Pharmacy ownership rules in British Columbia

A pharmacy in British Columbia is not owned the way an ordinary shop is. The Pharmacy Operations and Drug Scheduling Act sets who may own one, and the College of Pharmacists of British Columbia runs the licensing. Both look past the company named on the licence to the people behind it. This guide describes what the Act and the College say about owners, eligibility and a change of ownership. Other provinces run their own regimes, so none of it should be carried to a pharmacy elsewhere. It describes the rules and does not advise on any transaction.

Direct owners and indirect owners

The Act defines a direct owner as the owner of a pharmacy, other than an indirect owner. The College explains who the indirect owners are. For a non-publicly traded corporation they include its directors, officers and shareholders. If a shareholder is itself a non-publicly traded corporation incorporated in BC, that shareholder’s directors, officers and shareholders are also indirect owners. For a publicly traded corporation, the indirect owners are its directors and officers. Section 5(2) of the Act lists who may be a direct owner, including a licensee or a partnership of licensees, and a corporation incorporated under the Company Act or the Business Corporations Act in which a majority of the directors are licensees. The Act puts duties on direct owners, indirect owners and the manager alike, so a buyer’s whole ownership chain is in view, not only the company that signs.

Who may not own

The Act says that, except as permitted under the regulations, a person authorized by an enactment to prescribe drugs must not be a direct owner or an indirect owner. A buyer group that includes a prescriber therefore has a question to settle before anything is signed: does the regulation permit that holding? The Act and its regulations are the place to read the exceptions, and the College is the body to ask. Do not assume a minority stake or a silent role avoids the rule.

Eligibility to hold a licence

Under section 3 of the Act, a direct owner is eligible to hold a pharmacy licence if the ownership complies with section 5 and the bylaws, the manager is a licensee who will have responsibility for the actual management and operation of the pharmacy, and none of the circumstances listed in section 3(2) applies to any direct owner, indirect owner or manager. The College sets out those circumstances. Those that section 3(2) of the Pharmacy Operations and Drug Scheduling Act limits to the previous six years include a Criminal Code conviction, a court judgment tied to commercial activity in drugs or devices, a suspended or cancelled registration with listed bodies, and limits or conditions imposed after discipline. A disciplinary limitation that precludes someone from being a direct owner, indirect owner or manager is also listed, as is a current or previous order or conviction for an information or billing contravention. On a referral from the registrar, section 4 lets the application committee issue a licence with conditions, and in limited cases despite some of the listed circumstances.

A change of direct owner

The College says a change of direct owner occurs when the corporation that owns the pharmacy changes, and the new owner will have a new BC incorporation number. An amalgamation is included. Under section 6(1)(c) of the Act, the pharmacy licence is cancelled when the direct owner changes. The College says the authorized representative of the new direct owner must apply at least 30 days before the effective date. The package includes the application form and fee, a Form 5 proof-of-eligibility attestation from each indirect owner and from the manager on the effective date, and a business licence naming the pharmacy, the new direct owner and the address. If no business licence is required, the College asks for written confirmation from the jurisdiction.

A change of indirect owner

When the directors, officers or shareholders of a non-publicly traded BC corporation change, or the directors or officers of a publicly traded one, the College treats it as a change of indirect owner. An authorized representative of the direct owner files it through the ownership portal on the College’s eServices, no later than 7 days before the effective date. The Act also requires direct and indirect owners to give the registrar written notice, within the prescribed period, if the direct owner or an indirect owner of the pharmacy changes. Which route a deal falls into depends on how it is structured, so put the structure to the College before choosing one.

Attestations and criminal record history

The College says attestation for a change of direct owner is completed on the paper form by all direct and indirect owners and filed with the application. For a change of indirect owner or of manager it is completed electronically. On a change of direct owner, once the College has processed and approved the application requirements, the indirect owners and the manager receive instructions to complete a criminal record history, if one has not been completed within the past five years. A person who cannot give an attestation completes Form 6 as well. Start these early, because every named person has to act.

• Which of our people count as indirect owners, and who will sign Form 5 for each?
• Does the structure make this a change of direct owner or of indirect owner, and what is the filing date for each?
• Does any buyer, director or shareholder hold a prescribing authorization that the regulation would not permit?
• Has any named person had a conviction, judgment, suspension or discipline within the six-year window in section 3(2) of the Pharmacy Operations and Drug Scheduling Act?
• Is the pharmacy manager changing at the same time, and does that need its own application?

The pharmacy’s other filings run alongside this one. See licences and permits in a BC business sale for the wider picture and pharmacy due diligence for what a buyer reviews before closing.