Selling your pharmacy | Change of ownership
07 December 2020
Pharmacy contract change of ownership
Unlike most other commercial businesses, selling a community pharmacy has a further workstream in addition to the legal contracts to sell your pharmacy.
Your lawyers sort out all the legal contracts to sell your business and the associated transfers of leases/ sale of freeholds, etc but in addition the owners of Community Pharmacies face another obstacle before they can complete the sales process.
Every pharmacy has a contract with the NHS to provide pharmacy services and this needs to be transferred to the prospective new owners on the day that a pharmacy sale completes.
If you are selling a company then there is usually no issue if the NHS pharmacy contract is in the companys name. The NHS contract transfers with the share sale and stays within the company, so no Change of Ownership as far as the NHS is concerned.
Therefore on a share sale the transaction can complete very quickly after exchange of legal contracts to sell the company to its new owners. If the new owners wish to move the NHS Pharmacy Contract to another of their companies post acquisition that is no concern of the previous owners.
If the pharmacy contract is in a personal name or is being sold out of a company to another entity, then the prospective new owners have to apply to the NHS to transfer the Pharmacy Contract into the new owners company/ name.
Although the forms are filled in and submitted by the new owners to Primary Care Support England (PCSE) , the existing owner does need to sign the application as well. It is well worthwhile checking that the application is correctly filled in and has the necessary attachments such as plans and crucially that the relevant fee is paid by the prospective new owners.
The new owners may also have to submit Fitness to Practice forms (FtP) at the same time as the Change of Ownership forms, if they do not already have FtP in the NHS England area the pharmacy is located in. Something else to make sure happens.
PCSE will check they have all the necessary information and then send the information to the local NHS England commissioning body who will circulate the application to all local pharmacies and the local LPC for comment.
Assuming that the application for change of ownership is approved (and this can take 3-4 months or even longer from submission of the application) an approval letter will be issued to the applicants and the existing owner. There is then a 30 day period when other local contractors could appeal against the decision on the grounds that the new owners are not fit and proper persons but that is very, very rare.
After the 30 day appeal period the new owners then have to submit the Notice of Commencement letter they have been sent by the NHS stating the date on which the actual change of ownership will occur. This has to be at least 30 days notice.
When both the seller and buyer have a definite transfer date of the NHS Pharmacy Contract confirmed, then their respective lawyers can plan to legally complete the business sale and property matters all at the same time.
Therefore as you can see from the above process, the NHS Change of Ownership process can significantly extend the completion of the sale of a pharmacy by at least 5-6 months if not longer.
It is therefore always sensible to plan in and agree when the Change of Ownership forms should be submitted at the earliest opportunity.
At completion the GPhC also needs to be notified about any change of Superintendent Pharmacist and for the Register of Premises to be updated with the new owners details.
Work with the pharmacy specialists
All of this may seem like a lot of work but Pharmacy Seekers can assist you with many of these tasks. You will want the best price for your pharmacy and preparation is the key to promoting and subsequently selling your pharmacy.