Bad Prescription for the People

The Government gets its Way and YOU PAY

Outside of the spectacle most PC MHA's displayed in the House of Assembly last week - regarding the change in generic drug pricing - we have a much more serious problem.

That session of comedy revealed an underlying weakness in our political leadership.

I will let the reader decide if stupidity, corruption, indifference, or vindictiveness is the cause.

First let's agree on a few things.

The following are the essentials of life for people in our province:

1. Food
2. Shelter/Housing
3. Energy
4. Transportation
5. Health Care - including Prescription Medications

Today we will deal with number 1.

The price of food is of primary concern to the vulnerable people of our society. Individuals and families living on fixed low incomes are challenged every day to eat - let alone eat healthy.

Every week when one shops at the supermarket one notices the increase in the price of food. 

Food prices rose 4.1% on a year-over-year basis in February, following a 4.2% increase in January.

What is the response of the Government of Newfoundland and Labrador? Nothing! They rely on provincial food banks to hold people over from week to week.

Supermarkets receive rebates for purchases and particular shelf space so there is money in the system to reduce the price of food.

Considering that government (taxpayers) help low to no income people and families through income assistance - in part to buy food - then one would think government would direct food manufacturers to lower the price of generic food. Example - a tin of Carnation milk (brand) compared to a tin of Our Compliments milk (generic). Price of Carnation milk $1.50 and Price of Our Compliments $1.25. Therefore the generic tin milk is priced at 83% of brand. So if the Government of Newfoundland and Labrador lowered the price to 45% of brand then the generic tin of milk would cost 68 cents. Now we're talking.

Then if Dunderdale continued on and lowered the generic milk price to 35% of brand then the price would be 53 cents a tin.

Now if a person or child does not react well to the generic milk and finds that Carnation is the only one they can consume then a special authorization would be needed from government so that they can get enough money to pay for Carnation milk.

While the special authorization is approved - Mr. Sobey could give the customer the milk until the person is approved in 4 weeks. In either case Mr. Sobey would have to wait a week to be paid for the generic milk.

The question is will Tom Marshall, Kathy Dunderdale, and Susan Sullivan ask Mr. Sobey to sharpen his pencil?

For those of you not on any form of income assistance - your price would be lowered too. The Government of Newfoundland and Labrador when regulating prices - apply that price reduction to all citizens.

Do you think the supermarkets can afford to lower their prices?

For many medical conditions - a proper and healthy diet is essential. If the person is a diabetic - incorrect food choices could mean the difference between $1500 dollars worth of drugs a year and $15,000 dollars to keep the disease in check - including otherwise unnecessary stays in the hospital or by a worsening of the disease.

So the biggest problem in Newfoundland and Labrador today is the small independent pharmacy - the same people who day after day ensure people do not go without medications? The pharmacies that have a rotating credit for customers at about $20,000 per pharmacy - the pharmacies that are there whenever they are needed. The pharmacies who have provided free essential services to the people under their care.

Meanwhile the price of generic drugs are going down through competition and are reducing the price of drugs government pays for by replacing brands.

I watched a group of MHA's who were elected to represent people - stand up an speak about something they knew nothing about. The ignorance was incredible. Unfortunately - this means the decisions made are not going to bring the stated desired result.

The government chose this time not to listen to Dr. Wade Locke or the people who are experts in pharmacy services. This time they listened to unknown sources of information but were lobbied by brand companies.

Make no mistake - the money - if any - saved on the generic price changes will be gobbled up by oil and gas giants, mass retail and grocer corporations, and brand drug houses.

Make sure you have the number for your MHA handy as changes occur. It is he or she that has caused the problem.

Changing the face of pharmacy - is not the prescription you need.

Newfoundland and Labrador Govt. delivering for Shoppers Drug Mart

Shoppers CEO predicts DOOM for Independents

The Newfoundland and Labrador government is about to serve a central Canadian company - local businesses on a platter.

With 100 million local dollars invested in the provincial economy - independent pharmacies have been told by their government that they don't matter.

As witnessed in the House of Assembly - PC Cabinet members and backbenchers chided these local owners with calls to show their T-4's and state where they take vacations.

The general assertion of government is that independents are filling their pockets with rebates.

Despite the lies and misleading statements by these politicians - Shoppers Drug Mart's CEO is backing up what the independent stores  have been warning against.

In the Globe and Mail yesterday Domenic Pilla spells it out clearly for all to see.
 

“We are facing the single worst commercial environment that the drug sector has ever faced … But who is in the absolute best position in Canada to weather that – in some cases to take advantage of that? It’s Shoppers Drug Mart.”

