Clicks Group is to dispose of its shareholding in its pharmaceutical manufacturing subsidiary Unicorn Pharmaceuticals, and is confident the sale will be completed by the end of July.
The move follows the judgment by the Constitutional Court in March 2023 in the case of the Independent Community Pharmacy Association vs Clicks Group and the referral to the director-general of the department of health to determine sanction.
As part of a constructive engagement process with the director-general and the department of health, Clicks proposed to regularise its position by the group divesting of its total shareholding in Unicorn Pharmaceuticals. The director-general accepted this proposal on June 27, Clicks said in a statement on Monday.
Clicks CEO Bertina Englebrecht welcomed the resolution of the protracted legal process and acknowledged the role of the director-general, the department of health and its legal advisers and their positive engagement in ensuring a sustainable solution for all stakeholders.
The department advised Clicks in May 2023 that no new retail pharmacy licence applications could be processed until the director-general was satisfied that the Clicks was in compliance with the Constitutional Court judgment.
“The completion of the Unicorn disposal will pave the way for the department of health to issue outstanding and new pharmacy licences. This will support the continued growth and expansion of the Clicks pharmacy network in providing high quality, affordable and accessible healthcare to an increasing number of South Africans,” Engelbrecht said.
Business Day reported previously that independent pharmacies won their seven-year battle against Clicks over its ownership of both pharmacies and a drug manufacturer, after the Constitutional Court ruled the company had contravened regulations to the Pharmacy Act.
he 5-4 majority judgment created a headache for Clicks, as it reinstated a previous High Court ruling instructing the department of health to determine how to sanction the company, and raises the prospect that it may need to sell off its pharmaceutical manufacturing subsidiary, Unicorn. While Unicorn is not a material contributor to Clicks’ operations, divestiture could affect its profit margins.
The Constitutional Court emphasised that while the department of health had the power to withdraw Clicks’ pharmacy licences or close the pharmacies down, such action would be “very drastic”. It suggested the department might give Clicks an opportunity to regularise the situation by divesting itself of Unicorn.
The Independent Community Pharmacy Association launched its challenge against Clicks in 2016, arguing its corporate structure created a conflict of interest, since its pharmacists had an incentive to recommend medicines sold by another subsidiary in the group.
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