NTMA Pharmaceuticals Pty Ltd v Beardmore

This appeal came out of a PBS compliance dispute involving several connected pharmacy businesses. The Secretary of the Department of Health and Aged Care had made two referrals under s 114 of the National Health Act 1953 (Cth) to the Pharmaceutical Services Federal Committee of Inquiry. Those referrals authorised the Committee to inquire into and report on the services or conduct of the appellants and named individuals in connection with the supply of pharmaceutical benefits.

The first referral, made on 26 February 2024, covered three pharmacy sites in Blacktown, Merrylands and Greystanes, plus other premises associated with named individuals. The second referral, made on 19 August 2024, concerned DDS after the Greystanes pharmacy had been transferred from PL to DDS. The businesses challenged both referrals in judicial review proceedings and lost at first instance. They then appealed to the Full Court.

The commercial background matters. The Department had prepared compliance evaluation reports and identified unusual PBS claiming patterns. The judgment specifically refers to anomalies such as identical PBS claims for the same medicine supplied to the same patient by certain appellants. The Court also recorded ownership and control links between the companies and the individuals named in the referral. That combination of unusual claiming behaviour and corporate connections was central to the Court's view that a joint referral was understandable.

The appellants were NTMA Pharmaceuticals Pty Ltd, PL Pharmaceuticals Pty Ltd, United Wellness Pty Ltd and DDS Greystanes Pty Ltd. The judgment says they were corporations registered as pharmaceutical chemists and therefore counted as pharmacists for the purposes of the Act.

At the time of the February referral, NTMA operated and was the approved pharmacist for the Blacktown pharmacy, United operated and was the approved pharmacist for the Merrylands pharmacy, and PL operated and was the approved pharmacist for the Greystanes pharmacy. NTMA and United continued to hold approvals. PL cancelled its approval around 17 May 2024 after the Greystanes pharmacy was transferred to DDS. DDS then held the approval number for the Greystanes pharmacy.

The Court also recorded the ownership and directorship links. Ms Sadri was the sole director and shareholder of NTMA and later the sole owner and director of DDS. Mr Hesari was the sole director and shareholder of United. Until May 2024, Ms Sadri and Mr Hesari were both directors and shareholders of PL, each holding 50% of the issued share capital. The judgment also notes that Ms Sadri and Mr Hesari were not themselves approved pharmacists for the purposes of Part VII of the Act.

The February referral asked the Committee to inquire into and report on various matters in connection with the supply of pharmaceutical benefits under Part VII of the Act. The referral was not framed as a single narrow allegation. It covered a range of possible PBS compliance issues at the named premises and at other premises associated with the named individuals.

The matters referred included claims for the supply of pharmaceutical benefits where there was allegedly no supply, whether an approved pharmacist had promised or offered a gift, rebate or reward as an inducement for a person to present a prescription, whether something other than the pharmaceutical benefit had been supplied in exchange for the prescription, whether pharmaceutical benefits had been supplied without charge or for a charge other than in accordance with Part VII, and whether pharmaceutical benefits had been supplied or purportedly supplied more times than the prescription allowed. The referral also extended to any other matter the Committee believed was reasonably incidental to those matters.

The August referral was similar in structure but focused on DDS after the transfer of the Greystanes pharmacy. The judgment says it was based on a separate evaluation report expressing the view that DDS was showing the same concerning behaviour as PL and that there was prima facie evidence of breaches.

The Full Court said the appeal raised three broad issues. First, whether the inquiry based on the February 2024 referral should be restrained because it concerned more than one approved pharmacist and allegedly created a real risk of prejudice or embarrassment. Second, whether there was power to continue to inquire into the past services or conduct of a pharmacist that was no longer an approved pharmacist at the time of the inquiry. Third, whether the referrals were void for uncertainty.

The appellants' argument on the first issue tried to draw an analogy with joint criminal trials. They said that if one inquiry covered several approved pharmacists, evidence relevant to one might unfairly prejudice another, creating a kind of guilt by association. They argued that fairness principles from criminal procedure should therefore inform whether the inquiry should be restrained.

The Court approached the case as one about jurisdictional error. In other words, the question was not whether the appellants disliked the inquiry structure or thought it was harsh. The question was whether the referrals were legally invalid.

The Full Court dismissed the appeal with costs. It said the appellants had essentially repeated the arguments they had put to the primary judge and that those arguments should be rejected, essentially for the reasons already given below.

