Whether you’re actively thinking about selling, or just curious about the current market landscape, understanding your pharmacy’s worth and who’s buying in 2025 is crucial.
The UK pharmacy market is facing increasing financial pressures, with a difficult funding climate and tightening margins making it harder for many independent owners to sustain profitability.
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Determining the worth of your pharmacy is the foundation of a successful sale. Buyers consider multiple factors, and valuation methods can vary.
There are a few key elements that play a crucial role.
Financial performance has an important bearing on valuation. Buyers will assess your turnover and profitability as a strong revenue stream and consistent profit margins increase attractiveness.
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Your dispensing volume is a critical indicator of business performance. Gross profit margins are currently around 32% in England and Wales with a slightly higher 35% in Scotland.
EBITDA (earnings before interest, taxes, depreciation, and amortisation) has also been decreasing for pharmacies in recent years with the pressure of increasing costs.
Location, location, location (and demographics)
The location and the local demographics also influence the potential value of a pharmacy. For example, more remote areas with less buyers and recruitment challenges tend to have a lower value than pharmacies in more central locations.
Pharmacies in high-footfall areas or those serving an aging population can be more valuable. Buyers also assess competition levels and growth potential within the area.
A pharmacy’s income source also impacts its valuation. Traditionally a heavy reliance on NHS prescriptions has been the main contributor to a pharmacy’s valuation. But with the recent lack of government funding, pharmacy owners are having to boost their income with additional healthcare services.
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Scope for increasing such services often increases the attractiveness of the business.
Buyers will also scrutinise NHS contracts and service agreements, as well as leases and property terms. Compliance with the General Pharmaceutical Council will also be looked at by potential buyers.
Market trends
The pharmacy industry in 2025 is shaped by an increased focus on digital healthcare and online pharmacy services, a growing demand for clinical services such as vaccinations and private consultations, and a drive to manage costs and maximise efficiency.
Pharmacies with efficient dispensing operations, solid repeat business, and controlled wage costs remain in demand.
What is my pharmacy worth?
When it comes to valuing a pharmacy, there are traditionally two main approaches, the EBITDA multiple method and the pence-in-the-pound method, which is based on a percentage of turnover.
In recent times, the EBITDA method has come under pressure. Rising costs have significantly reduced profits for many pharmacies and some larger groups have even reported losses.
Historically, pharmacies were often valued at around seven times their EBITDA profit, but in today’s market this formula can result in a very low, and sometimes even negligible, valuations.
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As a result, valuers are increasingly turning to the pence-in-the-pound method. This approach takes into account the pharmacy’s turnover, as well as the other key factors I mentioned earlier when understanding the value of your pharmacy.
It’s also crucial to consider recent sales of similar pharmacies in your area, and who your potential buyers might be. For example, a number of pharmacies were recently sold in Middlesex, South East England, with annual turnovers ranging from £500,000 to just over £1 million.
These pharmacies sold for between 91p and £1.08 per £1 of turnover, averaging 99.6p. Each attracted three to 12 offers, showing strong demand in that region. From this, one can deduce that Middlesex is currently a popular area for pharmacy buyers and based on recent trends, the price is likely to be around 100p in the £1.
Who’s Buying Pharmacies in 2025?
Understanding the buyer landscape is critical to positioning your pharmacy effectively in the market. Several types of buyers are actively looking for pharmacy businesses currently:
Independent pharmacy owners and first-time buyers
Many pharmacists aspire to own their own business. There are existing independent owners with one or more branches and first-time buyers. These buyers often seek smaller, well-established pharmacies with strong local customer bases. They usually require financial assistance.
Existing Pharmacy Chains and Groups
Large pharmacy chains and regional groups continue to expand their networks. They often target high-turnover pharmacies, particularly in strategic locations. These buyers are typically well-funded and experienced, making the sales process smoother.
Private Equity and Investment Firms
Private equity groups can also be interested in acquiring pharmacies, particularly those with strong healthcare service offerings. They often seek businesses with scalability and potential for consolidation into larger networks.
Online and Hybrid Pharmacy Operators
With the rise of digital healthcare, some online pharmacy businesses are actively seeking traditional pharmacies to integrate physical locations with online dispensing models. Pharmacies with strong technological infrastructure and online prescription services are particularly attractive.
Local Healthcare Professionals
Some medical practitioners, including GPs and healthcare groups, are exploring pharmacy acquisitions to create integrated healthcare hubs. These buyers are often interested in pharmacies located near medical practices.
How to achieve a stronger price
In 2025, the value of your pharmacy isn’t just about how many prescriptions you dispense. It’s about how well your business is positioned for the future - clinically, commercially, and operationally.
By aligning with NHS priorities, diversifying income, and running an efficient operation, you’ll not only attract more buyers, but achieve a stronger price when you sell.
Anne Hutchings is CEO at Hutchings Consultants.