Cost-lowering drug reform expected to hit Shoppers

From the Globe and Mail:
Proposed drug reforms in Ontario could pinch the bottom line of Shoppers Drug Mart Corp. and other pharmacies - and eventually have a ripple effect on drugstores across the country.

The Ontario government quietly introduced proposals this month that could reduce funding it provides to pharmacies while promoting new ways of pricing and distributing drugs in a bid to lower provincial drug costs.

Yesterday, Shoppers, the country's largest pharmacy chain, flagged the reforms as ones which "may have an adverse impact on the company's business, sales and profitability," while releasing its second-quarter results, which were respectable amid the recessionary climate. The proposed reforms could be implemented as early as this fall.

Jurgen Schreiber, chief executive officer of Shoppers, told analysts it's too early to assess the impact. But he said Shoppers also wants to trim pharmacy costs, so he welcomes the discussions with the Ontario government over the next month to find "joint solutions." ...more