On the multi-party inquiry issue, the Court said it was plain from the wording of s 114 itself that an inquiry can involve more than one pharmacist, because the section refers to approved pharmacists in the plural. The Court also accepted the primary judge's view that, given the anomalies identified in the compliance reports and the connections between the entities and individuals, a joint referral against the appellants was a perfectly understandable course of action.

The Court rejected the attempt to treat the inquiry as analogous to a criminal proceeding. It said a criminal proceeding involves an adjudication of guilt and penal consequences, whereas a s 114 inquiry is an administrative inquiry conducted for the purpose of upholding the integrity of the PBS. The Court accepted that a s 114 inquiry can have real consequences, including reputational consequences and possible later action under s 95, but said those features are common in administrative investigations and do not justify importing the rules used for joint criminal trials.

The judgment also indicates that the Court rejected the arguments about continuing to inquire into a pharmacist that had ceased to be approved and about uncertainty in the wording of the referrals. Because the available reasons are truncated, the detailed path of reasoning on those points should be checked against the complete judgment before relying on the finer legal detail.

A major part of the appellants' case was the idea that a joint inquiry into several pharmacists created unfairness similar to a joint criminal trial. The Court rejected that comparison in clear terms.

It said there is no true analogy between a s 114 inquiry and a criminal proceeding. A criminal case determines guilt and can lead to penal consequences such as a fine or loss of liberty. By contrast, a s 114 inquiry is administrative and directed to the integrity of the PBS. The Court accepted that an inquiry may still have serious practical consequences, including reputational effects and the possibility that the Minister may later act under s 95, but said that does not transform the inquiry into a criminal process.

The Court also pointed to structural features of the statutory scheme. A committee is not bound by the rules of evidence. Its proceedings are held in private. It prepares a written report setting out findings and conclusions. The committee is not the final sanctioning decision-maker. If sanctions are later considered, the Minister is the decision-maker. The Court considered those features important because they mean concerns about prejudice are managed differently from a jury trial. In particular, there is scope for affected parties to make submissions that unduly prejudicial material should not be included in the report.

The Court further noted that even in criminal law, the mere fact that evidence admissible against one person may sit alongside evidence concerning another does not automatically require separate proceedings. That observation reinforced the Court's conclusion that the appellants' argument went too far even on its own analogy.

The Court's reasoning was grounded in the compliance evaluation reports and the factual links between the businesses. The judgment says the February referral arose from concerns that NTMA, United and PL may have been utilising common patients to process PBS claims without supply and showing other serious compliance behaviours such as swapping and excessive discounting. The reports identified unusual patterns and anomalies, including identical claims for the same PBS medicine supplied to the same patient.

That matters because the Court did not uphold the joint referral in the abstract. It did so in a factual setting where the Department had identified overlapping patterns and where the entities were connected through ownership and control. For business readers, this is a reminder that regulators often build these cases from data patterns, transaction records and corporate links rather than from a single complaint.

The Court also referred to the statutory hearing framework in s 125, including notice and the opportunity for an approved pharmacist to examine witnesses, give evidence, call witnesses and address the committee. That was part of the Court's answer to the appellants' fairness concerns.

For pharmacy owners and managers, the practical message is that regulators and courts may look across the whole operating picture where related entities share people, systems, patients or patterns of conduct. A company structure with separate entities does not guarantee separate treatment if the underlying facts suggest coordinated or overlapping behaviour.

The case also shows that changing the structure after concerns arise may not solve the problem. Here, the Greystanes pharmacy moved from PL to DDS and PL's approval was cancelled, yet the litigation still had to deal with whether the inquiry could continue and whether a fresh referral could be made. A transfer, cancellation or ownership change may therefore become part of the compliance narrative rather than an endpoint.

Businesses in regulated sectors should also note the Court's emphasis on process. The answer to fairness concerns was not to stop the inquiry at the outset, but to rely on the statutory hearing process and ordinary administrative law principles. In practice, that means your records, submissions and response strategy matter a great deal once an inquiry begins.

This checklist does not come from a court order. It is a practical reading of the judgment. The Court's reasons show that clear records and disciplined governance are likely to matter far more than broad arguments that a regulator should have investigated each related entity separately.

The Full Court judgment was delivered on 19 March 2026. It was an appeal from NTMA Pharmaceuticals Pty Ltd v Beardmore [2025] FCA 1036. The appeal was dismissed with costs.

The available reasons clearly establish the result and much of the Court's reasoning. However, some of the published text available for review is truncated. If you need to rely on the decision for a detailed point about former approved pharmacists, uncertainty in referral wording or the exact operation of the hearing provisions, the complete judgment should be checked.