Fear of funding cuts drives locums to buy pharmacies
More locums are looking to buy their own pharmacies ahead of cuts to the sector's funding, property advisor Christie & Co has said.
“A number of operators” are reducing the amount of hours they employ locum pharmacists in order to mitigate the anticipated effects of the 12% cut to pharmacy funding in England from December, Christie & Co head of pharmacy Tony Evans told C+D last Friday (November 18).
As a result, more locums are considering acquiring their own pharmacy to “buy themselves an income”, Mr Evans added.
Christie & Co has seen a 5% increase in the number of first-time pharmacy buyers since the cuts were first proposed in December 2015.
“A lot of that is down to locum pharmacists and pharmacy managers feeling they may [suffer] the brunt of the cuts…spurring them on to try and own [a pharmacy] themselves,” he said.
While pharmacists are looking at the market with caution since the drop in funding was confirmed in October, Mr Evans said Christie & Co “continues to receive multiple offers, including above asking price” for pharmacies listed with the firm.
“We have circa 5,000 applicants and about 81% of those are first-time buyers or new entrants to the market,” Mr Evans said. “Many pharmacies may exit the market as a result of the funding cuts, but a number of people are seeing this as an opportunity to acquire.”
Average cost of pharmacy
The property firm completed 61 sales up until October this year, with an average of seven offers received per pharmacy, Mr Evans said.
“Interestingly, the average sale price was 110-111% of the listed guide price,” he said.
Mr Evans calculates that the average pharmacy sold for £860,000 in 2016. But he warned this figure might be “skewed” by “very small” and “very large” pharmacies included in the sales figures.
Read more about some of the most significant pharmacy acquisitions of 2016 here