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2016: The outlook for pharmacy

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2016: The outlook for pharmacy

2015 was an interesting year for pharmacy to say the least. So what does 2016 have in store for us?

The year has already got off to a very interesting start with a number of regulatory changes and price hikes keeping us all on our toes!

In terms of business sales, the later half of 2015 was a busy time with a number of pharmacies coming to market once the Sixth Community Pharmacy Agreement (6CPA) was signed.

The first half of 2015 was very quiet for pharmacy business sales while the negotiations for the 6CPA were underway.

We now seem to be returning closer to historical levels for the number of pharmacy business sales taking place.

Overall, throughout this period, and despite the number of regulatory and economic changes, pharmacy business sale prices have remained relatively constant in the market.

As we have mentioned in previous articles, a key factor for this relates to the strong demand from buyers, especially for smaller strip pharmacies.

So what will influence pharmacy business sales and returns in 2016? There are a number of factors including:

  • Developments and outcomes of the (up to) $1 discount on the PBS Co-Payment
  • Delisting of PBS items
  • Further PBS price cuts
  • Progress and any outcomes of the reviews taking place as part of the 6CPA
  • Legislation changes, including any possible further competition reviews
  • Any changes in access to finance
  • General economic factors
  • Retail trends
  • Interest rate movements
  • Variation in returns from alternate investment classes – such as property and share markets

As you can see there are a number of factors to consider!

Early signs for 2016 are showing consistent vendor and buyer activity compared to late 2015 levels.

General indications are that demand will remain fairly constant. Reasons for this include continual increases in pharmacy graduate numbers, low interest rates, good access to finance and solid returns in pharmacy compared to other asset classes.

If you are considering selling your pharmacy in 2016, please contact Medici Capital for a free market appraisal as soon as possible. It’s never too early to begin preparing for this important stage in your professional career!

Feel free to call ATTAIN (288 246).
 


 

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