Buy a pharmacy — with a pharmacist doing the diligence.

 

Do I need to be a pharmacist to own a pharmacy?

Not if the owner is a company. A company can own a pharmacy without its directors being pharmacists, provided it appoints a superintendent pharmacist, who is answerable for the way medicines are kept, prepared and dispensed. An owner who trades as an individual or in partnership does have to be a pharmacist. The premises themselves are registered with the General Pharmaceutical Council, and that registration belongs to the owner, so the new owner has to notify the GPhC within 28 days of the change; if they do not, the premises come off the register.

 

What happens to the NHS contract when a pharmacy changes hands?

It does not transfer automatically. If you are buying the business and its assets rather than the company, the incoming owner must apply in England to be included in the pharmaceutical list, and that application has to be made before the change of ownership takes place. It is then out of your hands until the commissioner determines it, so the order of the steps matters more than the completion date in the agreement. A share purchase differs, because the entity holding the contract stays the same.

 

What happens to the staff when I buy a pharmacy?

In most pharmacy sales the staff come with the business. Where a business is sold as a going concern, the TUPE rules generally move existing contracts of employment to the new owner on their current terms and with continuity of service, and there are duties to inform and consult before the transfer. Practically, you inherit the rota, the accrued holiday and any long-standing arrangement that was never written down. Establish those during diligence, not in your first week as owner.

 

Should I buy an existing pharmacy or open a new one?

Most buyers take on an existing business, because opening a new NHS pharmacy in England is hard. An applicant usually has to persuade the commissioner that there is an unmet need identified in the local pharmaceutical needs assessment, and pharmacies already trading nearby can object. An existing pharmacy comes with the contract, the patients and a dispensing history you can examine. The work then moves to a different question, which is whether what you are buying still performs once the current owner has gone.

 

What should I check in the lease before I buy a pharmacy?

Start with whether the lease can be assigned to you at all. Landlord's consent is normally required, and references, a rent deposit or a personal guarantee often come with it, which takes longer than buyers expect. Then look at the unexpired term against the term of your funding, the next rent review, any break clause, the repairing obligations and, in England and Wales, whether the lease has security of tenure or has been contracted out of it. A weak lease changes what the business is worth, whatever the accounts say, so have a solicitor read it before you commit.

 

How do lenders decide whether to fund a pharmacy purchase?

A sector lender lends against the NHS income and the margin behind it. Lenders generally want normalised accounts, a clear view of where the income comes from, a deposit from you and a credible answer on who will run the pharmacy each day. What they are testing is whether the dispensing and service income will still be there a year after completion. Talking to one early tells you what is realistic before you spend months on a business you cannot finance.