Over the last few weeks, we have spoken to many pharmacy operators who, while not only facing a surge in both retail and dispensing activity, have also had to implement social distancing measures and source PPE equipment and measures to protect their staff. However, many have still found time to go the extra mile, whether that’s offering free hand-sanitiser to vulnerable patients, or including a food shopping service in conjunction with local convenience retailers to shielded and vulnerable patients – an inspiration to us all.
The government has introduced a plethora of measures to help contractors through these incredibly hard times:
How have COVID-19 measures affected the sales and acquisition of pharmacies?
- Recognising the increased pressures seen from the surge in dispensing volumes, the government has injected advance payments to the tune of £300 million into community pharmacies paid in two stages; the first - £200 million at the beginning of April; the second - £100 million at the end of April/beginning of May
- The suspension of business rates has been a welcome boost to pharmacy operators
- The Pandemic Delivery Service, introduced from 9 April, acknowledging the increase in demand on delivery services since the government told people to stay at home. The service remunerates pharmacies to help shielded patients receive prescriptions, while they are self-isolating at home
- Additional payments of £250 per hour for the three hours pharmacies were required to open on both Good Friday and the Easter Bank Holiday Monday
- An increase in Category M reimbursement prices by £15 million in June
Despite the wider impact of the pandemic, the pharmacy market has remained relatively active with offers being received, deals being negotiated and sales completing.
Since the beginning of March, Christie & Co has received in excess of 165 offers against the pharmacies we have on the market, resulting in 56 deals being agreed.
There have, of course, been other challenges to the sale process, such as related intermediaries having to work from home, and banks prioritising CBILS loans and supporting existing clients rather than processing new business. Where funding has been agreed, social distancing and lockdown measures have affected the ability for valuations to be undertaken, albeit with the recent lockdown easing we expect to see this service reignite.
The processing of market entry applications was also suspended by the PCSE. This included the consideration of Fitness to Practice
applications as well as Change of Ownership
applications. With an increasing number of asset sales due to corporate disposals, this has affected the speed at which sales can progress and will inevitably delay completions.
As of 1 June 2020, it is expected that the full Market Entry function will be restored. However, it is likely that some applications will take longer than the current regulatory timescales to process as the Market Entry teams work through the backlog of applications.
What can Christie & Co do to support the pharmacy sector at this time?
The UK pharmacy sector has responded strongly and effectively in dealing with the pressures the pandemic has created and for that we are very appreciative. Throughout the pandemic, Christie & Co’s specialist pharmacy team has been on-hand to provide timely advice to contractors, whether through funding advice, valuation advice or disposal. If there is anything else that we can do to assist you or your business at this time, please don’t hesitate to get in touch.