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Does your pharmacy need a compounding and repackaging license?

December 14, 2010

If your pharmacy provides compounding and repackaging services to other pharmacies, then your pharmacy requires a compounding and repackaging license. 

Section 5(3) under the Pharmacy and Drug Act provides: 

5(3) A compounding and repackaging pharmacy licence authorizes the provision of compounding and repackaging pharmacy services from a compounding and repackaging pharmacy that is the subject of the licence, but does not authorize the dispensing or selling of a drug to or for a patient unless the licensee also holds a community pharmacy licence.

If you have a compounding and repackaging license, then you must have a compounding and repackaging contract with each pharmacy for which you provide services. 

It has come to ACP’s attention that there may be pharmacies in Alberta who hold a compounding and repackaging license, but are not using the compounding and repackaging agreement approved by ACP council. 

A compounding and repackaging pharmacy must meet the requirements under the Pharmacy and Drug Act in relation to written agreements for compounding and repackaging services. Section 19 of the Pharmacy and Drug Regulation provides:

Contracts, compounding and repackaging pharmacies

19. A licensee of a compounding and repackaging pharmacy must 

(a) ensure that the compounding and repackaging pharmacy only provides pharmacy services to other pharmacies under the terms of written contracts that

(i) include the terms required by the council, and 
(ii) are in the form required by the registrar, and

(b) provide copies of those contracts to the registrar on request. 

Click here to find the Compounding and Repackaging Pharmacy Agreement that contains the terms required by council and is in a form that is acceptable to the registrar. You will note that both the licensee and owner must sign this agreement. This reflects the central role of the licensee in the control of the operations of a licensed pharmacy and the duty of the owner to respect that role. 

It is important for you to note that the content of this agreement, as approved by council, has been designed to ensure due attention to the Alberta regulatory scheme governing licensed pharmacies and the practice of pharmacy. The form is approved by the registrar so that contracts may, if necessary, be readily reviewed by the registrar to ensure compliance with council requirements. 

The agreement is focused on public safety and professional issues, not commercial Issues

The required content of this agreement is not designed to consider or protect your financial and commercial interests. The agreement contemplates that you will negotiate and agree upon all financial and commercial aspects of your contract. There is provision for inclusion of matters within the agreement that need to be agreed to by the parties, such as length of the term (Article 4.1) and length of period for remedying defaults (Article 5.5). Please note that the term cannot be less than 6 months. Also, please note that if the term of the agreement is longer than 3 years, there must be a review of the agreement on its third anniversary. 

You will note that Schedules A, B, D and E are blank. The parties will need to agree upon other commercial or general terms to be included after the parties negotiate the commercial aspects of their agreement. These may include, but are not limited to, matters such as the fee or price for the compounding and repackaging of drugs, terms of payment, security for payment, times for delivery, as well as general provisions that will better define or protect the rights or interests of the parties such as insurance and indemnity, provisions for arbitration and service of notices. 

You should seek your own legal counsel to assure yourself that: 

(a) you include all additional terms that you may require to protect your financial or commercial interests; and 

(b) the final form of your contract meets your needs, while ensuring that the requirements of council are included. 

Separate considerations for pharmacies that hold Health Canada establishment licences or narcotics dealers licences

This compounding and repackaging agreement is designed to meet the requirements of the Pharmacy and Drug Regulations in relation to compounding and repackaging pharmacies. Pharmacies that hold establishment licences or narcotics dealers licences, in addition to compounding and repackaging licences, may be able to modify Article 2.4 or Article 2.5, as the case may be, to reflect authority granted to them under those licences. Any such proposed changes should be referred to the registrar, with a copy of the applicable licence(s), so that the form of the change may be considered. 

Unique considerations for compounding and repackaging pharmacies that enter into agreements with institution pharmacies

The college recognizes that compounding and repackaging pharmacies may provide compounding and repackaging services to institution pharmacies. Under the terms of the Pharmacy and Drug Act, institution pharmacies that provide services only to the patients of the associated hospital, nursing home, institution, facility or centre, and do not bill third parties, are not required to be licensed. Some types of institution pharmacies, such as hospital pharmacies, may also be able to dispense drugs in response to standing orders. Hospital pharmacies may also be subject to different requirements in relation to controlling narcotics.

Accordingly, recognizing the special nature of institution pharmacies, the college is willing to consider proposed amendments to the agreement to accommodate: 

(a) the need to have someone other than a licensee sign the agreement on behalf of the institution pharmacy, while still ensuing proper pharmacist oversight in the context of the services sought and provided under the agreement; 

(b) the potential for the use of standing orders in appropriate cases; and 

(c) the potential that Article 2.5 may be amended, in appropriate cases, to recognize proper hospital processes in relation to narcotics. 

Before any changes are made to the form of the agreement to accommodate institution pharmacies, they must be approved by the registrar. If there are changes to the required content, council approval will be required.

Please submit any proposed changes in writing with your supporting rationale at least 30 days before the proposed effective date of your agreement.

Originally published in the December 14, 2010, issue of The Link