Hospitals Postpone Opening In

News Highlights

There is a growing trend of hospitals reconsidering or withdrawing plans to open pharmacies within their premises. This is driven by the 2024 fiscal year medical fee revision, which halved the dispensing fees for in-hospital pharmacies and abolished previously granted special exceptions. Consequently, the profitability of these pharmacies has significantly declined, potentially forcing existing pharmacies to review their business operations.

M&A Medical Editorial Department’s Perspective

The impact of this medical fee revision on in-hospital pharmacies extends beyond a mere reduction in revenue; it serves as a catalyst for healthcare institutions to re-evaluate their overall management strategies. For institutions that have positioned in-hospital pharmacies as a source of profit or a means to enhance patient convenience, this revision fundamentally alters that premise. For instance, the halving of dispensing fees drastically cuts into anticipated profits, potentially leading to operational losses. This situation is likely to influence the valuation of pharmacy businesses in M&A, necessitating a review of the basis for calculating acquisition prices. Furthermore, pharmacy groups that have benefited from economies of scale, such as maintaining facility standards and distributing the burden of capital investment through group operations, may need to reassess the profitability of individual pharmacies and consider business restructuring or consolidation. The utilization of tax schemes, such as transitioning to specific medical corporations or social medical corporations, also becomes a point to be reviewed in light of these changes in the business environment.

Key Issues Highlighted by This News

• Reduced profitability of in-hospital pharmacies due to medical fee revisions shakes the foundations of management.
• The sustainability of in-hospital pharmacy operations is questioned due to halved dispensing fees and the abolition of special exceptions.
• The benefits of group operations require re-evaluation based on individual profitability assessments.
• Potential impact on the valuation of pharmacy businesses in M&A deals involving healthcare institutions.

Practical Questions Arising from This News

• For those operating in-hospital pharmacies, how much will revenue decrease due to this revision?
• Should current plans for opening in-hospital pharmacies be canceled due to this revision?
• How will the synergy between existing dispensing pharmacy businesses and hospital management change in the future?

If You Feel You Should Consult

Healthcare institution executives whose management is strained by the declining profitability of in-hospital pharmacies, or who feel future uncertainty, should take this opportunity to review their current business portfolio and future strategies. M&A can be an effective means to concretize options such as business restructuring, management efficiency through group operations, or withdrawal from unprofitable businesses. Why not consider the optimal succession and restructuring scheme for your institution with the help of experts?

M&A Medical (CentralMedience Inc.) supports the business succession of medical corporations, hospitals, and clinics as a Small and Medium Enterprise Agency-certified M&A support institution, with a completely success-fee-based service. Consultations are handled with strict confidentiality. Free consultation here