He said that as the country’s largest drugstore chain, Shoppers is best positioned to navigate the road ahead, with economies of scale to help it lower its costs.

And he wants to buy competitors as reduced government reimbursements start to squeeze smaller rivals, he said. “That’s a freight train accident waiting to happen. How it will happen and how quickly it will happen ... is something that is still to be told.” 

His estimated that Shoppers pharmacies probably could add another 30 per cent more prescription files without having to invest in fixed costs. “That would make acquisitions for us very accretive.”

Newfoundland and Labrador's Minister of Innovation, Business and Rural Development might want to look long and hard in the mirror today - as he personally participated in the likely destruction of local investors. 

As Shoppers talks about chewing up local businesses - it does so while saying they don't have to invest a cent in fixed assets. The government of Newfoundland and Labrador is clearly stating their position on local business and investment. 

To top it all off the monies lost to the treasury - particularly monies needed for health - will far outweigh any potential savings to the government from their new generic drug pricing model. 

Further the services provided by these independents - that will be lost from the policy will cost the government tens of millions more. 

Particularly puzzling is the government's insistence that these independents sit at a table with Shoppers employees and come to a common position. What might that be? We the independents agree to turn over our investments to you as cheaply as we can? 

The buffoonery in the House of Assembly underscores the actual ignorance or complicit behavior that will in the end ruin local business, diminish front-line health services, and drive the costs of those services through the roof. 

Bravo - why not stand in your place and take a bow.

Government Ignores Reality - will cost Seniors and Families

News Release

New Pricing Scheme Threatens Rural and Inner-city Services

For immediate release, St. John’s – 26/03/2012

Minister of Health Susan Sullivan is demonstrating a dangerous level of ignorance as she adopts a health policy that will irreparably harm front-line health care delivery in rural communities and inner-city neighbourhoods. 

The changes proposed to the generic pricing model to keep up with other provinces in Canada ignore the social demographics, geography and specific needs of Newfoundland and Labrador.

The Council’s spokesperson, Robert Doyle says, “Do we want Newfoundland and Labrador to spend more - per-capita - on generic drugs? No! But will the Dunderdale government achieve lowering the costs by simply copying the models of other provinces? No!” 

Here's why:

1. Our population is aging more quickly and therefore there is a greater requirement for chronic disease medications. 

2. The prevalence of conditions such as diabetes is higher in our province.

3. The lack of medication and disease management programs involving community pharmacy. 

Doyle adds, “The Government of Newfoundland and Labrador will not lower health care costs they will grow them. The Government of Newfoundland and Labrador will lose any ability to provide medication and disease management programs in rural areas and in the inner-city. The Government of Newfoundland and Labrador will lose informal collaborative medication and disease management currently taking place in independent pharmacies.” 

The Council believes this is not an issue of escalating drug prices – as the prices are going down every year as more generics enter the marketplace and through natural competition among generic manufacturers. This is an issue of poor policy review, research, and planning.

The government tried to buy the silence of pharmacies by signing a non-binding amending agreement with the Pharmacists’ Association of Newfoundland and Labrador. It does nothing for the viability of independent pharmacy and is an insult to local small business. 

“The Minister either does not understand or refuses to see the inherent problems in the government’s plan. The government does not have the information it needs to make this decision and it will result in unintended consequences”, Doyle says. 

Government says it will save tens of millions of dollars from a generic drug price reduction – that is not the case.  While generic drugs are being used in the majority of prescriptions filled they make up less than 40% of costs to the program. 

Doyle states, “If government wants to make a real difference in current costs and sustain costs in the future they must look at increasing generic utilization and developing – with pharmacy – a real medication and disease management program.” 

The Council is holding a meeting of its members within the next week and decisions regarding the next course of action will be discussed and ratified at that time.

The first decision has already been made – the Council will engage Dr. Wade Locke to do a thorough analysis of the situation and to develop a made in Newfoundland and Labrador solution.

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Additional Information

The CICPO represents the majority of independent pharmacies in Newfoundland and Labrador.

The CICPO members are located throughout Newfoundland and Labrador and are the only model of pharmacy available in dozens of regions.

Independent pharmacies average 10% front-store sales (other than prescription medications) and 90% back-store (prescription medications) in its sales mix.

Chain drugstores and mass retailers; Shopper’s Drug Mart, Lawton’s/Sobeys, Walmart, Zellers, Costco, and Loblaws range from a 50/50 sales mix with many averaging over 90% in front store sales.

The changes to the generic pricing policy will severely affect independent pharmacies while the chain drugstores and mass retailers gain opportunities to consolidate the marketplace.

