Chhaya and Secretary, Department of Health

[2015] AATA 1013

Chhaya and Secretary, Department of Health [2015] AATA 1013 (23 December 2015)

Division

GENERAL DIVISION

File Number(s)

2014/4586

Re

Rajeev Chhaya

APPLICANT

And

Secretary, Department of Health

RESPONDENT

And

Greenbank Pharmacy Pty Ltd

Ashwin Ratilal
Khen Ly

Michael Kan

JOINED PARTIES

DECISION

Tribunal	Senior Member McCabe
Date	23 December 2015
Place	Brisbane

The decision under review is affirmed.

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Senior Member McCabe

Catchwords

PHARMACEUTICAL BENEFITS – supply – practice location - convenient and efficient pharmaceutical service – whether joined parties provide convenient and efficient service – decision under review affirmed

Legislation

National Health Act 1953 (Cth) ss 90, 92

REASONS FOR DECISION

Senior Member McCabe

23 December 2015

1. Dr Rajeev Chhaya is a medial practitioner. He conducts two general practices on Brisbane’s outskirts. He wants an approval under s 92 of the National Health Act 1953 (Cth) (the Act) to supply pharmaceutical benefits in his local area. A delegate of the Secretary of the Department of Health refused the applications in a reviewable decision dated 8 August 2014. Dr Chhaya has asked the Tribunal to reconsider the matter.

2. The Secretary is the respondent to this application but other parties were joined to the proceedings because they had an interest in the outcome. The joined parties were all local pharmacists. They agree the area in question is already well served by pharmacies trading from approved premises.

3. I am not satisfied Dr Chhaya should be given the approval he seeks. The decision under review must therefore be affirmed. I explain my reasons below.

The area served by Dr Chhaya’s practices

1. Chhaya Medical Services Pty Ltd – Dr Chhaya’s family company – owns two medical practices on the outskirts of Brisbane. Both practices use the word “Pioneer” in their trading name. Dr Chhaya’s company uses the expressions Pioneer Health Services and PHS to describe its business. I note the PHS logo appears to be based on the logo used by the National Health Service in the United Kingdom. Dr Chhaya hails from that country.

2. The first practice trades under the name Greenbank Pioneer Health. The practice is located in a small, unprepossessing shopping centre on Sheppards Drive in Greenbank. The site is adjacent to a large military reserve. It is not serviced by regular public transport; most patients must drive to the location. Housing developments are beginning to emerge in the area, although there are also houses on large blocks and semi-rural small acreage.

3. Dr Chhaya spends most of his time at the Greenbank practice. His wife focuses on the second practice, which trades under the name Flagstone Pioneer Health. It is located in the Flagstone Village Shopping Centre on the corner of Bushman and Homestead Drives, Jimboomba. That shopping centre is also small, and the public transport services are poor. Jimboomba is growing: the nearby Flagstone housing estate is projected to include thousands of new homes.

4. Both practices provide the usual range of services. But Dr Chhaya wants to do more. His objectives were summarised in a letter dated 21 July 2014, which he wrote in support of his application for approval to dispense pharmaceutical benefits from both locations (exhibit one at p 74). He explained:

   We are a team of general practitioners in a large rural area made up of acreage blocks and for the majority of our patients a pharmacy is a fair distance drive away in either direction. We would like to be able to dispense medications for our patients, just until a pharmacy opens up close by to us. The drugs in our doctors bags are not suitable in the case of someone needing blood pressure medications, respiratory medication, heart medication, antibiotics, pain medications, etc.

5. Dr Chhaya insists the pharmacies in the wider Logan area (most obviously the pharmacies operated by the joined parties) do not provide an adequate service to meet the needs of his patients. He pressed his application on the basis that it was necessary to promote patient safety and convenience.

6. Dr Chhaya appears to have developed a loyal following amongst his patients. A number of them were on hand to offer their endorsement of Dr Chhaya and his proposal to offer a range of pharmaceutical benefits when I visited the area with the parties to conduct a view. He has been collecting signatures on a petition calling for an approval to be granted. He also provided letters from patients explaining why they thought it was appropriate for Dr Chhaya and his colleagues to dispense PBS medicines from the two surgeries.

