Pharmacy valuations for Melbourne pharmacist owners, partners and buyers.
For selling or buying a pharmacy, a partner leaving, bringing in a pharmacist shareholder, and moving the business between eligible entities. Fixed fee, set by turnover.
A Melbourne pharmacy is valued on the profit it can keep earning from dispensing and front-of-shop sales, after paying a pharmacist manager at a market rate and paying market rent. Our valuers split dispensary income from retail, test how secure the script base is, and read the lease and any banner group agreement. Victorian ownership rules shape who can buy: only registered pharmacists and pharmacist-owned companies may own a pharmacy business, and none may hold interests in more than five.
The dispensary and the shop floor are two different businesses
A pharmacy earns money in two ways that behave differently. The dispensary is paid through the Pharmaceutical Benefits Scheme for subsidised medicines and depends on scripts walking in the door, which ties it to nearby GP clinics, aged care homes and the local population. The front of shop sells vitamins, skincare, baby goods and over-the-counter medicines, where margins swing with buying terms, shrinkage and competition from discount chains. The valuation looks at each stream on its own: script volumes and gross profit per script over several years, then retail sales and margin by category. A strip pharmacy in Hampton or Ascot Vale that lives on loyal locals is a different risk from one inside a large centre such as Chadstone, where foot traffic is high but rent is too. The valuer then adds back the owner's own pay and charges a market wage for the pharmacist in charge, so a buyer who does not work the counter can see what the business really earns.
Who is allowed to buy a pharmacy in Victoria
The Pharmacy Regulation Act 2010 (Vic) limits ownership. With limited exceptions, a person must not own or have a proprietary interest in a pharmacy business unless they are a registered pharmacist, or a company whose directors are all registered pharmacists and whose shares are held entirely by registered pharmacists. A pharmacist or eligible company must not hold interests in more than five separate pharmacy businesses. The Victorian Pharmacy Authority registers pharmacy premises and licenses pharmacists to carry on a pharmacy business at those premises, and the Act says a pharmacy business must not be carried on without both. For a valuation this matters in two ways. First, market value is set by what eligible buyers would pay, so the buyer pool is pharmacists and pharmacist companies, not general investors. Second, a sale depends on the buyer getting the licence and premises registration, so the report treats those approvals as a condition of the deal. Whether a particular structure complies is for your lawyer and the Authority, not the valuer.
Leases, banner groups and the undue influence rule
Section 11 of the Act makes void any provision in a lease, mortgage or other commercial arrangement that gives someone other than the licensee the right to control how the pharmacy is run, to access its books beyond checking compliance with that document, or to receive payment that varies with the pharmacy's profits or takings. That reaches into the documents a valuer reads every time: percentage rent clauses in shopping centre leases, banner group fees tied to sales, and loan terms. If a clause is void, the real cost to a buyer may differ from what the accounts show, so the valuer records the position your lawyer gives on any such clause. Most Melbourne pharmacies also sit under a retail lease. The Victorian Small Business Commission explains that a tenant seeking to transfer a retail lease must ask the landlord in writing with details of the buyer's finances and experience, and must give the buyer the disclosure statement and three years of business records. A lease with little time left, or a landlord likely to refuse, comes off the value.
Federal funding under the Community Pharmacy Agreement
Dispensing income rests on the Eighth Community Pharmacy Agreement, made between the federal Health Minister and the Pharmacy Guild of Australia. It started on 1 July 2024 and runs to 30 June 2029, and sets how the government pays pharmacists for dispensing PBS medicines and for medication programs and services. An addendum agreed on 12 June 2026 changed the wholesale mark-up from 1 July 2026 and adjusted pharmacist pay to offset it. Because the terms can shift during the agreement, the valuer does not lift one strong year and call it maintainable. The report looks at dispensary gross profit across periods that span the changes, and states the assumption it makes about the remaining term of the agreement.
When Melbourne pharmacies are valued
- ·Sale of a pharmacy, or testing an offer from another pharmacist or group
- ·A pharmacist partner or shareholder leaving and the others buying their interest
- ·Bringing a pharmacist in as a partner or shareholder
- ·Moving the business between eligible pharmacist entities
- ·Retirement and succession to the next pharmacist owner
- ·Market value evidence for small business CGT concessions on exit (your accountant applies them)
Common questions.
How much is my pharmacy worth?+
It depends on the profit the pharmacy keeps after a market wage for the pharmacist in charge and market rent, and on how secure that profit is. Script volume trends, retail margin, the lease term and the banner agreement all move the figure. The valuation works from your own figures rather than a rule of thumb, and explains each adjustment so a buyer or partner can follow it.
Can a non-pharmacist buy into a pharmacy in Victoria?+
Generally no. The Pharmacy Regulation Act 2010 (Vic) says that, apart from limited exceptions, only registered pharmacists and companies wholly owned and directed by registered pharmacists may own or hold a proprietary interest in a pharmacy business. That includes interests through a trust. Whether a proposed structure fits is for your lawyer and the Victorian Pharmacy Authority to confirm.
Is a pharmacy valued as a percentage of turnover?+
Turnover rules of thumb are common in pharmacy talk, but two pharmacies with the same sales can earn very different profits because of dispensing mix, retail margin and rent. The conclusion is based on maintainable earnings. Where a turnover-based figure is useful as a cross-check, the report shows it and explains any gap.
Does the five-pharmacy limit affect what my pharmacy sells for?+
It can. A pharmacist or pharmacist company may not hold interests in more than five pharmacy businesses, so some likely buyers may already be at the limit. That narrows the pool of eligible buyers. The valuation assesses value to a typical eligible buyer and notes anything about the market for your pharmacy that a buyer would weigh.
What documents does the valuer need for a pharmacy?+
Usually three years of financial statements, dispensary reports showing script numbers and gross profit, retail sales by category, a stock valuation, the lease and any banner, franchise or loan agreements, and a list of staff and pay. The lease and agreements matter because of the undue influence rule in the Pharmacy Regulation Act.
What does a pharmacy valuation cost and how long does it take?+
The fee is fixed before work starts and set by annual turnover: $1,495 + GST under $2 million, $2,495 + GST for $2 million to $3 million, $3,495 + GST for $3 million to $10 million, and a written quote above $10 million. Small reports take 2 business days and medium and large reports 3 business days, counted from when payment and all required information have been received.
- ·Guidance on pharmacy business ownership, proprietary interests and undue influence (15 December 2025), Victorian Pharmacy Authority
- ·Guidance: Sale of Business Agreements, Victorian Pharmacy Authority
- ·Pharmacy Regulation Act 2010, legislation.vic.gov.au
- ·About the 8CPA, Australian Government Department of Health, Disability and Ageing
- ·Transfer of a retail lease premises, Victorian Small Business Commission
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Small Business Valuation
$1,495 + GST
For a business with annual turnover under $2 million. Signed report in 2 business days. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before we start and never tied to the outcome.
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Last reviewed 11 November 2026 by Business Valuations Melbourne, Level 7, 55 Collins Street, Melbourne.