On September 8th, 2023, the President signed the act to amend the act on State Treasury-guaranteed export insurance and some other laws. This act notably changes pharmaceutical law with respect to pharmacy regulations (“AdA 2.0.”)
Upon signing the act, the President announced that he would submit an application to the Constitutional Tribunal for an assessment of the compliance of these new pharmacy regulations with the Polish Constitution.
On September 13th, 2023, the act was published in the Journal of Laws, meaning that the discussed regulations will come into effect 14 days after the announcement, i.e., on September 28th, 2023.
From that day on, any unauthorized takeover of control over entities running pharmacies against the limits introduced into the Pharmaceutical Law would now bring negative consequences.
The main goal of AdA 2.0. is to “tighten up” the amendment of pharmaceutical law from 2017 i.e. so-called ‘Pharmacy for Pharmacists’. The new regulations are causing significant concern among pharmacy entrepreneurs, organizers of pharmacy networks and pharmacists. This new regulation introduces far-reaching limitations in the pharmaceutical market and will result in the blocking of planned and future transactions on this market and the stagnation of its many players.
AdA 2.0. assumes that:
– After the new regulations take effect, control under the law of the protection of competition and consumers over the entity running a public pharmacy may only be assumed by either a pharmacist or a pharmacist partnership, provided that the person or entity taking control owns no more than 4 pharmacies and does not belong to a capital group that owns more than 4 pharmacies.
– Unauthorized takeover of control does not apply if the takeover resulted from inheritance.
– In the case of a takeover by entities other than the above or in violation of the 4 pharmacy limit, the pharmaceutical inspection will be required to revoke licenses for public pharmacies owned by the takeover entity. The inspection will revoke as many licenses as necessary to meet the 4 pharmacy limit. The decision is made based on the situation at the time of takeover.
– Moreover, those taking control against the aforementioned rules run the risk of a financial penalty ranging from 50 000 to 5 000 000 PLN.
The effects of ‘Pharmacy for Pharmacists 2.0?’:
The impact of these new regulations will be noticeable across many aspects of the pharmaceutical market, these include:
– Limiting the ability of current pharmacy owners to sell their business on market terms. The project means that buyers have to meet stringent regulatory requirements.
– Blocking the takeover of a pharmacy company by a person without a pharmacy education or a pharmacist who already owns 4 pharmacies, this includes permissions issued before the 2017 amendment.
– May make it more difficult to operate pharmacies as franchises or partnerships and the search for alternative business models.
– It will contribute to changing pharmacy values, as well as the elimination of jobs associated with the need to close pharmacies (or withdrawal of their licenses by supervisory authorities).
From the perspective of wholesale trade entities, the implementation of AdA 2.0. and its associated new restrictions will lead to:
– A deepening downward trend in the number of pharmacies in Poland. The trend related to the decrease in the number of pharmacies in Poland has been ongoing since 2017.
– Consolidation of the wholesale market, and as a result, an increase in drug prices, a gradual loss of Polish patients’ pharmaceutical safety, and a competitive advantage for wholesalers in negotiating trading conditions with public pharmacies.
The real threats associated with the implementation of AdA 2.0. include patients’ concerns about:
– Rising drug prices and their limited availability for patients as a result of pharmacy closures.
– More difficult access to pharmacies and the services they provide (especially for elderly, disabled patients who regard the “proximity” of the pharmacy as essential).
– A blockage in the development of recently introduced pharmaceutical care and the development of pharmaceutical services.
As far as the impact of AdA 2.0. on supervisory authorities:
– The Pharmaceutical Inspection will not gain additional competence to investigate historical transactions that were conducted before the law came into effect.
– AdA 2.0. will apply only to transactions which will be made after the day the law comes into effect.
– Despite the above, we can expect an intensification of actions by supervisory authorities questioning franchise systems, including control proceedings.
Is there a chance to abolish the powers of the new regulations?
As the President announced the submission to the Constitutional Tribunal of a request for an assessment of the compliance of art. 2 of the discussed law with the Constitution of Poland, there is a chance to appeal against the enforcement of the new regulations.
The Constitutional Tribunal, in particular, will be able to question the discussed regulations due to their proceduring mode (as part of the so-called “political sideline” without properly conducted social consultations) and due to the substantive inconsistency of the law with the standards defined in the Constitution of Poland.
In such a situation, the appropriate bodies, including the Pharmaceutical Inspection, will be obliged to refrain from enforcing it. At the same time, the legislator will be obliged to comply with the TK verdict through appropriate legislative changes.
