Just days after the Ontario health minister unveiled plans to halve the reimbursement rate for prescriptions filled with generic drugs, the two largest chains in the province altered their operations to deal with the expected loss in revenue.


Ontario health minister, Ontario Drug Benefit Program, Shoppers Drug Mart, SDM, Katz Group, Rexall, drug chain, drug store, pharmacy, pharmacy funding, generic drugs, Richard Monks














































































































































































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Drug chains react to Ontario pharmacy funding cuts

April 19th, 2010

TORONTO – Just days after the Ontario health minister unveiled plans to halve the reimbursement rate for prescriptions filled with generic drugs, the two largest chains in the province altered their operations to deal with the expected loss in revenue.

Shoppers Drug Mart Corp. (SDM) cut the hours of operation at seven of its stores in southwestern Ontario and said it would begin charging patients for home delivery.

Katz Group, the operator of Rexall and drug stores under other banners, immediately implemented a hiring freeze that included the elimination of pharmacy student and intern programs.

The seven SDM stores, all in London, Ontario, have begun closing earlier, and two of the units have implemented so-called lock-and-leave policies, shuttering their pharmacies before the entire store closes for the day.

SDM, which has more than 600 stores in Ontario, says it will review its operations, “market by market” across the province and could begin trimming the hours of stores in other markets as well.

“The decision to reduce our operating hours in the London market was a difficult one,” president and chief executive officer Jürgen Schreiber said.

The drug chain’s decision to close its London-area stores earlier came less than a week after the Ontario government unveiled sweeping changes to the way pharmacies are compensated for the generic drugs they dispense to patients covered by the Ontario Drug Benefit Program.

Whereas pharmacies were paid 50% of the branded price for each generic drug they dispensed, the new formula would see them get only 25% of the price of the branded version of the drug.

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