Do the 2026 pharmacy reforms matter when selling a pharmacy?
The short answer is yes.
The reforms themselves are principally financial and industrial in nature. In the context of a pharmacy sale, however, their consequences extend into the legal risk allocation between vendor and purchaser.
They can affect the information a vendor provides to a purchaser, the assumptions underlying financial projections, employee liabilities identified through due diligence, the warranties a vendor can safely give and, ultimately, who bears the risk if information provided during the transaction proves inaccurate or incomplete.
Two developments are particularly relevant.
1. The June 2026 Addendum to the Eighth Community Pharmacy Agreement
The Commonwealth and the Pharmacy Guild agreed to an Addendum to the Eighth Community Pharmacy Agreement (8CPA) on 12 June 2026.
From 1 July 2026, the Addendum changed the wholesale mark-up applying to medicines dispensed by pharmacists and adjusted pharmacist remuneration to offset the effects of that change.
The commercial effect will not necessarily be identical for every pharmacy. It will depend on matters including the pharmacy’s dispensing profile, revenue mix and operating model.
For a pharmacy owner preparing for sale, that creates an important transaction issue: to what extent are the pharmacy’s historical results representative of the business the purchaser is acquiring?
Historical accounts remain historical facts. But where a regulatory or remuneration change occurs between the period represented in those accounts and completion of the transaction, greater care may be required when explaining those figures or using them as the foundation for forecasts and valuation assumptions.
That distinction matters legally.
Sale contracts commonly contain warranties concerning financial records and information provided to the purchaser. Information supplied during due diligence may also have consequences beyond the express wording of the contract. Misleading or deceptive conduct in trade or commerce is prohibited by the Australian Consumer Law, and particular care is required where representations concern future performance or assumptions about future trading.
For vendors, this means understanding not simply what the pharmacy earned, but whether information being provided to a purchaser remains an appropriate basis from which to assess the business following the 1 July changes.
A purchaser’s due diligence may therefore examine:
- the pharmacy’s dispensing and revenue profile;
- the effect of the 8CPA changes on the business;
- whether historical trading remains reasonably representative;
- the assumptions underlying forecasts, budgets or maintainable earnings calculations; and
- whether those assumptions have been appropriately explained or qualified.
These questions are relevant not only to valuation. They can directly affect disclosure, warranties and the allocation of risk under the sale contract.
2. Higher pharmacy employment costs – and increased compliance exposure
Employment costs have also moved materially.
From July 2026, minimum rates under the Pharmacy Industry Award increased because of the next phase of the pharmacist pay equity adjustment together with the 2026 Annual Wage Review increase.
For a pharmacy purchaser, the issue extends beyond the resulting increase in payroll costs.
Employee liabilities are an important part of transaction due diligence. A purchaser may examine matters including:
- award coverage and employee classifications;
- minimum rates, penalty rates, overtime and allowances;
- annual leave and other accrued entitlements;
- long service leave liabilities;
- superannuation compliance;
- employment contracts and remuneration arrangements; and
- the proposed treatment of employees at completion.
The legal consequences of an historical error can be significant.
From a transaction perspective, an identified employment issue does not simply affect operating costs. It may affect the warranties requested by the purchaser, the vendor’s disclosure position and the allocation of historical employee liabilities between the parties. Depending on the circumstances, an identified liability may be addressed through rectification before completion, an adjustment to the transaction terms, specific disclosure or a negotiated indemnity.
What does this mean for pharmacy vendors?
The practical consequence of the 2026 changes is that preparing a pharmacy for sale increasingly requires the financial, employment and legal aspects of the business to be considered together.
A vendor should expect a purchaser and its advisers to test:
- whether financial information remains representative considering the current remuneration framework;
- whether forecasts and maintainable earnings assumptions have a proper foundation;
- whether employee classifications, rates and accrued entitlements are correct;
- whether information provided during due diligence is accurate and complete; and
- whether the warranties being requested are consistent with what the vendor can properly verify and disclose.
This is important because issues identified before the business goes to market can usually be investigated, quantified and addressed in an orderly way. The same issue discovered by a purchaser during due diligence can become a negotiating issue.
An incorrectly classified employee, an unexplained entitlement liability or an assumption in the financial information that has not been updated for a regulatory change may result in further due diligence, additional disclosure, a specific indemnity, an adjustment to the transaction terms or, in some circumstances, a reconsideration of price.
Preparing for a sale
For pharmacy owners contemplating a sale in the next 12 to 24 months, legal preparation should therefore begin before a purchaser’s due diligence request arrives.
That includes reviewing employment arrangements and award compliance, understanding accrued employee liabilities, ensuring that financial and operational information proposed to be provided is accurate and appropriately qualified, and considering in advance the warranties and disclosures likely to arise under the sale contract.
The objective is not to eliminate every commercial issue from the business.
It is to identify material issues early enough to investigate them, deal with them appropriately and avoid giving contractual warranties that extend beyond what the vendor can properly support.
How AP Legal can assist
At AP Legal, we assist pharmacy owners and purchasers with the legal aspects of pharmacy transactions, including sale contracts, employment and entitlement issues, warranties, disclosures, indemnities and the allocation of transaction risk.
If you are considering buying or selling a pharmacy, early legal preparation can help identify issues before they become negotiating leverage during due diligence.
This article contains general information only and is not legal advice. The application of the matters discussed will depend on the circumstances of each transaction.
Written by Stella Samuel, Solicitor – 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:
Stella is a recently admitted solicitor with more than 21 years’ experience across the banking and finance sectors, having held senior roles with ANZ, NAB, Commonwealth Bank, Equity Trustees, and Barclays Bank Group in the UK. Her background spans regulatory compliance, risk and operations, complex credit matters, and working closely with legal teams on high-value transactions.
Known for her calm and considered approach, Stella is highly analytical and deeply client-focused, helping people navigate complex matters with clarity and confidence. She holds a Juris Doctor and is admitted as a lawyer of the Supreme Court of Victoria.
Outside of work, Stella enjoys experimental cooking, reading, and listening to music.