Poland: New Rules for Issuing Pharmacy Permits in Poland

On 15 May 2017 the President of Poland executed the Act of 7 April 2017 amending the Pharmaceutical Law (the "Amending Act"), which changes the current regulations of the Act of 6 September 2001 Pharmaceutical Law (Journal of Laws of 2016, items 2142 and 2003) regarding the issuance of permits to operate public pharmacies.
 
As is clear from the explanatory memorandum to the Act, the amendments introduced by the Amending Act will set rules for the balanced distribution of public pharmacies and to guarantee patients equal access to pharmaceutical services.

Industry representatives see these regulations as leading to an erosion of competition between pharmacies for patients. At the same time, the new provisions exclude incorporated entities from owning pharmacies. The amendments mainly cover the following:

1. Limitation of the degree of saturation of public pharmacies in particular municipalities  

The current regulations do not set any demographic or geographic restrictions when granting a permit to operate a public pharmacy.
 
Under the Amending Act, a permit to open a pharmacy will only be granted if the number of inhabitants per one pharmacy in a given municipality is at least 3,000 on the day of application, and the distance between the planned location of the pharmacy and the nearest operating pharmacy is at least 500 metres in a straight line.

These restrictions do not apply if: 

  • on the day of application the distance between the planned location of the pharmacy and the nearest operating pharmacy is at least 1,000 metres in a straight line;  
  • the entity applying for the permit acquired from the successor of the entity holding the permit the whole public pharmacy, defined as the organised complex of material and non-material components designed to carry on an economic activity, and the address of the pharmacy will not change.  

In addition, where patients have an important and necessary interest in being provided with access to medicinal products, the health minister may consent to grant through the voivodship pharmaceutical inspector a permit to operate a public pharmacy in which the above restrictions are excluded.
 
A favourable opinion from the voivodship pharmaceutical inspector and the mayor of the municipality, town or city in which the planned pharmacy will be located is required for the consent to be granted.

2. Limitation of the range of entities able to receive the permit to operate a public pharmacy

Under the current provisions the right to obtain the permit to operate a pharmacy is granted to a natural person, legal person or company without legal personality. At the same time, the entity operating a pharmacy is obliged to appoint a pharmacy manager, who is the pharmacist responsible for guaranteeing the due operation of the pharmacy.

In light of the Amending Act, the permit to operate a pharmacy will be granted to pharmacists with the right to practice the profession, who run a sole proprietorship, and partnership or general partnership whose sole core activity is operation of pharmacies and in which the partners are only pharmacists with the right to practice the profession.
 
The Amending Act obliges the voivodship pharmaceutical inspector to withdraw the permit to operate a public pharmacy if the pharmacist running the sole proprietorship or a partner of the partnership loses the right to practice the profession and this loss would render the entity unable to operate a pharmacy. The provision on withdrawal of the permit applies only to permits granted after the entry into force of the Amending Act.

3. Further limitations to concentration on the market of public pharmacies  

Currently, the permit to operate a pharmacy is not granted when the entity applying for a permit or entities controlled by a given subject operate more than 1 % of public pharmacies in the voivodship, for example. The existing regulations do not set any restrictions regarding the number of pharmacies operated by one entity.
 
The Amending Act also introduces a ban on issuance of the permit when the applicant, a shareholder or partner of the company applying operates at least four public pharmacies on his own or through his shareholders/partners, or has corporate or capital connections with other entities operating at least four public pharmacies, or is connected in a corporate or capital manner with entities operating at least four public pharmacies. The above applies when the applicant, the shareholder or the partner of the company applying:

  • is the shareholder, including a partner, in a company or companies operating at least four public pharmacies jointly; or  
  • operates at least four public pharmacies or the entity/entities controlled by the applicant directly or indirectly operate(s) at least four public pharmacies; or  
  • is the member of a corporate group whose members operate at least four public pharmacies jointly; or  
  • is a member of the governing body of a company having a permit to operate a pharmaceutical warehouse or carrying out activities connected with  brokerage of medicinal products.

4. Exclusion of the general succession of permits to operate pharmacies

The Amending Act also excludes the general succession of permits to operate public pharmacies in the process of the division, merger or transformation of entities having such permits.

The succession of a permit will be permissible for the benefit of the entity that acquired the whole public pharmacy, defined as the organised complex of material and non-material components designed to carry on an economic activity, in whose favour the permit was granted, if:

  • the purchaser meets the requirements to be granted the permit to operate a pharmacy and accepts all conditions provided in the permit in writing;  
  • the address of the pharmacy will not change.  

The Amending Act provides the possibility for the voivodship pharmaceutical inspector to issue, in the decision declaring the expiry of the permit, the consent to sell all medicinal products left in the pharmacy on the date of the expiry of the permit to a pharmaceutical warehouse, pharmacy or pharmaceutical point. The Act also provides further amendments that follow from the change of the legislator's concept of the pharmaceutical retail market.
 
In accordance with the transitional provisions, the current provisions will apply to pending and uncompleted proceedings (concerning the applications for permits to operate a pharmacy) before the entry into force of the Amending Act. The permit to operate a public pharmacy issued before the entry into force of the Amending Act remains valid. It means that amendments provided in the Amending Act will impact only the new permits to operate public pharmacies, ie permits issued after the entry into force of the Amending Act.
 
The Act will enter into force on 25 June 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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