Pharmacy Services Agreement 2010 Guide for Guild members

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confidential – for guild members onlyVariation and renewal of the Agreement (Part L)The Agreement provides for two types of Agreement variations; those resulting from mutual agreement (voluntary) andthose resulting from a Crown Directive or a law change (compulsory).The DHBs acknowledge the importance of continuing to fund pharmacy services but this is not a guarantee they will enterinto a future agreement with a particular pharmacy.L3: Variation after review Either party may initiate a review of any aspect of the Agreement if there are any changes tothe funding available to the DHB, government pharmaceutical policy, the services pharmaciesare required to provide, or both parties agree exceptional circumstances apply.L4: Procedure for CompulsoryVariationA review is conducted by providing the other party with a written notice identifying theconcern and proposing a variation to resolve it. The other party has 20 business days toaccept or reject the proposal or make a counter proposal. If agreement is not reached, theAgreement continues in force.Compulsory variations will be written in a way to minimise any adverse effect on thepharmacy. The procedure for a compulsory variation involves the DHB providing a proposeddraft, the pharmacy having at least 10 days to comment after which the parties will try toreach agreement on the terms of the variation. If agreement cannot be reached, the PSA willbe varied on the terms originally proposed.A pharmacy may stop providing any service affected by a compulsory variation with sixmonths notice. If the service becomes non-viable after the variation, a shorter but reasonableperiod of notice may be given. Pharmacies should note that if they withdraw from a serviceon viability grounds the DHB may seek a solvency certificate or a solvency audit (clause J3).L5: Group negotiation Where a pharmacy initiates a voluntary variation the DHB may decide to negotiate thevariation with other pharmacies it thinks might also take up the variation. This negotiationmight be conducted in a group setting rather than individually.Pharmacies initiating a variation covering a service they have developed should protect anyunique intellectual property involved before initiating the review.Pharmacies asked to take part in a group negotiation should seek legal advice on theirposition under the Commerce Act before agreeing to participate.PAGE 28
confidential – for – for guild guild members only onlyDealings with third parties (Part M)This section of the Agreement pulls together the provisions involving the pharmacy’s links with other organisations andproviders, covering subcontracting relationships, assignment of the PSA, confidentiality and incentives to prescribers.Doctors face similar prohibitions on giving or accepting incentives.M2: Subcontracting Pharmacies are entitled to subcontract the provision of any aspect of the provision of servicesbut must first obtain the written agreement of the DHB. Similarly, a subcontractor may notfurther subcontract the service in question or assign the subcontract to another party withoutthe DHB’s written agreement.The pharmacy must ensure the subcontract will allow the pharmacy to honour all itsobligations with the DHB. For instance, the subcontractor is subject to the same requirementsas the pharmacy for information provision and audit.M4.1: No transfer withoutconsentM6; Incentives andinducements to prescribersIf asked, the pharmacy must give the auditor a copy of the subcontract. However, the auditormust not disclose any financial arrangements from the subcontract to the DHB. The auditor isable to advise the DHB if they consider aspects of the subcontract may prejudice thepharmacy’s ability to meet its Service Agreement template obligations.You may not assign or transfer any of your obligations under the Agreement without the priorwritten consent of your DHB. This includes the sale or disposal of any majority ownership orcontrol of your business.DHBs will not unreasonably withhold consent.Pharmacies must comply with section 9.7 of the Code of Ethics. If a pharmacy breaches thisrequirement to not offer inducements to prescribers, the DHB would be able to laycomplaints with the Council against the Charge Pharmacist and the pharmacist owner.Miscellaneous terms (Part N)This section pulls together a variety of Agreement matters not conveniently situated elsewhere. Members should reviewthe section and particularly familiarise themselves with the requirement for appropriate insurance and the rules governinghow notices must be delivered and when they become effective.N4: Warranty Both parties warrant they will provide accurate information to the other. Pharmacies shouldnote sub clause 4.2 ensures this warranty remains active throughout the life of theAgreement.N7: Entire Agreement There should be no agreements between you and your DHB that are not included in your PSA.Check Part P carefully to make sure all your dealings with your DHB are contained therein.In addition, we advise if you intend to sign this Agreement, you should also sign and attachthe side letter regarding the Date of Dispensing definition to the PSA. This will further solidifythe standing of the side letter.PAGE 29
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Pharmacy Services Agreement 2010 Guide for Guild members

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