From ThoughtSpot: Buying a pharmacy
The average pharmacy owner is older than 65 years. Change is imminent and the opportunity to buy is ripe, with an estimated 5 percent of the 20,000-plus independent pharmacies changing hands each year. Charlie Le Bon, director of Pharmacy Ownership and Acquisition at AmerisourceBergen, who presented on buying and selling your pharmacy at ThoughtSpot 2017, has some advice for would-be buyers:
Know why you’re buying.
The merits of a store that is doing well are fairly obvious. However, less obvious but equally as important may be acquiring a pharmacy that will enable you to make inroads into a particular geography or focus on a population that needs care for a particular disease state. You might look to add a DME or specialty practice, for example, or it might enable you to diversify your payor mix. If staff in a particular location has a specific set of expertise you lack in your other stores, you may find it valuable to use an acquisition to spread that knowledge across other practices.
Manage the transition.
Handle with care the existing pharmacy staff (and patient population). Keeping the fabric of the store relatively intact at first helps to maintain continuity, both with staff and with providers and patients. To that end, plan for a generous review period—Le Bon says it may or may not ultimately work, but six months to a year is a good baseline timeframe. If you are displacing a retiring owner/operator, be prepared to bring someone in that fits the skills gap and the store culture. If there is solid leader already in place, empower the pharmacist to “own” a profit center.
Get help—at every stage.
The sale or purchase of a pharmacy is a very complex transaction. How will you structure the deal? How will you incorporate? Where is the money coming from (SBA, seller financing, wholesaler financing, partnerships, cash)? It’s challenging to conduct a due diligence assessment of the value of the pharmacy, to understand the seller’s sometimes less-than-straightforward record-keeping, and to understand existing wholesaler contracts or identify PBM heat zones that might force a new owner into a probationary period. Consider hiring a professional to help.
Finally, don’t forget: for the pharmacist that you are buying from, this transaction is bound to be an emotional one—for the seller and for his or her long-time employees and patients. Presenting a clear view of your vision for the pharmacy after the sale will go a long way toward making the transition a smooth one.
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