10.  There are four pharmacies in the local area conducted by the joined parties. All of the pharmacies currently provide pharmaceutical benefits to patients of the Pioneer Health Service practices. The pharmacies are:

·     Greenbank Pharmacy, which is located in the Greenbank Shopping Centre at the corner of Pub Lane and Teviot Rd, Greenbank. The shopping centre includes a Woolworths and other shops. It is located approximately 2.8 kilometres (or 3 minutes’ drive) from the applicant’s Greenbank practice, and just over 10 kilometres (or 9 minutes’ drive) from the Flagstone practice. The Greenbank pharmacy is owned by Greenbank Pharmacy Pty Ltd, which is controlled by Mr Ashwin Ratilal.

·     Boronia Heights Day and Night Pharmacy, which is located in the Boronia Park Shopping Centre, 90 Parklands Drive, Boronia Heights. That pharmacy is located about 5 kilometres (or 6 minutes’ drive) away from the Greenbank practice and around 17 kilometres (or 16 minutes’ drive) from the Flagstone practice. Mr Ratilal conducts the Boronia Heights pharmacy under his own name.

·     Jimboomba Day and Night Amcal Chempro Chemist. That pharmacy is located in the Jimboomba Shopping Centre on Cusack Lane at Jimboomba. It is operated by a partnership between Khen Ly and Michael Kan. It is situated around 15 kilometres (or 14 minutes’ drive) from the Greenbank practice and around 7 kilometres (or 7-9 minutes) from the Flagstone practice.

·     Jimboomba Amcal Chempro, which is situated in the Jimboomba Junction Shopping Centre on the opposite side of Cusack Lane at Jimboomba. This pharmacy is also conducted by Messrs Khen Ly and Michael Kan. Both pharmacies are roughly the same distance from the applicant’s practices.

11.  I had the opportunity to visit all four pharmacies during the course of a view (although I did not walk through the Greenbank Pharmacy). All four pharmacies appeared to offer a full range of services commonly provided by pharmacies. They also appeared to offer a standard range of medicines available under the Pharmaceutical Benefits Scheme. In the course of the view, I was able to develop an appreciation of the geography of the area serviced by the pharmacies and the distances between them and the applicant’s surgeries. Dr Chhaya was able to point out some of the more distant locations of his patients.

12.  Mr Ly and Mr Ratilal both provided statements for the hearing. Each was in similar form. Mr Ly’s statement confirmed his pharmacies commonly filled prescriptions for patients of the applicant’s Flagstone practice, while Mr Ratilal confirmed his pharmacies serviced the patients of the Greenbank practice. Both statements said the pharmacies were able:

·     to fill prescriptions for the patients of both surgeries on an ongoing basis; and

·     to provide a standard suite of medications for inclusion in the doctor’s emergency bag.

13.  Mr Ratilal said he offered to provide a free delivery service to the Greenbank practice, but the offer was rejected. He said he provided a delivery service direct to many customers of his pharmacies. Mr Ly said his pharmacies had offered to provide a delivery service to both of the applicant’s practices. He added the pharmacies currently offered a delivery service to customers in Jimboomba and its surrounding suburbs, and “any suburb between Jimboomba and Calamvale”, which include the immediate surrounds of both of the applicant’s practices.

14.  The statements also set out the opening hours of the pharmacies. The Greenbank and Boronia Heights pharmacies were open until 7pm on weekdays; so is one of the pharmacies in Jimboomba. All four pharmacies opened on the weekends. The applicant’s practices operated between 8.30am and 6pm on weekdays. 

15.  I am aware the parties had discussions during a break in the hearing about the possibility of the pharmacies providing additional support to Dr Chhaya so that he might carry more drugs in his doctor’s emergency bag. Those talks were unsuccessful and the hearing proceeded.

The legislation

16. Pharmacists usually seek approval for the supply of pharmaceutical benefits from a particular location under s 90 of the Act. Dr Chhaya’s application is made under s 92(1), which provides:

Where there is no pharmacist approved in respect of premises from which, in the opinion of the Secretary, a convenient and efficient pharmaceutical service may be supplied in a particular area and a medical practitioner is practising in that area, the Secretary may approve the medical practitioner for the purpose of supplying pharmaceutical benefits to persons in that area.

17.  It follows I must consider whether the pharmacies in question provide a convenient and efficient pharmaceutical service to the areas around the Flagstone and Greenbank medical practices.

18. The Secretary says I should keep the Pharmacy Location Rules in mind when I consider the meaning of the expression “convenient and efficient pharmaceutical service”. The Rules inform approvals under s 90. The Secretary argues that if the Rules would prevent another pharmacist from obtaining an approval to open in the area pursuant to s 90, there is, almost by definition, a convenient and efficient pharmaceutical service. 

