Supreme Court decides in favour of RASK’s client in a key pharmacy reform case

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Supreme Court decides in favour of RASK’s client in a key pharmacy reform case

On 18 March 2021, the Supreme Court made a landmark decision in the context of the pharmacy reform, clearly stating that analysing registry data is not enough to verify the independence of a pharmacy operator – actual economic, organisational and legal ties must also be considered.

RASK represented Põltsamaa Uus Apteek OÜ in a court dispute that challenged the decision of the Estonian Agency of Medicines to grant PharmaTwo OÜ permission to take over the activity licence of Põltsamaa Keskuse Apteek. Despite complying with the formal requirements of the law, there were sufficient grounds to say that Euroapteek OÜ maintained its dominant influence in the new pharmacy.

The Supreme Court noted that the sole ownership by a pharmacist may be insufficient to determine dominant influence. Assessing an operator’s independence requires taking into account all the relevant information on economic, organisational and legal ties linking it to another operator. In the present case, previous court instances had failed to assess, for example, the franchise agreement and other economic ties.

“The Supreme Court judgment specifically stated that, with the pharmacy reform, the legislator aimed to rule out wholesalers controlling the activities of general pharmacies. However, this aim cannot be achieved through a superficial and formalistic approach by the Agency of Medicines. According to the Supreme Court’s guidelines, it should now be clear that the state must start conducting substantive inspections both when issuing an activity licence to a general pharmacy and later when it is already operating,” said attorney-at-law Villy Lopman, who represented the client in the Supreme Court.

As the Agency of Medicines may continue to check the compliance of a pharmacy operator with the requirements of the Medicinal Products Act after issuing an activity licence, the effect of this Supreme Court decision is not limited to the present dispute but directly affects all pharmacy operators in Estonia.

“This court judgment sets a precedent in the Estonian legal order. It is the first time the Supreme Court has provided a substantive interpretation of dominant influence in the context of the pharmacy reform, confirming that all relevant legal, economic and organisational ties must be assessed when verifying dominant influence. So far, this has not been the practice. In essence, this decision is aimed at the final application of the pharmacy reform, a year after the reform entered into force,” adds attorney Birgit Aasa.

Põltsamaa Uus Apteek OÜ was represented in the court dispute by RASK partner Villy Lopman and attorney Birgit Aasa, PhD.