Continuity of service: Navigating the pharmacy selling and buying process
Pharmacy owners who are retiring or getting out of the business often face the question of what to do with their pharmacy. The solution that preserves the community business, while continuing to serve their patients, is to find an independent pharmacist buyer — which can be a daunting process.
“We feel that pharmacy is truly practiced in an independent pharmacy where the patient knows the pharmacist and the pharmacist knows the patient," John Fiacco, vice president of Pharmacy Transition Services at Cardinal Health told Drug Store News. "You want to have a choice of where you get your prescriptions filled and hopefully you make that choice based on service — and independents are known for their service."
Cardinal Health’s Pharmacy Transition Services team is built around helping pharmacy owners find a buyer to take over the business, preserve the pharmacy’s relationship with its patients and, if the new owner wants, directing them to a Medicine Shoppe or Medicap franchise business consultant to help further smooth the transition. Fiacco emphasized the seller should begin the process two to three years before they intend to sell.
“Certainly the more time the seller has to prepare the better. Owners should have an exit strategy in place and get everything in order,” Fiacco said. “The more time the owner has to put everything in order, the better the outcome for both buyer and seller.”
One of the key components of preparedness, he said, is making sure that a pharmacy’s financials are in order — not doing so is a common element that can derail a transition. Having a pharmacy’s financial house in order goes hand-in-hand with the seller assembling a team that includes accountants and an attorney, Fiacco said. In addition, the seller should set a realistic price for the pharmacy that not only a buyer will see as appropriate, but also will accomplish all of the seller’s goals and leave them debt-free.
But ultimately, many of these questions won’t matter if a pharmacy buyer doesn’t mesh well with the pharmacy staff. And while buyers can be found through cold calls, Fiacco said that his transition services team’s first job is to help pair buyers and sellers that they believe will be a good fit. For the Pharmacy Transition Services team, which doesn’t charge a fee for its services, finding two parties that are a good fit is a crucial part of the job — and he encouraged attendees of Cardinal Health RBC 2017 that are thinking about selling to meet members of the team on the show floor in San Antonio.
“If you’re coming to RBC and you’re thinking about selling your pharmacy, I encourage you to stop by and talk to a member of the Pharmacy Transition Services team,” he said. “We can answer questions and help with a valuation of the pharmacy.”
What motivates Pharmacy Transition Services is what motivates anyone who decides that their business and patients would be best served by keeping the independent pharmacy in the community.
“No. 1, there's continuity in your community — and some of these independent pharmacies have been around for a long time,” he said. “Rather than see that legacy go away, it would be continued. For your patients, for your community and for your staff, it's much better.”