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Pharmacy owners: Two steps before moving forward with an acquisition

The healthcare marketplace is always changing and one way for business leaders to stay at the forefront is with strategic acquisitions. The right acquisition can fuel growth and expansion. Mark Cuban and his recent pharmaceutical venture Cost Plus Drug Co. recently provided an example after moving forward with a deal with Albertsons. The pharmaceutical company is working with the grocery chain to ensure it can offer its services in over one thousand of the store’s locations throughout the country.

Business leaders considering a partnership or acquisition in this sector, either of a pharmacy or other organization to fuel the growth of a current practice, are wise to review potential legal implications. These should include a thorough due diligence review of the target company’s history of regulatory compliance and any potential liabilities.

#1: Regulatory compliance

It is important to review any target acquisition’s compliance with federal and state laws, including licensing and prescription drug monitoring. The acquiring party is wise to review the target organization’s adherence to various regulations, including the Health Insurance Portability and Accountability Act (HIPAA) and the Controlled Substances Act (CSA).

#2: Liabilities

Potential buyers must investigate the target company’s financials, contracts, and legal obligations. Watch for pending litigation or unresolved regulatory issues, which may significantly affect the acquisition’s value.

Healthcare acquisitions involving pharmacies are complex transactions with significant legal implications. The potential for improved business opportunities and patient services must be weighed against the possible risks. Both buyers and sellers must complete their due diligence to help better ensure a successful acquisition that benefits all stakeholders.