Chain drugstores and mass retailers have buffers from revenue loss such as:

a)      In-house wholesale

b)      Front shop sales

c)       Private label generic drugs

d)      Mass purchasing power

This gives the chains and mass retailers a governmental regulated advantage over Newfoundland and Labrador pharmacies.

Government’s negotiation with PANL does not bind corporations and therefore may result in a rejection of the government drug card.

Private Insurance companies negotiate directly with business which is contrary to the position of the Government of Newfoundland and Labrador – which negotiates with a professional body that has no corporate authority to negotiate.

Generic drug prices have been reduced over the past five years from 70 per cent of brand to 50 per cent of brand through natural competition. Generic drug prices are going down every year. It is the only area of reduced costs in the Health system.

The Government of Newfoundland and Labrador has not completed a review on the potential unintended consequences of this policy and does not have any information that rural and inner-city independent pharmacies can survive this cut to revenues.

Economist Dr. Wade Locke believes that a complete study should be undertaken before this policy is adopted – including developing an optimum model for Newfoundland and Labrador considering – demographics, geography, services, and pricing.

Nova Scotia - Take Heed Newfoundland and Labrador

Let's see if the Government of Newfoundland and Labrador follows the lead of provinces such as Ontario and closer to home Nova Scotia.


Generic price caps blamed for closure of Nova Scotia village pharmacy
 
(Carol Moreira - CanadianHealthcareNetwork)
 
The only pharmacy in the Nova Scotia village of Lawrencetown will close this summer and critics are blaming the cap on the price of generic drugs, introduced last year.

Pharmacy co-owner Rob Perry told the Chronicle-Herald that lower generic prices played a role in the store's closure, although rising costs and falling income also contributed.

"Economically, it's just not feasible. It's more expensive to run a business than it was two years ago," Perry said. The Lawrencetown Pharmasave opened in 1955 and will close on June 30th.

Allison Bodnar, executive director of the Pharmacy Association of Nova Scotia said the Lawrencetown Pharmasave is the first closure, but many pharmacies are suffering because of the cap on the price of generics sold to Pharmacare recipients.

 "Reduced hours, staff layoffs, reduced services and even further closures can be expected as the final legislated price cuts take effect this summer," Bodnar said.

Are You getting all the News you Need?

News Release CICPO

23/012/11 St. John’s for immediate release:

CICPO to ask Government to remove Shopper’s Drug Mart Private Label Generics

Ontario Court of Appeal upholds ban on Sanis Products

The Council of Independent Community Pharmacy Owners will formally ask that government remove Sanis generic drugs from the provincial formulary. This follows a decision by the Ontario Court of Appeal that sided with the Government of Ontario. The court said it agreed that the province could reasonably conclude private label generics would reduce competitiveness and drive up prices.

“This is what the Council has advised the Government of Newfoundland and Labrador. This is only one of many concerns we have regarding a pharmacy chain manufacturing its own generic medications”, says Executive Director Sue Kelland-Dyer. 

The provincial government listed Shopper’s Drug Mart generics on the formulary last year, disregarding the legal challenge that was moving forward in Ontario. Kelland-Dyer states, “The CICPO was surprised that Minister Jerome Kennedy moved so quickly to accommodate the large national chain when it moves so slowly to list other generics – thereby wasting hundreds of thousands of health care dollars.”

The Winnipeg Free Press also reported the following statement regarding the ruling:

“BMO Capital Markets analyst Peter Sklar said the Ontario ban won't prevent Shoppers from selling Sanis products in other provinces where they are permitted. In addition, the volume discounts that the retailer gets from its contract drug suppliers will probably offset the revenue it lost when the province banned the fees to it from generic manufacturers.”

“We can take from this that people in our province are expected to protect the stock value of Shopper’s Drug Mart instead of developing policies that protect people and local pharmacies in rural and inner-city neighbourhoods”, concludes Kelland-Dyer.

Complete Court of Appeal Decision: http://www.ontariocourts.on.ca/decisions/2011/2011ONCA0830.pdf

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Update Dr. Wade Locke addresses the CICPO

This is a note to advise that an update will be posted over the next week or so regarding Dr. Wade Locke's address to the Council of Independent Community Pharmacy Owners at the 2011 AGM.

I will post the power point presentation.

It was an excellent presentation with very timely information.

Unfortunately the Telegram story did not focus on many important points - rather singled in on a question and answer between Dr. Locke and one pharmacy owner.

