to similar effect appear in the Explanatory Memorandum to the Bill, at pp 4-5 and 18). This view is supported by the fact that another amendment made by the 2007 Amendment Act was the insertion of s 90(3D), precluding the approval of a pharmacist in respect of premises if pharmaceutical benefits cannot be provided "at" those premises or if they are not accessible by members of the public.
26 Contrary to a submission made by the applicants, it is not appropriate in these circumstances to regard the 2007 Amendment Act as having re-enacted the earlier wording of s 90 and thereby endorsed the construction given to that wording in Holzberger: cf, eg, Re Alcan Australia Ltd; Ex parte Federation of Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96, 106 (the Court). The provisions as amended do not repeat the phrase "at or from". Instead, they make clear that approval is to be sought and granted for supply "at" specified premises, then provide in a separate subsection for supply "from" such premises. As I have noted above, features of the debate indicate that a possible consequence of the Holzberger construction was in fact the perceived problem that led to these amendments being made.
27 The 2007 Amendment Act also inserted s 4(3) into the Act. It provides as follows.
A reference in this Act to the supply of pharmaceutical benefits at premises is a reference to the supply of pharmaceutical benefits to people who are at the premises when the supply is made.
28 It is in this context that s 90(5AA) is to be understood. That subsection is somewhat infelicitously drafted, in that it appears in a section devoted to the purposes of and criteria for approval but appears to be intended to authorise conduct by a pharmacist after they are approved. Further, the conduct that a pharmacist "may" engage in pursuant to s 90(5AA) is not conduct that is otherwise prohibited by the Act. The work that is done in a literal sense by s 90(5AA) is therefore somewhat obscure. The respondent accepted, however, that a condition purporting to prohibit the supply of pharmaceutical benefits "from" approved premises could not validly be imposed as a consequence of s 90(5AA). I agree that, whatever else s 90(5AA) might do, it limits in this way the power to impose conditions (notwithstanding that s 92A(1)(f) expressly envisages conditions in respect of "premises").
29 The placement of s 90(5AA) in s 90, and its genesis alongside the amendments made in 2007 to other provisions in that section (as well as s 4(3)), sheds light on the relationship between the concepts of supply of pharmaceutical benefits "at" and "from" premises.
(a) Supply of a pharmaceutical benefit "at" approved premises - which is what the pharmacist must propose to do in order to obtain approval under s 90(1), (2) or (3) - connotes the physical handing over of the pharmaceutical benefit (ie, the drugs in the form and quantity prescribed) to a customer at those premises. The definitional provision in s 4(3) confirms this. The language is agnostic as to whether anterior steps, such as those involved in "dispensing" medication in accordance with applicable laws and procedures, are also undertaken at those premises (leaving those issues, at least potentially, to be regulated by conditions under s 92A).
(b) The "supply" referred to in s 90(5AA) is supply "from" the premises in respect of which the pharmacist is approved. This was obviously conceived as something different from supply "at" those premises; however, the connection with approved premises is important. The expression connotes that the relevant pharmaceutical benefit is dispatched "from" those premises (not from a remote warehouse or depot) to the patient or to a location where the patient can collect it. Because the premises in respect of which approval is given will necessarily be a place "at" which the pharmacist supplies (or at least proposes to supply) pharmaceutical benefits, the permission granted by s 90(5AA) does not confer an entitlement to conduct business as an approved pharmacist without maintaining a shopfront where members of the public can attend in person to obtain pharmaceutical benefits.
30 The applicants submit that the amendments in the Instrument have the effect of:
(a) prohibiting supplies of pharmaceutical benefits that are not made "at" the approved premises;
(b) regulating the dispensing practices of both approved and registered pharmacists, such that they must be conducted at the approved premises, and with the result that the entire dispensing process for each medication must be conducted by a single (ie: the same) registered pharmacist;
(c) imposing these conditions generally upon approved pharmacists, irrespective of whether the approved pharmacist intends to claim payments or advances under the PBS.
31 As to the first of these points, it will be noted that the Note underneath the new s 9(1) refers to s 4(3) of the Act. Section 4(3) has been set out above.
32 The applicants contend that, applying the instruction in s 4(3) to the interpretation of new s 9 of the Determination, that section has the effect that any supply of a pharmaceutical benefit is prohibited if the customer receives it at premises which are not "approved premises". That has the effect of preventing any supply of pharmaceutical benefits "from" approved premises unless the recipient is located at another approved premises or at some place that does not constitute "premises" (eg, in a park). This is said to be in conflict with s 90(5AA).
