Banks to gain confidence from 7CPA

FUNDING guarantees written into the Seventh Community Pharmacy Agreement (7CPA) are likely to increase lenders’ confidence in the sector, Attain Business Brokers Director, Natalie Sirianni, believes.

Speaking during the latest Siranni Market Update, she said the new deal provided certainty for aspiring pharmacy owners and banks alike.

“From a market point-of-view the key thing [from the 7CPA] is certainty,” she said.

“Buyers have the certainty around the next five years of operation, around remuneration and around rules - obviously the Location Rules were left as is.

“That kind of certainty brings more demand from buyers.

“What we also see [when a CPA is signed] is increased confidence from the banks as well.

“That allows buyers more confidence when they’re borrowing money and hopefully means easier access to finance.

“Obviously COVID is in the backdrop of this and the banks are dealing with a lot of uncertainty at the moment in general, but in the pharmacy landscape with the signing of the 7CPA we’ve got a lot of certainty.”

Sirianni noted that while there had been opposition to continuation of the ‘dollar discount’, “we don’t see that as too much of a concern from our clients”.

She added that the key feature of the agreement was the exclusion of any mention of 60-day dispensing.

“There was a lot of concern around that late last year and early this year,” she said.

“Obviously, that not being included was a big win.

“It was something that was shown during COVID that the supply chain couldn’t keep up with it, and it didn’t work in times like that.

“We had insights from the Pharmacy Guild of Australia, based on APP Online discussions, that it wasn’t going to be in there, but it was a great win to not have it in the agreement.”