Community pharmacy
How much is my pharmacy worth?
Your pharmacy is worth the earnings it can sustain once the owner pharmacist is paid a market wage for the dispensary hours they work, capitalised at a rate reflecting the risk of those earnings continuing under a new owner, with stock paid for separately at settlement. Because the Commonwealth prices so much of the income, the risk side is less about whether fees hold than about who can buy and whether the pharmacy can stay put.
No multiples published. The reasoning is, in full.
What the answer depends on
The three things that move the number most
A pharmacy's earnings sit inside a regulatory frame no other healthcare business shares, and that is where most of the value question lives.
The approval, and the address it is attached to
Under section 90 of the National Health Act 1953 a pharmacist must be approved by the Department of Health, Disability and Ageing to supply PBS medicines, and the approval is granted for particular premises. It does not pass under the contract of sale: the incoming pharmacist applies for their own approval at the same premises, and the Department asks for those applications at least 30 days before the anticipated settlement date. Moving is harder: the Pharmacy Location Rules set the only circumstances in which the Australian Community Pharmacy Authority can recommend a new or relocated pharmacy, and the Authority cannot override them. Value is tied to an address, which makes lease security and any pending application in the catchment central.
The script mix, and what actually sits under the dispensary margin
Dispensing remuneration is set by the Commonwealth under the Eighth Community Pharmacy Agreement, which commenced on 1 July 2024 and runs to 30 June 2029. For each PBS prescription the pharmacy is paid the medicine price including a wholesale mark-up, an Administration, Handling and Infrastructure fee and a dispensing fee. Script volume alone is a weak guide to earnings: what matters is the split between 30-day and 60-day supply, between PBS, private and over-the-counter categories, and between concessional and general patients. The PBS reports that concession card holders received 196.7 million of the 226 million subsidised prescriptions dispensed in 2024-25.
What it costs to replace the owner pharmacist
In most owner-operated pharmacies the proprietor is also the pharmacist in charge for much of the trading week, often on drawings rather than a wage. Restating earnings to include a market salary for that role is usually the largest single adjustment. A narrow buyer pool sharpens the point. Ownership is capped by state statute: Queensland limits a person to an interest in no more than five pharmacy businesses, the Victorian Pharmacy Authority confines ownership to registered pharmacists and eligible companies with the same limit of five, and section 55 of the Pharmacy Act 2010 (WA) sets four. A pharmacist already at the cap is not a buyer without selling first.
Higher or lower
What would move your number up, and what would move it down
Pushes the number up
- A long lease with options at the approved premises, assignable to a buyer.
- A script base spread across many prescribers rather than one nearby practice.
- A second pharmacist employed and rostered, so the owner is not the only one in charge.
- Front of shop and services earnings that hold without the owner present.
- Clean stock: current, saleable, with slow-moving lines written down.
Pushes the number down
- A short lease, or a landlord relationship that has never been tested.
- Scripts concentrated on one prescriber, medical centre or residential facility.
- Reported profit that only works because the owner is unpaid for dispensary hours.
- A margin that depends on supplier or banner terms a buyer may not inherit.
- An application before the Authority for a new pharmacy in the same catchment.
The evidence
What sets the number, in practice
The analysis needs the approval details and relocation history, the lease and options, script data by month split by supply length, category and patient type, front of shop sales by department with margins, professional services claims, wholesaler and banner agreements, and normalised financial statements.
Two structural points then shape the answer. Pharmacies are typically sold walk in walk out plus stock at valuation, so stock is counted at settlement and paid for at cost on top of goodwill and plant. And the goodwill attaches largely to the approved premises, the lease and the trading systems, all of which pass to a buyer, so it is more transferable than in a medical practice where patients follow the doctor.
Where the line is
Why there is no multiple on this page
HPNA will not publish a multiple for pharmacies, including the shorthand figures quoted as a share of turnover or of script numbers. Those answer a question about the average of a market, and nobody is selling the average.