33 The usual approach to applying a definition is to read the words of the definition into the substantive enactment (in place of the defined word or phrase) and construe the substantive enactment in its context: Kelly v The Queen [2004] HCA 12; 218 CLR 216 at [103] (McHugh J). However, that cannot be done in any mechanical way in the case of a provision such as s 4(3) that does not simply supply text that can stand in the place of a defined term.
34 Further, s 4(3) must itself be construed in its context. As noted earlier, it was inserted by the 2007 Amendment Act. It was evidently intended to assist in clarifying the relationship between supply "at" approved premises (the subject matter of s 90(1) to (3)) and supply "from" such premises (the subject matter of s 90(5AA)). It was not intended to create tension between the concept of approval for the purpose of suppling pharmaceutical benefits "at" approved premises on the one hand, and the permission to supply pharmaceutical benefits "from" those premises on the other. This makes it unlikely that a consequence of s 4(3) was intended to be that any supply of pharmaceutical benefits would be taken to occur "at" the premises where the patient was located, wherever that might be.
35 Section 4(3), like the provisions in s 90, treats the "supply" of pharmaceutical benefits as an activity engaged in by the pharmacist. So much is clear, at least, from the reference in s 4(3) to the supply "to people who are at the premises": the focus is not on individual transactions but on the nature of the pharmacist's activity. If a supply of pharmaceutical benefits "from" approved premises is effected by entrusting those pharmaceutical benefits to the postal service or a courier to be delivered to the patient, the pharmacist's role is complete at that point. There is therefore no relevant supply "at" the place where the patient receives the delivery. New s 9 of the Determination, in its reference to the supply of pharmaceutical benefits "at" premises that are not approved (which, in the light of the Note underneath the section, is clearly intended to be construed consistently with s 4(3)), therefore does not have the vice contended for by the applicants. What new s 9 is directed at, and seeks to preclude, is a pharmacist (or their employee or agent) physically handing over pharmaceutical benefits to patients who attend premises in person, where those premises are not approved.
36 The second point is directed at the introduction, by new s 10 (read with the definition of "dispensing steps" in new s 5), of requirements for the pharmaceutical benefit to be at the approved premises when all dispensing steps are performed and for a registered pharmacist, physically present at the approved premises, to conduct or supervise those steps. It is submitted that these requirements seek to prohibit "remote dispensing", ie, supply "from" approved premises. I reject that submission. What these requirements do is require the administrative steps involved in lawfully dispensing medication to be performed at approved premises, by a registered pharmacist physically present, and for the relevant pharmaceutical benefit to be at the approved premises while those steps are performed. This is not inconsistent with the pharmaceutical benefit then being sent to a patient who is at another location.
37 Further, the new section does not purport to regulate the conduct of registered pharmacists. Having been made in overt reliance only on s 92A(1A), the provision does no more than erect a condition on continuation of a pharmacist's status as an "approved pharmacist" under the Act. It potentially affects that pharmacist's right to claim and receive payments under the Act by giving rise to a prospect of suspension or revocation if breached. It does not purport to affect the lawfulness of any particular dispensing or supply of any drug.
38 I understand the gravamen of the third point to be that new ss 9, 10 and 11 apply to a supply by an approved pharmacist whether or not the pharmacist claims an advance or payments from the Commonwealth in respect of that supply. This appears to be correct. However, it does not lead to any inconsistency with the Act. Section 92A expressly imposes conditions on a pharmacist's approval, not on claims for payment for individual supplies. Compliance with those conditions (including conditions imposed by a determination under s 92A(1)(f) and (1A)), is thus the price of avoiding potential suspension or revocation of approval under s 95. The conditions imposed directly by s 92A(1)(a)-(c) and (d) relate to advertisements, refund arrangements and general practices rather than individual supplies of pharmaceutical benefits. The potential subject matter of additional conditions in s 92A(1)(f) is broadly framed and expressly includes conditions in relation to premises. There is therefore room in the statutory language for the Minister to pursue policies that encourage or discourage particular behaviours or business models by imposing conditions that control a pharmacist's continued access to payments under the pharmaceutical benefits scheme. The premise of this aspect of the statutory regime has some similarity to that described in Regis Aged Care Pty Ltd v Secretary, Department of Health [2018] FCA 177; 261 FCR 120 at [65] (Mortimer J): compliance with such standards as are imposed from time to time is the price of access to a subsidy funded by the Commonwealth.