How does the 8CPA affect Pharmacy Sales and Values

How has the announcement of 8CPA affected Pharmacy Sales?

It's a good time to buy AND a good time to sell!

What does the Guild’s 8CPA and the PSA’s ‘Strategic Agreement’. mean to the value of Pharmacies?

The most important feature of the 8CPA that started on the 1st of July is stability. We know how the remuneration will pan out over the next 5 years so business decisions can be made with a degree of confidence. This simply means that buyers are more comfortable committing to purchasing and sellers can feel more confident that they will get what their business is worth.

Another important development since 60 Day Dispensing was announced is the growth in remuneration from the Regional Pharmacy Maintenance Allowance or RPMA. This can make regional and rural Pharmacies a very attractive option, especially for a first-time buyer. An annual payment coupled with much lower rents in regional areas and the distance to competition make Regional Rural and remote Pharmacies a great steppingstone for first timers. https://ajp.com.au/news/rpma-payment-matrix-revealed/  Have a look at the regional Pharmacies available on the 'Businesses for Sale' page where RPMA payments are as high as $101,000 per annum.

The big win, however, is the PSA’s ‘Strategic Agreement’. I do need to disclose my bias here being the NSW PSA Branch Committee President, but the potential to build paid services outside the 8CPA, which is, after all, predominantly an agreement about medication funding, is a huge win and one that the National PSA leadership should be proud of. This agreement takes funding for items such as NIPVIP, HMR/RMMRs and Workplace funding outside of the capped 8CPA funds.

8CPA has provided the stable platform needed for banks to have confidence in the Pharmacy sector and to lend at Capitalisation Rates at or very close to those prior to the 60 Day Dispensing Announcement, supporting sale prices at a level very close to prices up until March 2023.

So, is it a good time to buy and/or a good time to sell?

Well, it's probably yes to both.

For sellers, the stability of the next 5 years means that prices will be solid.

For buyers, the same applies with the extra bonus of the potential of the outside 8CPA funding. In NSW the Pharmacy trials are showing the way with the recently launched skin conditions trials, Impetigo, Shingles, Dermatitis and Psoriasis being added to the Oral Contraceptive trial and UTI Treatment moving to Business as Usual. The NSW Government has committed to rolling out the same 23 conditions of the QLD pilot. That along with a hopefully positive outcome from the Scope of Practice Review means that the Pharmacy profession has much to look forward to.