Supreme Court cancels limit on opening pharmacies

Photo: Jassu Hertsmann

Supreme Court decision, yesterday, to declare the current limit on establishing pharmacies (Medicinal Products Act § 42¹ subsection 1–3) as contradictory to constitution is a victory for Chancellor of Justice Indrek Teder and a defeat for Estonian Pharmacists Association, Estonian Pharmacists Union, and medicine wholesalers – these three interest groups have most forcefully fought against cancellation of the limits.

Voting 13 for and 4 against, Supreme Court ruled unconstitutionality of the limit. Prompt joint declaration by pharmacists union and association revealed frustration in hearts of both: «The Supreme Court decision is hostile to patients. Pressure to raise medicine prices. Wave of bankruptcies. Demise of rural pharmacies. Medicine safety problems.» The same levels of criticism were expressed by representatives of two leading medicine wholesalers, Magnum Medical and Tamro.

Still, nothing will happen immediately, even Supreme Court granted six months for the judgement to enter into force. Even the main issue of the debates – what to do that village pharmacies would not disappear and that medicines would be within reach of all in Estonia – has not been solved. As also stated by Supreme Court.

According to court ruling, the current measure (limit to establishing pharmacies) simply violated the constitutional freedom of enterprise and failed, in seven years, to halt the bleeding of rural pharmacies. Says Chief Justice of the Supreme Court Priit Pikamäe: «In essence, the market was locked up.»

Thus, the main reasons for abovementioned ruling were disproportionality and failure to achieve goal; even so, there are several other nuances to consider.

«For instance, as a young dispensing chemist graduates from university, will he be able to establish a pharmacy of his own?» asked Mr Pikamäe.

The court ruling means not that state should not regulate the pharmacy market nor pass laws to enhance availability of medicines in rural settlements.

What happens next? It would be naive to think that for six months after yesterday’s judgement nothing at all will happen, and then, all of a sudden, the market would be wide open with full freedom to establish pharmacies everywhere. First and foremost, what follows is up to Riigikogu social committee and Ministry of Social Affairs.

Coalition politicians interviewed, both from Reform Party and IRL, were rather positive about the Supreme Court decision. This would not mean that they all agreed, tidying up the pharmacy market being among such issues where absolutely opposite views may be found within both parties.

Even so, the ruling at least brought clarity in one issue and took a long-debated topic off the agenda. According to Riigikogu social committee head Margus Tsahkna, committee and social ministry have been dealing with the same issues for almost a year. He lists a string of proposals tabled at the moment, in one shape or another. 

Internet Pharmacies. Pharmacy Bus. Direct subsidies to rural pharmacies. Stop to casting lots for pharmacy operating licence. Support fund for dispensing chemists and pharmacies in rural areas. A proposal that, should somebody desire to operate a pharmacy at a profitable city spot, they would therewith be obliged to establish a pharmacy in some less inhabited area i.e. support a less profitable pharmacy on account of the prosperous one. Allowing sales of (some) over-the-counter medicines in ordinary shops – the so-called medicine counters in gas stations and grocery stores. Granting rural pharmacies spaces in family doctor centres established with EU money. Assignment support for dispensing chemists. Giving pharmacies-pharmacists the rights of first contact health care institutions. Specifying quality requirements for pharmacies.

All these vastly differing proposals ponder the options of what to do with the Estonian pharmacy market. Some of them (such as Internet pharmacy) have already entered into force; some remain in the bright idea category.

Mr Tsahkna mentions the popular proposal to subsidise rural pharmacies. This is supported by all interest groups; even so, there is no overview of how pharmacies are currently subsidized. There are the occasional examples, often based on media reports, that certain communes let pharmacies use spaces for free – but there’s no analysis.

«We have ordered a research; one this is completed, the picture should be clearer,» says Mr Tsahkna.

In all probability, casting lots between those wishing to open pharmacies will go – regarding this, there is an overall agreement: this is quite a fiasco.

Some other proposals, however, are still being bitterly resisted. For instance: Estonian pharmacists and their associations strongly oppose Finland-style medicine stands at stores and gas stations offering a limited variety of over-the-counter drugs. Will the politicians dare proceed? One wonders...

It also needs to be considered that some seemingly proper proposals may fail to produce desired results. Nice indeed to declare: let’s specify and raise quality requirements for pharmacies – who would object? Nevertheless, might this not backfire on the backwoods pharmacies, being weaker financially?

Finally: in the heat of emotions, pros and cons, and political calculations, let’s not forget a few down to earth things. Firstly, Estonian demographics have changed and will keep changing. With the villages emptying up and the ranks of medicine-buyers thinning, no political or legal trick will stop pharmacies from becoming scarcer. Should rural pharmacies be viewed as a social policy goal, good indeed would it be to keep their numbers stable.

Secondly, Estonian pharmacy market has been clearly crystallised. Two groups do dominate both retail and wholesale, so let’s not wish for fast track change. Perhaps somebody will be added – the Finnish-owned Ülikooli Apteek (University Pharmacy) has shown interest towards expanding in Estonia – but revolution is unlikely.