In a case where a pharmacist Gap applied for the establishment registration of a pharmacy under his/her name to operate the same pharmacy as he/she died while he/she operated the pharmacy that was registered as a pharmacist Eul, but the competent Mayor rejected the registration, the case holding that the above disposition was unlawful on the ground that the above pharmacy cannot be deemed as within the facilities or premises of the hospital because it constitutes an independent space separate from the hospital located in the same building.

In a case where a pharmacist Gap applied for the establishment registration of a pharmacy in his/her name to operate the same pharmacy as the former pharmacist Eul et al., and the former pharmacy died, but the competent mayor rejected the application for establishment registration of a pharmacy on the ground that the former pharmacy constitutes “cases within the facilities or premises of medical institutions” under Article 20(5)2 of the Pharmaceutical Affairs Act, the case held that the above pharmacy cannot be deemed unlawful on the ground that the above pharmacy was established by dividing or altering part of the facilities or the site of the hospital on the first floor of the building, and the above pharmacy cannot be deemed unlawful in light of all circumstances, including the following: (a) it is possible for the general public to use the entrance and exit of the hospital, which is an ancillary facility to enter the hospital in the above building; and (b) it does not need to use the outside entrance and exit of the hospital in the above building, which is an independent space separate from the hospital; and (c) the above pharmacy was already established before the hospital entered the hospital; and (d) it cannot be deemed unlawful.

Article 20 (5) 2 and 3 of the Pharmaceutical Affairs Act

Plaintiff (Law Firm Enhancement, Attorneys Fishing Incarceration et al., Counsel for the plaintiff-appellant)

Cheongju Market

May 9, 2013

1. The Defendant’s disposition of rejecting application for the establishment of a pharmacy against the Plaintiff on December 13, 2012 is revoked.

2. The costs of the lawsuit are assessed against the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. On June 30, 2008, the Plaintiff’s wife and the pharmacist Nonparty 1 (hereinafter “the deceased”) registered the opening of a pharmacy with the trade name “○○ pharmacy” (hereinafter “the instant pharmacy”), from the first floor No. 101 (hereinafter “the instant building”) of the ground-based building with the size of 651.7 square meters on the ground (location omitted) of Cheongju-si, Seo-gu (hereinafter “Yju-gu”). Since that time, the Plaintiff and the instant pharmacy were operated together with the Plaintiff, a pharmacist, and the instant pharmacy.

B. As the Deceased died on September 2, 2012, the Plaintiff filed an application for the registration of the establishment of a pharmacy with respect to the instant store to the Defendant for the purpose of continuing to operate the pharmacy as it was in the previous form of operation.

C. The Defendant determined that the instant store constitutes “where it is within the facility or premises of a medical institution” under Article 20(5)2 of the Pharmaceutical Affairs Act, and rejected the Plaintiff’s application for registration of the establishment of a pharmacy on December 13, 2012 (hereinafter “instant disposition”).

D. Accordingly, the Plaintiff filed an administrative appeal with the Chungcheongbuk-do Administrative Appeals Commission, but was ruled dismissed on February 22, 2013.

E. The Defendant added “a case where a pharmacy is established by dividing, altering, or repairing part of the facilities or site of a medical institution” to the grounds for the instant disposition through a written response from April 18, 2013 among the instant litigation.”

[Ground of recognition] Unsatisfy, Gap evidence 1 to Gap evidence 6 (if there are provisional numbers, including branch numbers; hereinafter the same shall apply), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The grounds under each subparagraph of Article 20(5) of the Pharmaceutical Affairs Act, which stipulates that a pharmacy establishment registration shall be refused, ought to be strictly and narrowly interpreted in consideration of the legislative purport such as the purpose of pharmaceutical distribution business, freedom of business guaranteed by the Constitution, guarantee of property rights, etc.

2) The instant pharmacy is completely divided into hospital and bearing wall located in the instant building, and is a separate space that does not share ancillary facilities, such as stairs and elevators, and thus does not fall under Article 20(5)2 of the Pharmaceutical Affairs Act.

3) Article 20(5)3 of the Pharmaceutical Affairs Act does not change the factual basis and add it to the grounds for disposal, and even if it is deemed that it can be added as the grounds for disposal of the household affairs, the instant pharmacy’s establishment registration was completed before the instant hospital entered the hospital, and thus does not fall under Article 20(5)3 of the same Act.

4) Therefore, the Defendant’s disposition that rejected the Plaintiff’s application for the establishment of the instant pharmacy by deeming that it falls under Article 20(5)2 or 3 of the Pharmaceutical Affairs Act is unlawful.

B. Relevant statutes

It is as shown in the attached Form.

C. Facts of recognition

1) The purpose of the instant building is, for part of the first floor with the instant pharmacy and retail store, Class I neighborhood living facilities. In the case of six floors, some detached houses and Class I neighborhood living facilities are part of the instant building, the remainder of the first floor, the second floor, the second to five floors, and the rooftop, each “△△△△ Youth Hospital” (hereinafter “instant hospital”).

2) The instant pharmacy is on the first floor of the instant building, with the glass walls, signboards, and the sole entrances to the side and India, and is divided into the instant hospital and bearing walls.

3) The instant hospital is a medical institution with 43 sick rooms and 88 sickbeds, and there is a separate entrance on the side of the entrance and exit of the instant pharmacy, which is distinguished from the entrance and exit of the instant pharmacy, and a entrance leading to the lower parking lot of the instant building.

4) At the time when the Deceased registered the establishment of the instant pharmacy on June 30, 2008, the building was still at the time when the instant hospital was not opened, and the instant store was sold to Nonparty 2 on October 19, 2012 by the Korea-U.S. Medical Foundation and currently owned by Nonparty 2.

