Thinking of Buying a Pharmacy in Australia? Here Are 3 Vital Questions to Ask
Australia’s pharmacy industry plays a vital role in primary healthcare, with over 6,300 establishments generating $26.5 billion in revenue in 2025 and employing more than 74,000 people.
Despite a mature market, new reforms, changing consumer habits, and major consolidations — such as the 2025 Chemist Warehouse–Sigma Healthcare merger, forming a $32 billion retail and distribution giant — are reshaping competition.
Industry profitability stands at 6.5%, though margins are tightening under new 60-day prescription rules and rising operational costs. Nonetheless, pharmacies are evolving into health hubs, offering vaccinations, health checks, and chronic disease support services that are expected to fuel 1.9% annual growth to 2031.
1. How Financially Stable and Diversified Is the Pharmacy’s Revenue Mix?
Why It Matters:
The introduction of 60-day prescriptions has reduced the number of customer visits, cutting foot traffic and dispensary fees. Pharmacies that rely heavily on PBS dispensing income face greater risk, while those expanding into health services and retail product lines maintain steadier revenue.
What to Check:
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Revenue base – Industry revenue totals $26.5 billion, forecast to reach $29.2 billion by 2031, driven by an ageing population and growing healthcare needs.
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PBS dependence – Over 95% of scripts are subsidised under the Pharmaceutical Benefits Scheme. Policy changes can directly affect profitability.
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Retail diversification – Front-of-store items (cosmetics, vitamins, and health foods) now represent around 25% of total sales. A drop in customer visits can significantly affect these higher-margin products.
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Service expansion – Pharmacies offering vaccinations, diabetes checks, and contraceptive resupply are generating new income streams supported by government programs such as the Eighth Community Pharmacy Agreement (8CPA).
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Profit structure – Average profit margins sit at 6.5%, but can rise to 9–10% for pharmacies with strong retail performance and local health partnerships.
2. Does the Business Have Strong Competitive Positioning and Brand Alignment?
Why It Matters:
Competition is intensifying as discount and banner-group pharmacies dominate. Independent stores must stand out through service quality, customer care, and community integration.
What to Check:
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Market structure – Over two-thirds of pharmacies now operate under banner or buying groups such as Amcal, TerryWhite Chemmart, Priceline, or Blooms the Chemist, providing shared branding and supply-chain efficiency.
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Major players – The Chemist Warehouse–Sigma merger now controls 16% of all pharmacies, setting new retail pricing and scale benchmarks.
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Customer loyalty – Local reputation and personalised service remain powerful differentiators in suburban and regional areas.
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Store model – Warehouse-style outlets focus on price and volume, while traditional community pharmacies compete on advice, relationships, and clinical services.
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Location rules – The Pharmacy Location Rules restrict store proximity and supermarket access, protecting existing operators from over-saturation.
3. Is the Pharmacy Positioned for Regulatory, Technological, and Demographic Change?
Why It Matters:
Pharmacies are moving from medicine dispensaries to integrated health providers. Those adopting digital health tools and service-based models are better positioned for long-term resilience.
What to Check:
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Digital innovation – Platforms like GuildCare and MediRecords enable e-prescriptions, patient monitoring, and telehealth consultations. Delivery services such as Packapill and PharmOnline are also driving convenience-based growth.
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Ageing demographics – By 2030, nearly 19% of Australians will be over 65, boosting demand for chronic disease management and medication reviews.
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Government support – Under the 8CPA, the government is allocating $22.5 billion for dispensing and $1 billion for expanded services through 2029.
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Scope of practice – State pilot programs in Queensland and Victoria allow pharmacists to prescribe for common ailments like UTIs, with national expansion expected.
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Environmental resilience – Regulatory stability and low volatility make pharmacies attractive, with barriers to entry remaining high and long-term demand secure.
Ready to Invest in a Thriving Pharmacy Business?
With stable long-term demand, strong government backing, and a shift toward health services and technology, pharmacies remain one of Australia’s most resilient small business investments.
Sustained success depends on diversification, clinical expansion, and adapting to new dispensing and digital service models that align with Australia’s evolving healthcare system.
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