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Insolvent pharmacy: New powers for external administrators

06 November 2019

#Dispute Resolution & Litigation

Chris Brodrick

Published by Chris Brodrick, Mitchell Waters

Insolvent pharmacy: New powers for external administrators

Recent amendments brought about by the National Health Amendment (Pharmaceutical Benefits) Bill 2019 (Cth) allow for the supply of pharmaceutical benefits by approved pharmacies under the Pharmaceutical Benefits Scheme (PBS) to continue following external administration or bankruptcy (section 91B, National Health Act 1953 (Cth) (Act)).

Permission for continued supply must be sought from the Secretary of the Department of Health (Secretary) and the process for so doing will be set out in section 91B(4) of the Act. This application must be made before the end of the 10 business day period commencing on either the commencement of the external administration or the appointment of the bankruptcy trustee. Permission can otherwise be sought from the Secretary, if the application is made out of time, but will only be granted for a temporary period to allow the pharmacy business to be transferred or sold.   

The amendments also allow an external administrator or bankruptcy trustee to continue to supply pharmaceutical benefits using the pharmacist’s current approval number. The external administrator is also able to cancel the approval of the existing pharmacist and install an approved pharmacist to supply pharmaceutical benefits at the same premises.

The amendments facilitate the stated aim of the legislation to ensure continued community access to pharmaceutical products. It also provides efficiencies for external administrators and bankruptcy trustees who accept appointments in this space.

The amendments to the Act will come into force on 2 December 2019.

Authors: Chris Brodrick & Mitchell Waters

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The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

Chris Brodrick

Published by Chris Brodrick, Mitchell Waters

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