Whether you are a new pharmacist or experienced pharmacist, a pharmacist dreaming of pharmacy ownership or you have already found that ‘perfect’ pharmacy, buying a pharmacy is a big step and requires careful planning and preparation.  The process starts well before you find the right pharmacy to buy.  Before you sign a contract, consider the following points:

Ownership structure

There are multiple ownership structures which can be used to purchase and own a pharmacy. Ownership can be as an individual, in a partnership, via a company, and/or as a trustee of a trust. Each ownership structure has its advantages, disadvantages and risks.  Similarly, there are taxation considerations associated with each structure.  Before entering into a contract, it is essential that you determine your desired structure, ensure it meets the pharmacy ownership legislation requirements at both State and Federal levels and that it is suitable for your financial needs. Getting the structure right from the beginning will save you unnecessary expenses and avoid the headaches that will otherwise be experience if you have to fix or change it later on.

Regulatory Requirements

There are strict federal, and state and territory regulatory obligations associated with owning a pharmacy.  Approval to supply PBS approved medicines requires an application to the Australian Department of Health and Aged Care.  In addition, the required application or notification must be made to the relevant state or territory pharmacy authority.  The application process is complex and requires expert experience. When applying for PBS approval, there are a number of supporting documents that must be submitted and some of those documents require the signatures of other parties, such as the seller.  It is worth noting that the Department of Health and Aged Care application process from submission to approval can take up to 6 weeks and for some state regulators, the process is even longer.  It is important to factor in these timeframes and ensure you have your supporting documentation organised and ready to provide to your solicitor when requested.

Due Diligence

Unless you are already very familiar with the pharmacy you are proposing to purchase, a due diligence condition should be included in your contract. Due diligence involves gathering relevant information about the pharmacy and determining if the investment and proposed business plan is sound. Without limitation and as a minimum, you should review the financial information on the pharmacy as well as any existing agreements, contracts and other arrangements.  People commonly associate due diligence with financial due diligence only however it is much more than that.  You should also consider the terms of the existing lease, potential relocation and development opportunities and the risk of a competitor moving into the area.    Completing a thorough due diligence will make you better informed about your purchase and will enable you to make a clear decision on whether to proceed.

Transfer of Lease

Most purchases will involve a transfer of the existing lease of the pharmacy premises. This requires the landlord’s consent to transfer the lease from the current tenant (usually the seller) to the buyer. Due to the involvement of the third party landlord, the process of transferring a lease can take time and often involves additional costs.  Among other things, the landlord will likely request evidence that the buyer is a suitable person with the financial capacity and business skills to perform the lease obligations and operate the pharmacy from the premises.  To ensure there are no delays to the transfer process, you should ensure you have prepared all necessary financial information and professional references well in advance of the landlord requesting that information.

This article originally featured in the March 2023 edition of Retail Pharmacy Magazine. This article is intended to be for general information only. It does not constitute legal advice nor does it establish a relationship of client and lawyer. Specific circumstances or changes in law may vary the accuracy or applicability of the information published. We recommend seeking specific legal advice particular to your circumstances before taking any action, or refraining from taking any action, on any issue dealt with in this article.


Michelle Neil is a lawyer at Vitality Law Australia, an award winning commercial and property law firm specialising in the pharmacy and broader healthcare industry.  

If you require assistance with healthcare related matters including business transactions, regulatory approvals or leasing, please contact us on (07) 2140 0522 or hello@vitalitylawaustralia.com