Valuations
What Is My Pharmacy Worth?
Independent pharmacies face a challenging but potentially rewarding market. PBM reimbursement pressure is real, but pharmacies with specialty niches, strong community ties, and diversified revenue streams remain valuable.
Typical Valuation Ranges
Most independent pharmacies sell for 2x to 3.5x SDE.
Specialty and compounding pharmacies can command premium multiples — 3x to 5x SDE — depending on their niche.
Factors that push toward the higher end:
- High prescription volume (200+ scripts/day)
- Specialty or compounding capabilities
- Diversified revenue (OTC, DME, immunizations, clinical services)
- Long-term care or institutional contracts
- Strong community reputation with loyal patient base
- Favorable PBM contracts
Factors that push toward the lower end:
- Low prescription volume (under 100 scripts/day)
- Declining Rx count trend
- Heavy generic mix with thin margins
- PBM reimbursement pressure
- Owner pharmacist without relief coverage
- Big-box or chain pharmacy competition nearby
Key Value Drivers
Script count and trend: Daily prescription volume is the primary metric. Buyers want to see stable or growing Rx counts.
Average script margin: With PBM clawbacks and DIR fees, actual margin per script matters more than gross reimbursement.
Specialty services: Compounding, long-term care, specialty drugs, and clinical services (immunizations, MTM) create higher-margin revenue.
340B participation: Pharmacies participating in the 340B program with qualifying covered entities have a significant margin advantage.
How to Increase Your Pharmacy's Value
- Build specialty services. Compounding, long-term care, specialty drugs, and clinical programs improve margins.
- Grow script count. Marketing, physician relationships, and clinical services drive new prescriptions.
- Diversify revenue. OTC, DME, immunizations, and front-end retail reduce dependence on PBM reimbursement.
- Negotiate PBM contracts. Join a PSAO (Pharmacy Services Administrative Organization) for better reimbursement terms.
- Hire a staff pharmacist. Remove yourself from behind the counter to make the business transferable.
Browse the valuation multiples guide for industry data, or schedule a free call for a confidential valuation.
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