[Ground of recognition] Facts without dispute, Gap evidence 7, Gap evidence 8, Eul evidence 3 to Eul evidence 5, or the purport of whole pleadings

D. Determination

1) Article 20(5)2 and 3 of the Pharmaceutical Affairs Act aims to fundamentally block collusion between a medical institution and a pharmacy by having a pharmacy in an independent place with a medical institution spatial and functionally independent to ensure that the medical institution and the outpatients are obliged to provide any medical aid in accordance with the principle of pharmaceutical medicine business (see Supreme Court Decision 2002Du1095, Dec. 12, 2003, etc.).

2) In determining whether a pharmacy is “the facility or premises of a medical institution” prohibited under Article 20(5)2 of the Pharmaceutical Affairs Act, the legislative intent of the aforementioned provision should be taken into account, in addition to the literal meaning thereof, to ensure that a pharmacy is established in an independent place from a medical institution spatial and functional perspective in order to ensure that it is obliged to provide out-of-patients of a medical institution in accordance with the principle of pharmaceutical business (see, e.g., Supreme Court Decision 2002Du1095, Dec. 12, 2003). Article 20(5)3 of the Pharmaceutical Affairs Act provides that “a pharmacy is established by dividing, altering or repairing part of the facility or premises of a medical institution” as one of the cases where the establishment of a pharmacy is not registered. The legislative intent of the aforementioned provision lies in cases where a pharmacy is considerably likely to be established with a medical institution in connection with a place between the medical institution and a pharmacy, and thus, it is extremely difficult to find out any act of collusion between the medical institution and the pharmacy at least 000 percent.”

3) However, inasmuch as each of the grounds under Article 20(5) of the Pharmaceutical Affairs Act may result in restricting the freedom of business and the exercise of property rights guaranteed by the Constitution, it is not allowed to expand and interpret the grounds for restriction solely on the ground that a medical institution located in the same building as a pharmacy or temporarily located in the same building as the previous one beyond the reasonable meaning of the language and text (see Supreme Court Decision 2009Du4265, Jun. 11, 2009).

4) In the instant case, the following circumstances can be acknowledged by comprehensively taking account of the overall purport of the Plaintiff’s oral argument as seen earlier: ① the instant pharmacy is on the first floor of the instant building; ② the general public who delivers the instant pharmacy front of the instant building or pass through the road with heavy glass windows, signboards and doors, can immediately recognize the existence of the instant pharmacy; accordingly, the instant pharmacy appears to have been used by the general public, other than the patient of the instant hospital, for fraud; ② the instant pharmacy was already established before entering the instant building, and its trade name was clearly distinguishable from the “○○ Youth Hospital,” which is the trade name of the instant hospital,” and the instant pharmacy was not the only way to enter and leave the instant pharmacy, and thus, the instant pharmacy cannot be seen to have been established with the entrance and exit of the instant pharmacy, which is an independent entrance and exit of the instant hospital, and thus, it cannot be seen that there was no possibility that the instant pharmacy will have access to and exit the instant pharmacy, which is an independent entrance and exit of the instant hospital.

5) Furthermore, Article 20(5)3 of the Pharmaceutical Affairs Act is identical in light of the same social factual basis, which serves as the basis for the provision of subparagraph 2 of the same paragraph, and the legislative purport is identical in that it is the realization of the principle of pharmaceutical business, and it does not seem that additional grounds for the above disposition are infringed on the Plaintiff’s right of defense. As such, the Defendant may add this to the grounds for the disposition of the instant case. In light of the aforementioned circumstances, in particular, the instant pharmacy was already established before the instant hospital entered the hospital, it cannot be deemed that the instant pharmacy established a pharmacy by dividing, altering, or repairing part of the facilities or the site of the instant hospital.

6) Therefore, the instant disposition, based on the premise that the instant application by the Plaintiff falls under Article 20(5)2 or 3 of the Pharmaceutical Affairs Act, is unlawful.

E. Judgment on the defendant's argument

1) The Defendant is a director of the Korea-U.S. Medical Foundation, and the sale of the instant store to Nonparty 2 by the Korea-U.S. Medical Foundation to Nonparty 2 is the most trade for the Plaintiff’s application for the establishment of pharmacy. Thus, it is acknowledged that the Defendant’s rejection of the instant application pursuant to Article 20(5)2 and 3 of the Pharmaceutical Affairs Act, which is the purpose of which the Plaintiff’s return was lawful in order to fundamentally block collusion between medical institutions and pharmacies, and that the Plaintiff is a director of the Korea-U.S. Medical Foundation, and that the Korea-U. medical Foundation converted the instant building on September 24, 2012 into a collective building and sold the instant store in KRW 30 million to Nonparty 2 on October 19, 2012.

2) However, it is insufficient to acknowledge the fact that only the statements in the evidence Nos. 1 and 5 evidence Nos. 1 through 5 alone are the most valuable trading between the Korea Medical Foundation and Nonparty 2, and there is no other evidence to acknowledge it. Considering the aforementioned various circumstances, it is insufficient to view the Plaintiff’s director of the Korea Medical Foundation, and the fact that the instant pharmacy was converted into a collective building immediately after the death of the deceased and that the instant pharmacy falls under Article 20(5)2 and 3 of the Pharmaceutical Affairs Act. Accordingly, this part of the Defendant’s assertion is rejected.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is so decided as per Disposition.

[Attachment] Relevant Statutes: omitted

Judge Choi Byung-hee (Presiding Judge)