Cape Town - The Supreme Court of Appeal (SCA) has upheld, with costs, an appeal against a decision of the Western Cape High Court on whether the Clicks Group had contravened the Pharmacy Act by owning a drug-making facility.
The Clicks Group owns 100% of Clicks Retail, a chain of more than 500 pharmacies as well as Unicorn Manufacturing, which falls under a subsidiary, New Clicks.
In June last year the high court ruled against Clicks in its four-year legal battle with the Independent Community Pharmacy Association, which represents independent pharmacies.
In that case, Judge Frederick Sievers ruled: “An entity having interests in both types of pharmacies would gain financially if the manufacturing pharmacy’s products are promoted by the pharmacists in the community pharmacies over others.
“This would result in consumers not getting the best quality product at the best price. Products which are not strictly needed might be recommended and sold.”
As Clicks launched its appeal at the SCA, group chief executive Vikesh Ramsunder said Unicorn Pharmaceuticals’ manufacturing licence does not allow the company to manufacture any medicines, but only to import and export medicines.
The SCA found that the structure of the Clicks Group represented separate and different juristic persons.
New Clicks has no beneficial interest or control of the assets of the retailing subsidiary, Retailers, whose assets are mainly Clicks Pharmacies. Consequently, New Clicks cannot exercise the rights that derive from Retailers’ community pharmacy licence.
The SCA said that it was equally incorrect to contend that because New Clicks holds shares in Unicorn or Retailers, they have a beneficial interest in the underlying pharmacies owned by them.
However, writing the dissenting judgment, Appeal Judge Tati Makgoka said the fact that the assets of a company do not belong to the shareholders, does not necessarily mean that the shareholders do not have an interest in them.
His conclusion was that the Clicks corporate structure contravenes the act through the beneficial interests of Clicks Investments and New Clicks in both community pharmacies and the manufacturing pharmacy.