A new regime of pharmacy ownership in Italy: opportunities opened for investors

Main provisions of the new law

The main amendments introduced by the new law to the previous legislative framework can be summarised as follows:

(i) companies are allowed to own a pharmacy, while under the previous legislation, only natural persons and associations among natural persons were allowed to own a pharmacy;

(ii) holding shares of such companies is incompatible with the execution of any activity in the field of manufacturing and scientific information of medicinal products, as well as with the exercise of the medical profession;

(iii) the pharmacy director must be a pharmacist to protect the consumers’ interest, but it is no longer required that the director is a shareholder/owner of the company;

(iv) it is now allowed to own more than 4 pharmacies within the Province where a company has its headquarter;

(v) a new limit on regional basis was introduced: a company cannot control, directly or indirectly, more than 20% of pharmacies in the same region or autonomous province. This means that, under condition that this regional limit is met, a company may own an unlimited number of pharmacies across the country; and

(vi) pharmacies have full freedom to establish opening hours additional to the minimum hours fixed by the law, under condition that they previously inform the competent authorities.

Some open issues

This law has not amended other aspects of the previous rules, which are not directly related to the ownership regime. Notably, rules on the opening of new pharmacies, transfers, awarding rules, etc remain unchanged. This may trigger some difficulties in coordinating the old regime with the new rules. In particular, the decision not to change the rule applicable to the transfer of pharmacy ownership (that is not ordinarily transferable before the three year-term from the granting of the authorization is expired) is questionable, because these limits do not seem to be consistent with the purpose of the new law – to improve competition in the sector.

Conversely, the fact that the Law No. 124/2017 specifies that the companies’ articles of association and any subsequent variation, including those relating to the shareholders, shall be notified, within 60 days, to the competent authorities (Federation of Italian Pharmacists’ Orders, regional government, provincial order of pharmacists and local health authority) implies that a shareholder variation should be allowed. However, this should be further clarified in the new legislative framework, with particular regard to the cases of specific company events, such as mergers or incorporations or changes of control.

Another issue that might give rise to some difficulties concerns the old incompatibility requirements that, according to Law No. 124/2017, apply to the companies as far as they are compatible. It is clear that pharmaceutical companies are prohibited from holding shares of pharmacies; it is less clear, for instance, whether this ban also applies if the participation is not direct.

New opportunities for investors

The new legislation on pharmacies’ ownership opens new opportunities for Italian or foreign companies interested in investments in this sector. This new possibility of being awarded an authorization to open and manage a pharmacy means that companies can own an asset of significant value.

In the short term, since the new law has not amended the procedures and the quantitative limits for the opening of new pharmacies, the main opportunities concern the acquisition of existing ones, provided that the conditions for the transfer of the authorizations are fulfilled. In the medium term, when new competitive procedures for the opening of pharmacies will be opened (expected in 2019), companies will be allowed to bid for the awarding of the authorizations and this may gradually change the current system of distribution of medicinal products in the Italian market.