A distressed pharmacy: what to do in the first fortnight
Updated: 5 days ago
Nobody reads this post for interest. You are reading it because the wholesaler has put you on stop, or the bank has written, or the NHS has clawed back a sum you cannot cover, or you have simply added it up and it does not add up. The first two weeks decide how much of what you have built survives. This is what to do in them, in order.
Two things first. This is not legal, financial or insolvency advice; where a decision binds you, a licensed insolvency practitioner or a solicitor confirms it. And if patient safety is at risk today - stock you cannot buy, a pharmacist you cannot cover - that comes before every commercial question below.
Day 1–2: find out where you actually are
Not roughly. Exactly. Write down every creditor and what they are owed, every asset and what it would fetch, the NHS income due and when, the rent and when it is next due, and the payroll date. Most owners in difficulty have not done this, and most decisions made without it are wrong. It takes a day, and it is the document every adviser will ask for first.
Day 2–3: speak to a licensed insolvency practitioner - before you speak to anyone else
Not because insolvency is inevitable. Because an IP will tell you what your options actually are, what you must not do from here on (the rules on preferring one creditor over another, for instance, are real and they bite), and whether the business can be sold as a going concern. That conversation is confidential and early. Owners who have it in week one keep options that owners who have it in month three have lost.
An IP and the GPhC are different lanes. The IP is told everything about the business; the regulator is told what the regulator must be told, when it must be told, by the person who must tell them. Do not blur the two.
Day 3–5: protect the things that are worth money
A pharmacy's value in a distressed sale is its NHS contract, its premises, its team and its stock - in that order. Each can be lost in a fortnight of inattention:
The contract depends on the pharmacy continuing to trade and to meet its terms. Keep opening. Keep dispensing. Keep the records right.
The premises depend on the rent. Speak to the landlord before the landlord speaks to you; a landlord who hears it from you is a landlord who can be worked with.
The team depends on being told the truth at the right moment. Staff who find out from a supplier leave; staff who hear it from you, with a plan, mostly stay.
The stock depends on the wholesaler. A supplier on stop can sometimes be brought back with a payment plan; a supplier lied to cannot.
Day 5–10: decide whether to sell, and run it properly
A distressed pharmacy sold in the right order - buyer list first, one buyer at a time, same information for each, heads of terms that protect the price - is worth far more than one sold in the wrong order under pressure. The wrong order looks like this: an offer from the first buyer who hears; a reduction the week before completion "because of the circumstances"; a second reduction; a completion at a fraction of what the pharmacy would have made three months earlier.
The right order looks like a normal sale run fast. The buyers who want that town, that contract, that size are found and approached in confidence. The information pack exists. The offers are compared on the same basis. The price is agreed and defended. The fee basis of everyone involved is in writing before anything is signed. The insolvency practitioner and the solicitor are in the room from the start, so that nothing agreed has to be unpicked.
What not to sign
Anything that gives a buyer exclusivity for nothing. Anything that moves stock or assets before the price is agreed. Anything a lender puts in front of you that a solicitor has not read. Personal guarantees you have not understood. And any document that describes the pharmacy's position in a way you know to be untrue - it will be read later by people who will hold you to it.
Does the business failing affect my registration?
If you are the superintendent or a registered pharmacist, your obligations to patients and to the register do not change because the company is in difficulty, and they cannot be waived by anyone's instruction. Keep the records right, keep the controlled-drugs register right, keep the responsible pharmacist notice right. The business's finances are one lane; your professional standing is another, and it is the one you keep whatever happens to the company.
The fortnight in one paragraph
Know exactly where you are. Speak to an IP first, in confidence. Protect the contract, the premises, the team and the stock. If you sell, sell in the right order and early. Sign nothing a solicitor has not read. Keep your professional obligations exactly where they were.
RSB Consulting works alongside licensed insolvency practitioners and solicitors already on the bench, and its founder managed the disposal of a national pharmacy group through its insolvency. This is not legal, financial or insolvency advice and it signposts where it must. If the fortnight has already started, say so; the first conversation is confidential.
Rajkamal Singh Bhatti MPharm is a practising pharmacist (GPhC registration 2230365) and a former Superintendent Pharmacist of a national group of 120 branches, which he took through insolvency and sale. He founded RSB Consulting.
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