It is significant to add that Dr. Locke specifically pointed out that he gave the presentation during a very busy time in his year and without a fee - as he thought it was an important event and issue. He certainly contributed a great deal to the pharmacy owners attending and all were appreciative.

Please check back for the updates.

In the meantime I will be posting pictures of the event over the next few days. The following pictures were taken by Todd and Josephine Squires - Todd was this year's recipient of the Pharmacy Owner of the Year Award.

Dr. Wade Locke

 

Some of CICPO Owners accepting their Nu-Quest Pharmacy Service Awards presented by Board Members 

  

 

 

Phil O'Keefe and Robert Doyle

 

Many more pictures to come - stay tuned.

New Talk Show takes on the Pharmacy Issue, Saving Money while maximizing Health Outcomes

Listen to "Talk with Sue and Shannon" Newfoundland and Labrador's newest talk-show this Sunday evening at 8 pm NL time as they explore the pharmacy issue.

There will also be a pharmacist/owner on hand to answer questions about the independent pharmacy model, medication and disease management (diabetes, cardiac, asthma, and other chronic disease), pharmacy services, the court challenge, other provinces, generic drugs versus brand name, saving money for government and patients/customers and the role of pharmacy in the future.

Find out where there are inefficiencies in the government system that are wasting tens of millions of taxpayer dollars.

Please take the time to listen in and become involved in this area of front-line health that affects you, your family, and community.

To take in the show please PRESS HERE

What happened to the Ontario Community Pharmacies Coalition?

The Ontario Community Pharmacies coalition - the love in that was supposed to bridge the gap between the mighty chains and independents appears to have gone up in smoke.
 
If you go to their once active website HERE you will notice the page can no longer be found. The joint material is no longer available.

Here's the "Reader's Digest" so to speak - version of events.

In 2006 the Government of Ontario were rattling the cages of pharmacies by introducing changes to the law regarding the pricing of generics - similar to what the Government of Newfoundland and Labrador has regulated here.

Knowing the devastation that would be caused to independent pharmacy - particularly in rural areas and inner-city pharmacy - independent pharmacies in that province formed the Independent Pharmacy of Ontario to get the message out to the public.

The IPO headed by Ben Shenouda were beginning to make headway as their Public Relations campaign was meeting with good public support. The government was under pressure to do things differently as the people of Ontario generally trusted and agreed with their local independent pharmacies and wanted to have that model protected.

In a clever move by both the Government of Ontario officials and the Canadian Association of Chain Drug Stores - they "con"vinced the independents to come sit at the table together. The IPO dropped its PR campaign and joined with the CACDS the Ontario Pharmacists' Association to form the Ontario Community Pharmacies Coalition to speak with a "united" voice.

A new PR campaign was launched where essentially big chains and retailers were asking the public to support their significant profits and model and in the process - the real plight of the independent stores was lost. that PR campaign was a disaster and the Ontario government came in guns ablazing and hacked the revenues of the pharmacies.

That was then - this is now.

The independents are hurting if not closing, they are cutting back hours, laying off staff, and eliminating or putting a price-tag on services which were once free to the public is a desparate attempt to survive.

Meanwhile as demonstrated in our last post - the big players like Shopper's Drug Mart are out for the slaughter - the cheaper the better.

Please review the Shopper's Drug Mart positioning below:

also plans to seize the opportunity to buy out independent pharmacies that are even more vulnerable

The positive is, we firmly believe there will be a strong opportunity delivered by drug reform that will allow us in a greater way to be a consolidator of the marketplace

Local druggists lamented that some would inevitably have to close down because prescription sales make up a bigger percentage of their sales mix and they wouldn't be able to absorb the hit to their profits. 

And that vulnerability is where Shoppers sees opportunity in the reforms. 

Pilla told analysts Shoppers plans to be "extremely active in the market" as it watches more independents forced into selling as the drug reforms work their way through their balance sheets.

That does not sound like a nice group of people to be planning the future for independent owners and the people they serve right?

Well considering that just months ago - they were holding hands - to present a unified front - we went back to visit the Coalition to see how they were making out.

The web page is no longer there. The kinship appears to have been doused with very cold water - aka reality.

Rural communities that lose a pharmacy may well see a robot soon if not already, the once tremendous model of independent pharmacy is in the fight of its life, and the people of Ontario - if Shoppers and others have their way will one day soon be dealing with a monopoly of chain giants.

We probably don't need to tell you where that will go - right out of the customers pockets as the competition will have been drained away.

Of course Shoppers and the chains will not stop there - any little independent left will be forced to buy their drugs from chain competitors as they now have the right to produce and supply their own private line of generic drugs. The Government of Newfoundland and Labrador has already allowed that here and if they keep it up - your pharmacy may no longer be able to serve you in the manner which is best for you.

