How to buy a pharmacy in England: the eight steps, in order

Most guides to buying a pharmacy are written by lenders or brokers. This one is written by a pharmacist who has stood behind the counter of the branches being sold, run the sale from the seller's side, and sat with buyers while their applications went in. The order below is the order things actually happen in - and the mistakes are nearly always mistakes of order.

1. Decide what you are buying: the assets or the company

There are two ways to own a pharmacy. You buy the business and its assets from the current owner, or you buy the shares of the company that owns it.

The difference matters from the first week, because it decides which NHS route you take. In an asset purchase, the NHS contract has to move to you, and that needs consent to a change of ownership. In a share purchase the contract stays exactly where it is - with the company - so the NHS step is different and sometimes not needed at all. A share purchase brings the company's history with it, good and bad; an asset purchase leaves it behind. Your accountant and solicitor will have views on tax and liability. Have that conversation before you make an offer, not after.

2. Get your own house in order before you look

If you have not held an NHS pharmacy contract before, you will be asked to satisfy fitness to practise conditions as a new contractor when you apply. That means declarations, references and checks that take time to gather. Start them now. Buyers who do this in week one are the buyers whose applications go through in the thirty-day window; buyers who leave it until heads of terms are the ones who lose the deal to someone quicker.

The same week, speak to a lender who knows pharmacy. Specialist lenders fund a large share of the price including goodwill, over long terms, because the NHS income is what they are lending against. What they want to see is the same set of documents the seller will produce for due diligence, so ask for the list early.

3. Find the right pharmacy, not the first one

Item numbers on their own tell you very little. What you want is the trend in items over three years, the services income and whether it is stable, the lease term and rent, and the staff - who they are, what they cost, and whether the pharmacist who makes the place work is staying.

A pharmacy that looks cheap because its items are falling is not cheap. A pharmacy that looks expensive because a long lease and a settled team come with it may be the better buy. This is where a broker who has run branches earns a fee: the numbers are the beginning of the conversation, not the end of it.

4. Make the offer subject to the right things

Heads of terms are not binding, but they set the shape of everything after. Make the offer subject to due diligence, subject to NHS consent, subject to funding, and subject to the lease being assignable on acceptable terms. Say what you expect on the stock, on the fixtures, and on the handover period. Vague heads of terms are how three months are lost later.

5. Due diligence: read what the NHS knows

The seller's accounts are one view. The NHS statements - the monthly schedules of payment - are another, and they do not lie. Reconcile the two. Look at the categories of income, at what has been clawed back, at the services actually claimed. Read the lease. Read the employment contracts. Ask about the last GPhC inspection and read the report. Ask about anything outstanding with the ICB.

If a figure does not have a document behind it, treat it as unconfirmed. Every buyer who has been burned was told a number that nobody wrote down.

6. Apply to the NHS - and to the GPhC - early

For an asset purchase you apply to the market-entry team for consent to the change of ownership under the 2013 Regulations. Once the application is complete, it should be determined within thirty days; incomplete applications are where the months go. Submit as early in the process as you can, so that the consent runs alongside the legal work rather than after it.

The premises are registered with the General Pharmaceutical Council, and a change of owner means the registration has to be dealt with in your name (or your company's, with a superintendent pharmacist). Do not let this be an afterthought - the day you complete, you must be able to dispense lawfully.

7. The staff come with the business

In an asset purchase, the employees transfer to you under TUPE with their existing terms. That is not optional and it is not a negotiation with them; it is a process, with information and consultation steps that have their own timetable. Plan for it, budget for it, and meet the team before completion. The pharmacist and the technicians are what you are actually buying.

7a. Know when the money actually arrives

One belief costs buyers more than any other: that NHS money arrives three months in arrears, so you need three months of working capital before you start. It has not been true since November 2021. Submit the FP34C declaration through Manage Your Service by the 5th of the month and the advance payment lands around the 11th of that month - roughly eleven days after the end of the dispensing month, and before the standard 30-day wholesaler terms fall due. The dates are published in the NHSBSA pharmacy payment timetable; the earlier timetable has applied to every contractor who declares through MYS since November 2021.

That changes the shape of the deal. It changes how much cash you need on day one, what your lender needs to see, and what a seller can reasonably claim about the working capital the business ties up. Model it from the NHSBSA payment timetable, not from what everyone says at the counter.

8. Completion is a day; the handover is a month

On the day, the money moves, the contract moves, the keys move. In the weeks after, the supplier accounts, the wholesaler terms, the PMR system access, the NHS mail, the direct debits and the hundred small things that make a pharmacy run all have to be re-pointed at you. Agree a handover period with the seller in the heads of terms - a month of availability is normal - and hold them to it.

The short version

Decide asset or share. Start your fitness-to-practise file and your lender conversation in week one. Model the cash from the real NHSBSA timetable, not from folklore. Buy the trend, not the headline. Make the offer subject to the right things. Reconcile the accounts to the NHS statements. Apply to the NHS and the GPhC early. Plan TUPE. Agree the handover.

This is general information from experience of running pharmacies and working on their sale and purchase, not legal, tax or financial advice. Your solicitor and accountant confirm the legal and tax points for your own purchase. RSB Consulting works with a bench of solicitors, accountants, lenders and insolvency practitioners who already work together; if you want a second pair of eyes on a pharmacy you are looking at, tell us what you are trying to do.

Sources. Community Pharmacy England on change of ownership · The NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013, regulation 26 · NHSBSA pharmacy payment timetable · TUPE: a guide to the 2006 Regulations (gov.uk)

Related: What happens to the NHS contract when a pharmacy changes hands? · Buying a pharmacy with RSB · The adviser network

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.