Shoppers Drug Mart responds to Ontario's revised generic pricing rules

ONTARIO Canadian retail pharmacy chain Shoppers Drug Mart has responded to the Ontario government's decision to further drug reform measures in the province by reducing generic drug reimbursements for Ontario Drug Benefit Program beneficiaries.

The Ontario Liberal Government announced Wednesday that generic prescription drug prices for patients that benefit from the province's drug benefit program will be reduced from the current level of 50% of the equivalent brand name price to 25% of the equivalent brand name price. The announcement also indicated that planned reductions in generic prescription drug pricing would also be extended to the private sector over a multi-year period. Shoppers Drug Mart said that such changes will impact its sales and profitability and the government “will further interfere in the commercial relationships between generic manufacturers and pharmacies” and that the government will play an increased role in the regulation of private sector drug benefit programs –– programs, Shoppers said, the government does not fund or pay for.

“These announced reductions in drug pricing and pharmacy reimbursement, on the heels of significant cuts just four years ago, will only serve to further commoditize healthcare and the practice of community pharmacy at a time when Ontarians need it most,” said Jurgen Schreiber, Shoppers Drug Mart president and CEO. “These announced changes reinforce our view that in the long-term, the successful players in retail pharmacy will be those with size, scale and an ability to leverage operating efficiencies. Shoppers Drug Mart, with the largest integrated pharmacy network in the country and the leading market share, will be challenged in the short-term to adjust to the changes announced [Wednesday], but remains well-positioned for the long-term.”

Discussions regarding changes to the Ontario Drug Benefit Program have been underway for more than nine months, Shoppers said.