The turnover-based rules are the worse of the two, because a pharmacy's reported gross margin blends a dispensary margin the Commonwealth largely sets with a front of shop margin the pharmacy sets for itself. Two pharmacies with the same turnover and a different blend do not have the same earnings, so one figure applied to both guarantees a wrong answer. Add the owner's unpaid dispensary hours, excluded from almost every rule of thumb, and the error compounds in the same direction every time.
What it costs to find out
A fixed fee, published before you ask for it
An indicative assessment is a flat $950 plus GST, credited against a valuation report if you proceed within 3 months. A full valuation report is a fixed fee set by the annual revenue of the business being valued, $1,500 plus GST at the smallest band and $9,450 plus GST at the largest, and an expert report for a family law matter or a dispute is priced separately on the same bands. Every fee is agreed in writing before work starts and never depends on the conclusion reached.
Indicative assessment
$950
One fee whatever the size of the business, credited against a valuation report if you proceed within 3 months.
Valuation report
- Up to $1 million
- $1,500
- $1 million to $3 million
- $2,200
- $3 million to $10 million
- $4,950
- Above $10 million
- $9,450
Expert report
- Up to $1 million
- $2,700
- $1 million to $3 million
- $3,950
- $3 million to $10 million
- $8,900
- Above $10 million
- $16,950
Every fee above is fixed and quoted plus GST, and is agreed in writing before any work starts. Bands are set on annual revenue. A business sitting exactly on a boundary pays the lower fee. See the full fee schedule
Go deeper
Read the full analysis
- Sector pagePharmacy valuationsThe complete treatment: methods, earnings adjustments, sector risks, value drivers, the information required and detailed FAQs.Read
- MethodologyHealthcare business valuation methodsHow maintainable earnings, capitalisation, discounted cash flow, net assets and market evidence each work, and when each applies.Read
FAQs
Pharmacy valuation questions
How much is my pharmacy worth?
It is worth the maintainable earnings the pharmacy can sustain once the owner pharmacist is paid a market wage for the dispensary hours they work, capitalised at a rate reflecting the risk of those earnings continuing under a new owner, with stock paid for separately. The risk assessment turns on the security of the approved premises, the concentration of the script base and the depth of the buyer pool in that state.
Does the pharmacy approval transfer when I sell?
No. A section 90 approval is granted to a pharmacist for particular premises and does not pass under the contract of sale. The incoming pharmacist applies for their own approval at the same premises, and the Department asks for those applications at least 30 days before settlement. Value is attached to the address, not portable with the owner.
How do 60-day prescriptions affect what my pharmacy is worth?
They affect the earnings side rather than the risk side. Where a patient receives twice the medication on one prescription, one dispensing event replaces two: the medicine supplied across a year is unchanged while fee income for those medicines falls, partly offset by the Additional Community Supply Support payment. How much reaches a given pharmacy depends on its own patient mix.
Is stock included in the price of a pharmacy?
Usually not in the headline figure. Pharmacies are commonly sold walk in walk out plus stock at valuation, meaning the goodwill and plant are agreed first and the stock is counted at settlement and paid for at cost in addition. Excess stock does not add to what a buyer will pay, and it increases what they must fund on the day.
How much does it cost to find out what my practice is worth?
An indicative assessment is a flat $950 plus GST, credited against a valuation report if you proceed within 3 months. A full valuation report is a fixed fee set by the annual revenue of the business being valued, $1,500 plus GST at the smallest band and $9,450 plus GST at the largest, and an expert report for a family law matter or a dispute is priced separately on the same bands. Every fee is agreed in writing before work starts and never depends on the conclusion reached. The full schedule, including the additional entity fee for groups that trade through more than one entity, is published on the pricing page.
Make your next decision with a clear understanding of value.
Tell us about your healthcare business and the purpose of the valuation. We will confirm the appropriate scope, information requirements, timeframe and the fee band that applies.