19.  There may be something to that, but the hearing did not focus on the Pharmacy Location Rules. I do not think it is necessary to use the Rules as some sort of proxy in this case in any event. It seems to me the words “convenient and efficient pharmaceutical service” are reasonably clear, plain English words. They focus on the convenience of customers and the need for efficient pharmaceutical services. These twin objectives might pull in different directions. A service will undoubtedly be more convenient if it is close at hand and readily accessible by prospective users, but it will be more efficient if it is big enough to derive some economies of scale. The juxtaposition of these terms in the legislation reflects parliament’s intention that decision-makers undertake a balancing process when considering whether to grant an approval under s 92.

Do the existing pharmacies provide a convenient and efficient pharmaceutical service?

20.  There is no doubt patients in the area surrounding the Greenbank surgery enjoy a convenient and efficient pharmaceutical service. That service is principally provided by Greenbank Pharmacy and the Boronia Heights Day and Night Pharmacy. People who travel to the Greenbank practice mostly travel by car; they must drive themselves or be driven by friends or relatives. If a patient needs a script, he or she can drive the short distance to the Greenbank Pharmacy in particular. Having been driven between the surgery and the various pharmacies in the course of the view, I am satisfied the distances involved and the state of the roads should not be regarded as an obstacle. Alternatively, patients can wait for their medicines to be delivered to the surgery or perhaps take advantage of a home delivery service provided by Mr Ratilal, or even by Mr Ly and Mr Kan from their pharmacies in Jimboomba. Given most patients are already experiencing the inconvenience of travelling by car to reach the surgery, I do not see how they are inconvenienced by the need to extend their trip and drive to the Greenbank pharmacy which is co-located with a number of major shops.

21.  The pharmaceutical service provided to patients who are in the area around the Flagstone practice is less convenient than that available to individuals in the area around the Greenbank practice. The Flagstone location is more remote from the pharmacies. But the distances are still not great and the road network is of an acceptable standard. Given the vast majority of patients would have to drive to get to the Flagstone practice, the additional burden of driving to the Greenbank Pharmacy or either pharmacy in Jimboomba is not as great as to suggest the pharmaceutical service is inconvenient. Moreover, both pharmacies offer home delivery services and offer to deliver to the surgery.

22.  Dr Chhaya said he was also concerned about what might happen when a patient arrived at either surgery in the midst of an acute episode like anaphylactic shock. He said in that event he needed to administer medication in a hurry and the pharmacy could not provide it quickly enough given the distance. He said that was a particular risk where ambulance services might not be readily available. I accept that may be an issue but it is the same issue that faces every doctor whose surgery is not located immediately alongside a pharmacy. While I have some sympathy for Dr Chhaya’s concerns over the adequacy of the contents of his doctor’s emergency bag, it turns out a number of the medications he said were essential (including aspirin and paracetamol) are readily available. Once again, Dr Chhaya’s position is no different to any doctor conducting a house-call. (Dr Chhaya’s submissions do raise questions over whether doctors should be equipped with a wider range of drugs in more remote locations, but that is probably a matter to be worked out in discussions between public health officials and professional groups.)

23.  I would add that permitting Dr Chhaya to dispense medicines through his practice might actually undermine the efficiency (if not the convenience) of the pharmaceutical services in the area. Pharmacies enjoy a measure of protection from competition. The (admittedly controversial) rationale behind that legislative policy is to ensure that pharmacies are sufficiently robust and profitable to allow them to provide a proper community service – which includes activities like home deliveries and the provision of doctors’ emergency bags. (I would add another incidental effect would be to confer a competitive advantage on Dr Chhaya compared to other medical practitioners that might consider establishing a practice in the local area. However, strictly speaking, the potential for an anti-competitive impact on the market for medical practitioners is irrelevant to this discussion. )

Conclusion

24.  I am satisfied the four pharmacies operated by the joined parties provide a convenient and efficient pharmaceutical service to the area surrounding the Greenbank and Flagstone surgeries conducted by the applicant. The decision under review is affirmed.

I certify that the preceding 24 (twenty-four) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

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Associate

Dated 23 December 2015

Date of hearing

16 July, 17 July 2015

Applicant

In person

Solicitors for the Respondent

Solicitors for the Joined Parties

Mr A Dillon and Mr B Dean, Australian Government Solicitors

Mr S Holzberger and Ms L Cresser, Gadens