3 Key Legal Points When Buying A Pharmacy

Pharmacy sales have many similar issues to other retail businesses. However, there are some very significant issues that require a buyer’s particular attention prior to entering into a contract, so that the buyer can legally run the business after settlement.

Regulation & Pharmaceutical Benefits Scheme

Queensland law strictly limits who can own a pharmacy business. Since 1 November 2025, under the Pharmacy Business Ownership Act 2024 (Qld), a new owner of a pharmacy business must hold a pharmacy business licence issued by the Queensland Pharmacy Business Ownership Council (owners at 31 October 2025 have a transitional period to apply). Only practising pharmacists, certain pharmacist-controlled corporations and a few other eligible bodies can hold a licence, and owning a pharmacy business without one carries a maximum penalty of 200 penalty units. A licence cannot be bought or transferred, so a buyer must be granted a licence, or be added to the existing one, before the ownership change takes effect, which means before settlement. Therefore, before signing a contract for the purchase of a pharmacy, consideration should be given to the process and time frame for the licence and for the Commonwealth approval needed to supply medicines under the Pharmaceutical Benefits Scheme.

It is therefore imperative that a contract for the purchase of a pharmacy is made conditional upon the buyer obtaining the necessary state and federal approvals by way of carefully worded special conditions.

Trading Stock & Suppliers                                

The continued supply of stock such as prescription medicines, health supplements, first aid products and often beauty and infant supplies are important to the continued undisrupted trading of the business following settlement. It will be important to ascertain whether existing supply agreements and their inclusion, such as display and shop fittings, can be transferred or if new agreements will need to be negotiated and put into place from settlement.  In order to accommodate this investigative and negotiation period it is important to make the settlement of the contract subject to obtaining satisfactory due diligence and also the satisfactory transfer or negotiation of new supply contracts. The only way to accomplish this is by the insertion of precise special conditions.

Account Customers                                                            

Most pharmacies will have customers who purchase goods from the pharmacy by way of a monthly account. Special attention should be paid to the amount of these accounts, their record of payment and any discounts that the current owner has agreed to provide to each account customer.  It is advisable to make the settlement of the contract subject to a special condition to obtain a satisfactory inspection of the business’ financial accounts, in order to give a buyer and its financial advisors time to ascertain whether aside from the rest of the financial records, they are satisfied with the customer account arrangements.

Conclusion

In order to protect their business, a buyer of a pharmacy should always seek the advice of a specialist business lawyer prior to signing a contract. Without this assistance and the inclusion of all necessary special conditions in the contract, a buyer could become the owner of a business without the necessary stock and trade, or worse a business they cannot legally operate.

Joe Kafrouni, Legal Practitioner Director, Kafrouni Law

Disclaimer

The information provided by Kafrouni Law is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Law makes no warranties or representations regarding the information and excludes any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Law.

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