Clicks announces plan to offload ‘medicine factory’ Unicorn

The Clicks Group is offloading its entire shareholding in Unicorn Pharmaceuticals, with the sale of the manufacturing company expected to be completed by the end of July.

The pharmacy chain — South Africa’s biggest, with 470 outlets across the country — was forced to relinquish its stake in Unicorn after a Constitutional Court loss against the Independent Community Pharmacy Association (ICPA).

The sale of Unicorn Pharmaceuticals will see the end of a longstanding battle to end Clicks’ beneficial interest in the manufacturing company.

The ICPA first complained to the Department of Health in May 2016 about the issue. It then took Clicks to court after accusing it of violating the Pharmacy Act and regulations that prohibit manufacturers from having a direct or indirect beneficial interest in a retail pharmacy to ensure that pharmacists do not have a vested interest in the medicines they dispense or recommend.

Clicks Group subsidiary, New Clicks, owns all the shares in Unicorn.

Unicorn produces about 40 generic medicines. Its products had been “sectioned off” for Clicks pharmacies, so independent pharmacists were unable to dispense them. For patients who had been stabilised on a Unicorn (or other specific) product, that meant that only a Clicks pharmacy could dispense their medication.

‘Unethical’

The ICPA, which represents 1,200 independently owned community pharmacies – with about 3,500 pharmacists and 20,000 supporting staff – told Daily Maverick last year that pharmacists at Clicks had been incentivised to prescribe their “own” in-house medication, which was unethical.

“When a pharmacist dispenses a script, all they should look at is what the doctor has prescribed and [whether there is] a less expensive generic substitute. Those should be the only considerations. It should not be about whether I am going to be incentivised or am I going to be appraised on what I dispense?” explained the association’s CEO, Jackie Maimin.

In a Sens update on Monday, Clicks said after the Constitutional Court judgment in March 2023, the matter had been referred to the director-general of the health department to determine sanctions.

“As part of a constructive engagement process with the Director-General and the DoH, Clicks Group proposed to regularise its position by the group divesting of its total shareholding in the manufacturing pharmacy, Unicorn Pharmaceuticals (Pty) Ltd. The Director-General accepted this proposal on 27 June 2024.”

Resolution ‘welcomed’

Clicks Group CEO Bertina Engelbrecht has welcomed the resolution of the issue: “The completion of the Unicorn disposal will pave the way for the DoH 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.”

The health department informed Clicks in May last year that no new retail pharmacy licence applications could be processed until the DG was satisfied that the Clicks Group was in compliance with the Constitutional Court judgment.

Clicks launched its 900th store in February. Over the past year, it opened 41 new stores and 27 pharmacies, bringing its national pharmacy presence to 718.

The group has earmarked nearly R1-billion for capital investment this year and is aiming to open between 50 and 55 new stores – an increase from its previous target of 40-50 new stores per year.

The group wants to expand its footprint to 1,200 stores, with a pharmacy in every location. DM

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