The latest IBISWorld reports on the Australian pharmacy industry have just been released, and as you would expect, we read them closely. Whilst we have a different view to some of the findings in the report, this year’s edition tells an interesting story of where the sector sits and where it is heading.
Here is our take on the key findings, and what they mean if you own a pharmacy or you are thinking about buying one.
The sector remains large and steady. Pharmacy is a roughly $29.9 billion industry, spread across over 6,000 community pharmacies and employing close to 89,000 people. More importantly, it continues to be one of the more stable businesses you can own. IBISWorld rates its revenue volatility as low, and the reasons are familiar to anyone in the industry: medicines are essential, demand does not swing with the economy, and ownership rules keep pharmacies in the hands of pharmacists rather than large corporations. For a buyer, that stability is a big part of the appeal. For a seller, it underpins the reliable earnings that make a well-run pharmacy valuable when it comes time to sell.
Prescription medicines still do the heavy lifting. Dispensing remains the core of the business, generating around $19.8 billion, or roughly two-thirds of industry revenue. General retail adds close to a quarter, with scheduled non-prescription medicines and professional services making up the rest. Understanding that revenue mix matters when you are valuing a pharmacy, because the balance between dispensary and front-of-store income tells you a lot about where a business is exposed and where it can grow.
Revenue is expected to soften, though we’d question how much. The report points to PBS reforms, and 60-day dispensing in particular, as a drag on dispensary income, and forecasts industry revenue easing over the next five years to around $28.9 billion by 2031-32. There is no doubt the reforms have had an impact on the dispensary side of the business. But 60-day dispensing has been in place since 2024, and the impact has arguably been milder than first feared. Uptake has run below expectations: a Grattan Institute analysis found actual 60-day prescriptions in 2025 came to only about half of what was forecast, as many prescribers have stuck with 30-day scripts.
In our experience with pharmacy performance on the ground, the reforms already in play have not dented dispensing income the way the early modelling suggested they would. That makes us cautious about IBISWorld’s five-year decline forecast in the report, built so heavily on reform pressure, particularly when new services and expanded prescribing are opening up fresh avenues for turnover growth. The pressures are real, but a sustained decline over the years ahead seems unlikely given what we have observed in the market.
Services are where the momentum is. The pharmacies pulling ahead are the ones expanding beyond the script, into vaccinations, health checks, chronic disease support, medication reviews and a widening scope of clinical practice. States are steadily letting pharmacists do more, including diagnosing and prescribing for everyday conditions such as uncomplicated urinary tract infections. With GP shortages persisting and more Australians turning to their pharmacist first, this is a real opportunity, and increasingly it is a point of difference between an average pharmacy and a genuinely valuable one.
The ageing population is a tailwind. Australians aged 60 and over already account for more than 60 per cent of subsidised medicines dispensed, and that group keeps growing. People under 40, by contrast, make up more than half the population but under 15 per cent of prescriptions. What that tells you is that location and demographics matter enormously. A catchment with the right age profile, and a service mix to match, is worth more than ever.
Consolidation is reshaping the top end. The merger of Sigma and Chemist Warehouse has created a genuine heavyweight, an entity valued at around $32 billion that now sits behind the branding of roughly 860 pharmacies. Banner groups more broadly are behind most community pharmacies today. For independents, that can feel like pressure. In our experience, it also sharpens the value of a well-run, well-located pharmacy with strong community trust, which is exactly what the big chains cannot replicate on every corner. The ownership rules also mean that even as brands consolidate, pharmacies stay individually owned, so the opportunities for pharmacists to buy and build have not gone anywhere.
The online channel is small but growing fast. IBISWorld tracks online pharmaceutical sales as a separate industry, and while it is much smaller, worth around $527 million, it is growing more quickly, at about 4 per cent a year, and is tipped to keep climbing to around $633 million by 2030-31. Its make-up is very different from a traditional shop. Prescription medicines are just 15 per cent of online sales, with personal-care items, vitamins and over-the-counter lines doing most of the work, and its customers skew younger. Electronic prescribing is the big enabler, and as it moves towards becoming the default, the online door opens wider. For owners, the message is not that online will replace the shopfront, but that a strong click-and-collect and delivery offering is fast becoming part of what a well-run pharmacy looks like.
So what does it all add up to? The fundamentals that have always made pharmacy a sound investment, its resilience and its essential role, are firmly intact. What is changing is where the value sits. The owners who thrive from here will be the ones who diversify beyond dispensing, lean into services, and meet customers across both the shopfront and online.
If you are buying, look as much at the upside as the current state: a solid pharmacy with room to add services and online can be just as attractive as one that already has them, because that is where you create value. If you are selling, that potential is part of what buyers will pay a premium for, alongside what you have already built. Reports like these are useful precisely because they help you see the shape of what is coming. Whether you are looking to buy your first shop, grow your group, or work out the right time to sell, there is plenty in this year’s findings to be optimistic about.
Industry figures sourced from IBISWorld, Pharmacies in Australia (July 2026) and Online Pharmaceutical Sales in Australia (March 2026).
Written by Andrew Whelan, General Manager – AP Group
AP Group are the leading pharmacy experts in Australia and specialise in helping first time buyers find the right pharmacy and secure the finance to support their purchase.
We connect existing owners with over 5000 ready and eager investors via our cutting-edge online Data Room. Our Data Room keeps confidential listing data secure and allows buyers to make informed decisions on each of our pharmacies for sale.
AP Group have built connections with all the major banks and a host of smaller lenders, ensuring that first time pharmacy buyers find a better deal.
About the Author:
When Andrew Whelan is not out pedalling his bike or looking after his two marvellous kids, he’s pedalling through pharmacy finance and strategy development.
Having been with AP Group since the beginning, Andrew has more than a decade experience in pharmacy and is an asset to the sales and finance division. He’s a numbers wizard, people person and sustainability champion — leading AP Group to achieve official Carbon Neutral Certification with Climate Active.
Before AP Group, Andrew spent more than a decade in the telecommunications and media industry including 7 years at Telstra in a variety of senior management roles and 3 years in the United Kingdom managing the commercial function for the British Sky Broadcasting — a time where it was the fastest growing broadband provider in the UK.
So it’s no surprise that he is well equipped to help customers with some of the biggest decisions they will ever make — buying a home or investing in a pharmacy — and helping to show them what’s truly possible.