How to buy a pharmacy in Prince Edward Island: licences, ownership rules and what transfers

Prince Edward Island regulates pharmacies through a permit rather than a licence. The Pharmacy Act, R.S.P.E.I. 1988, c. P-6.1, says no person shall operate a pharmacy without a permit, and the PEI College of Pharmacy, through its Registrar and Council, issues and oversees it. A buyer should know that the College describes a newly acquired pharmacy as one that needs its own application, and that the Act places duties on both the permit holder and the managing pharmacist. This guide covers what the Act and the College say, and what to ask the seller.

A permit is required to operate

The Act says no person shall operate a pharmacy without a permit, and the College says that to operate a pharmacy in Prince Edward Island the pharmacy must have a permit issued by the PEI College of Pharmacy. The permit is what authorises the operation, so confirm with the seller exactly who holds it today. Section 10(6) of the Act says that, subject to subsections (7) and (8), a permit, including any endorsement on it, is not transferable; those subsections deal with a permit holder’s bankruptcy, insolvency or assignment, and with the death of a sole proprietor.

Applying for a newly acquired pharmacy

The College says individuals or corporations wanting to open a new or newly acquired pharmacy must complete the Retail Pharmacy Permit Application at least 30 days before the proposed opening date. Plan the application into your deal timetable, and ask the College whether it can be filed before the purchase agreement is final. Under section 8 of the Act, the Registrar shall inspect the pharmacy, or direct an inspector to inspect it, and if satisfied that the applicant and the pharmacy meet the prescribed requirements and the fee for the permit has been paid, the Registrar shall issue the permit. If the Registrar is not satisfied, the Registrar shall refer the application to the Council.

The managing pharmacist

The Act requires a permit holder to designate a pharmacist as the managing pharmacist for the pharmacy operated under the permit and to file a notice of the designation with the Registrar. A permit holder may not operate the pharmacy under the permit unless it has complied with that requirement and the pharmacy is operating under the managing pharmacist’s management. The Act also makes the permit holder and the managing pharmacist jointly and severally responsible for ensuring that the pharmacy is operated in compliance with the Act. A buyer who is not a pharmacist needs a managing pharmacist both able and willing to carry that responsibility.

Telling the College about the change

The College says a pharmacy owner or managing pharmacist must notify it whenever there is a planned or realized change in the pharmacy, and it lists a change in ownership or trade name of the pharmacy as one of those changes. Its page on changes also covers a permit holder who intends to cease operating and issue ownership to another individual or corporation: the College says that permit holder must notify it using the Closing a Pharmacy form at least 30 days before closing and follow its pharmacy closing procedure. The College adds that the new owner or permit holder is required to complete a new Retail Pharmacy Permit Application. Ask the seller whether that notice has been filed.

If the seller is insolvent

The Act requires a permit holder to promptly notify the Registrar if the permit holder becomes bankrupt or insolvent or makes an assignment for the benefit of creditors. It also contains an exception allowing a trustee in bankruptcy, liquidator or assignee to continue operating the pharmacy for a limited period, subject to conditions in the Act. If the seller is under financial strain, ask whether that notice has been filed, and have your lawyer read the exception before you rely on any arrangement with a trustee.

Federal rules that sit alongside

Health Canada says class exemptions under the federal Controlled Drugs and Substances Act could apply to people in a geographic area, such as a provincial class exemption, or to a profession, such as pharmacists. That is separate from Prince Edward Island’s permit. Ask your lawyer which federal permissions the pharmacy depends on and whether they attach to the business or to its pharmacists.

What to ask the seller for

• The current permit, showing the permit holder, and the notice naming the managing pharmacist.
• Confirmation of whether the managing pharmacist will stay and will accept responsibility under your ownership.
• Evidence that the College has been told of the planned change in ownership, including any Closing a Pharmacy form.
• The latest inspection results and any correspondence with the Registrar or Council about conditions on the permit.
• Written confirmation that the seller has not become bankrupt or insolvent or made an assignment for the benefit of creditors.

See our guide to buying a pharmacy in Canada for the wider buying process. If the buyer is a professional corporation, read about professional corporation ownership rules in Prince Edward Island, and see current listings on the pharmacies for sale page.