The Department of Health and the Pharmacy Guild have agreed to change the existing Pharmacy Location Rules. The new Rules, commencing on 18 October 2011, will affect any pharmacist wishing to establish a new pharmacy or relocate an existing pharmacy.

The key changes to the Rules include:

1. New pharmacies may be established in defined facilities and one pharmacy towns without the need to relocate an existing number.

2. The removal of three relocation rules will prevent:
– Short distance relocations between 1 km and 1.5 km;
– Long distance relocations; and
– The relocation of a pharmacy to an urban locality as an additional pharmacy.

These rules will apply unless:

a) an application is lodged prior to 17 April 2012; and
b) an applicant has a signed lease in place prior to 18 October 2011.

3. Applications to relocate and all supporting documentation must be submitted at the same time. Late amendments or additional information will no longer be considered.

4. The pharmacy catchment requirements have been simplified and the large medical centre rule, the number of shops required to satisfy the large shopping centre criterion and definition of commercial establishment have been amended.  A definition for gross leasable area has also been introduced.

While the Rules are intended to improve the health of Australians by regulating the distribution of pharmacies and allowing better access to medication, they will also increase the importance of the following factors:
– Managing profitability and cashflow, especially where bank approval for funding or restructuring is sought;
– Defensive strategies to ensure market share is not eroded by new competitors;
– The location of one’s business premises and ensuring the lease and tenure of the premises is secure;
– Undertaking appropriate due diligence before acquiring a pharmacy.  (For example, enquiring about the issue date of the PBS number);
– The attributes associated with a specific PBS number which may increase its value, such as a favourable location.
– The need for applications to be correct and submitted on time.

There are still opportunities to maximise the value of your business. If you are interested in understanding how to make the new rules work for you, please contact our Business Advisory Division.