Kiik on Linnamäe warning: Entrepreneurs are free to turn to court

Minister of Social Affairs Tanel Kiik (Center).
Minister of Social Affairs Tanel Kiik (Center). Source: ERR

Minister of Social Affairs Tanel Kiik (Center Party) said in response to the threat of owner of pharmaceuticals wholesaler Magnum Margus Linnamäe to seek damages for the expropriation of pharmacies that every entrepreneurs is free to go to court, while pharmacy chains have had five years to address the issue.

Kiik told ERR that the laws mandating the pharmacy reform have been in effect for the past five years, which is also the length of the transitional period afforded market participants that will end on April 1 this year.

"Pharmaceutical wholesalers and owners of pharmacy chains have had the choice of whether to try and sell pharmacies after the reform was passed, in 2015, 2016 etc., or whether to wait and keep turning a profit for five years and then try to sell around 300 pharmacies in a matter of a few months for a competitive price, which, let's be honest, is not realistic," the minister said.

Kiik explained that the number of dispensing pharmacists is limited, whereas it is sensible for pharmacists to wait for existing pharmacies to close shop and open new ones as it is usually cheaper than buying an existing pharmacy the price of which depends on turnover and profit. It also lends pharmacists confidence when negotiating prices as owners know their right to operate pharmacies is about the expire.

As concerns the damages claim, Kiik said that such matters are not up to the social ministry but legal experts to address.

"Of course, every entrepreneur has the option and legal right to turn to court to protect their interests if they feel legislation has wronged them. However, as social minister, I will not be assessing the validity or likelihood of success of such claims," he added.

Kiik noted that implementing provisions of the law could have been put together sooner, while it is possible the previous government would not have had greater consensus in that regard because the state will not be buying pharmacies or introducing financial measures. According to Kiik, the market was supposed to gradually become organized as a result of agreements between pharmacists and current owners of pharmacies.

"The state has not sought to expropriate, buy up pharmacies or take other such measures. That has not been the aim of the pharmacy reform," he said.

Looking at recent comments and the statement from the owners of the Euroapteek chain on Thursday, Kiik said it is clear that the majority of market participants plan to stay in business and talk of mass closures of pharmacies do not work as a way to intimidate people.

Legal disputes and dissatisfaction with the reform have been a long time coming, while it was the goal of the legislator to curb the influence of wholesalers on the pharmacy market through the ownership restriction, according to which pharmacies should be owned by pharmacists and wholesalers concentrate on their field, as is the case in many other EU countries.

Margus Linnamäe said on Friday that he will surrender Terve Pere Apteek OÜ pharmacies that operate under the Apotheka name to pharmacists who work there after the reform enters into force on April 1 but added that he will seek damages from the state for expropriation, with the volume of the claim to be determined by legal experts.

The Riigikogu Social Affairs Committee is set to discuss the various pharmacy reform bills next week.


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Editor: Marcus Turovski

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