Buying your first pharmacy

Not automatically, and this is the fact that shapes the whole deal. On an asset sale a change of ownership needs an application to NHS England under regulation 26(1) of the NHS (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013. It is an excepted application, so it escapes the market entry and Pharmaceutical Needs Assessment test — but it is still an application, the determination period is 30 days and can extend to four months, and once granted you must give at least 30 days' notice of commencement before services start. Build that into your timetable and your funding.

Medicines Act 1968 s74H. When ownership changes, the premises entry ceases to be valid unless the registrar is notified in writing within 28 days — and the duty sits on you as the incoming owner, not on the seller. Miss it and the premises are treated for all purposes as no longer registered. It costs £90 to amend the entry in time and £935 to restore it afterwards, plus a period in which the pharmacy cannot lawfully trade. It is the cheapest expensive mistake in the sector.

They are genuinely different transactions. A share sale leaves the person on the pharmaceutical list unchanged, so no regulation 26 application arises from the change — but you inherit the company entire, including its filing history, tax position and any liabilities already inside it. An asset sale means the regulation 26 route and a decision about the ODS code. Which suits you is a modelling question and it belongs before heads of terms, not after. Sellers usually prefer a share sale for capital gains reasons and buyers usually prefer assets for liability reasons, so it is the first genuine negotiation of the deal rather than an administrative detail to be settled later by the lawyers.

Buying on a debts and liabilities basis means electronic prescription nominations stay with the existing code — but you become liable for money owed to the commissioner by the previous owner. Buying on any other basis means a new ODS code and re-nomination of every EPS patient, which is a direct hit to dispensing volume from day one. That is a real trade-off between unknown liabilities and known disruption, and it should be priced rather than discovered. If you take the debts and liabilities route, the diligence on what the seller owes the commissioner stops being optional — it is the whole basis on which you accepted the risk.

Maintainable profit is only half of it. The other half is how protected the position is: a new pharmacy generally has to show it meets a need identified in the local Pharmaceutical Needs Assessment, and PNAs are revised within three years of the previous publication. Two pharmacies with identical profits can be worth very different amounts depending on how exposed they are to a new entrant. A valuation that never mentions the PNA has not finished. Ask when the local assessment was last revised and what it says about provision in that area — it is public, and it tells you how durable the position you are buying actually is.