HSE’s refusal to enter contract with Dublin pharmacy lawful, court finds

A company has lost its challenge over the HSE’s refusal to enter into a community pharmacy contract (CPC) with it for a pharmacy on Dublin’s northside.

The HSE last April refused the application by Darastream Ltd for a CPC for Smith's Pharmacy at Quarry Road, Cabra, in light of inquiries by it, including whether there was claiming on the double for prescriptions, at two other Smith pharmacies operated by companies with the same beneficial ownership as Darastream.

In his judgment on Friday, Mr Justice Garret Simons ruled the HSE has a discretion, not a "duty", under the Health Act, to enter into a CPC with any individual pharmacist and its approach was lawful.

The HSE was entitled to have regard to matters including financial probity and professional qualifications of the party seeking to enter a contract with it and to the fact all three pharmacies would have the same superintendent pharmacist, he also held.

Without preempting the results of the HSE’s inquiries, it was sufficient to note the issues raised, if correct, are “serious matters” and could lawfully ground a decision to refuse to enter into a CPC agreement, he said.

Darastream, whose directors are Jack and Mary McPolin, was informed by the HSE last April the contract was not being awarded due to inquiries concerning two other pharmacies operated by different companies beneficially owned by Jack McPolin. Those inquiries were being carried out under both companies CPCs.

The other two pharmacies are the Fair Street Pharmacy, trading as Smith's Pharmacy, Main Street, Blanchardstown, and Lynnmoy Ltd, trading as Smith's Pharmacy, North Circular Road, Dublin.

The HSE’s concerns include alleged failure to maintain records, inducements to order medicines and duplicate cross pharmacy claims where multiple claims were entered for the same people in different pharmacies.

The HSE noted Mr McPolin was the superintendent pharmacist for the two pharmacies and was to be the superintendent pharmacist for the Cabra pharmacy.

Darastream, among various claims, argued the HSE’s refusal was unjust, irrational and lacking in proportionality.

The HSE denied the claims.

In his judgment, Mr Justice Simons said the HSE has broad discretion, under Section 59 of the Health Act relating to provision of community pharmacy services, to ensure it uses resources available to it in the most beneficial, effective and efficient manner.

The HSE’s duty is to eligible recipients of the service and is to ensure the supply of drugs, medicines and health appliances, he said.

To discharge that duty, the HSE had a corresponding “power” to enter into contractual arrangements with individual pharmacists. That did not give rise to some form of duty in favour of individual pharmacists and “no such duty exists”.

The HSE must be entitled to have regard to the fact other pharmacies with the same beneficial ownership are under inquiry pursuant to their CPC contracts, he also said.

He noted the HSE had proposed to defer its decision whether to issue a CPC for the Cabra pharmacy until its inquiries were concluded and only made the disputed refusal decision after the applicant insisted a decision be made in advance.

The HSE had also said, subject to the outcome of its inquiries, it was open to considering any future application by Darastream. The HSE’s approach was lawful, he ruled.