So much for sitting at the table with those who ultimately want to eliminate you. Should we expect they will make a deal that's good for independent pharmacies? It has not happened anywhere else. That is why CICPO is fighting hard - to ensure that we have equitable and superior pharmacy services available to all people in our province - regardless of where they live, their mobility, their age, or their insurance status. We are working equally as hard to find solutions for government that would save the monies they would like to save.

They just won't talk - and there's a reason for that - and that reason is not good for the people of Newfoundland and Labrador. Tell us what does the Pharmacists' Association of Newfoundland and Labrador have to say about the comments made this week by the CEO of Shopper's Drug Mart? The silence is deafening.

This is Why - PANL will not work for Independents.

Please read below and you will understand why sitting at a table with large chains and retailers does not make business sense to independent pharmacy owners. Perhaps the new PANL President could weigh in here and advise Shoppers Drug Mart that they cannot be so overtly aggressive toward independents.

Shoppers Drug Mart hit by drug reforms, but also sees takeover opportunities

By Sunny Freeman, The Canadian Press  | November 09, 2011

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TORONTO - Shoppers Drug Mart Corp. (TSX:SC) is bracing for a profit squeeze from more reforms to generic drug sales next year, but also plans to seize the opportunity to buy out independent pharmacies that are even more vulnerable. 

"It's the company that's absolutely best positioned to take advantage of opportunities that are going to (result) from drug reform and other macro trends in the Canadian market," Domenic Pilla, the new president and CEO of Shoppers told analysts on a conference call Wednesday.

Changes in several provinces including the huge markets of Ontario, Quebec and British Columbia have reduced generic drug prices to 25 per cent of the price of patented drugs — down from 50 per cent — by cutting professional allowances that drug companies paid to pharmacies for stocking their pills.

The first phase of the reforms, which made generic drugs cheaper for patients on government-assisted plans, has taken a toll on Shoppers revenue this year. It has managed to churn out modest quarterly growth by compensating with more non-prescription sales.

The Toronto-based company reported Wednesday that third-quarter profits rose more than 11 per cent to $172 million as revenue grew a modest 2.1 per cent from the quarter in 2010, due to strong "front of store" sales.

Shoppers has long sold a range of health, beauty and other household items and expanded into grocery in recent years to supplement "back of store" pharmaceutical sales.

Brad Lukow, Shoppers chief financial officer said the full impact of drug reform on Shoppers earnings has not yet been felt. 

Legislative reform has yet to take place in a number of provinces, and a second phase will be implemented in Ontario and B.C. in April.

The new changes will expand the cheaper prescription regulations to cover all patients purchasing pills, either out of pocket or using insurance plans.

"That's the negative," he explained. "The positive is, we firmly believe there will be a strong opportunity delivered by drug reform that will allow us in a greater way to be a consolidator of the marketplace." 

A similar strategy is being used by Jean Coutu Group (TSX:PJC.A), Quebec's largest pharmacy chain. The two companies compete in some areas of the country but CEO Francois Coutu said recently that he wasn't concerned about facing the larger Toronto-based drug retailer.

Shoppers, which is Canada's largest drug store chain, banded together with independent pharmacies last year to stop generic drug reforms. 

Shoppers said the move would cost an estimated $750-million a year in revenue, which it has been working to offset through ramping up front of store sales.

But independent pharmacists warned that in their stores, the consequences would be much more dire. 

Local druggists lamented that some would inevitably have to close down because prescription sales make up a bigger percentage of their sales mix and they wouldn't be able to absorb the hit to their profits. 

And that vulnerability is where Shoppers sees opportunity in the reforms. 

Pilla told analysts Shoppers plans to be "extremely active in the market" as it watches more independents forced into selling as the drug reforms work their way through their balance sheets. 

There has so far been no frenzy to buy up smaller chains due to the uncertainty affecting the whole industry, Pilla said.

But he expects a "kick up" in consolidation activity when the second phase of drug reforms hits, creating an "economic perfect storm" for some independent stores. 

"What we are seeing is a lot more activity in the market and that augurs well for potentially having a lot more deals done in 2012."

Shoppers earned $172.4 million, or 80 cents per share in its latest quarter, up from $154.7 million, or 71 cents per share, in the quarter a year ago.

Excluding the impact of a $3-million, one-time gain due to a sale leaseback deal at some stores, earnings would have been $170 million, or 79 cents per share.

That was in line with analysts expectations for adjusted earnings, according to Thomson Reuters.

For the third quarter, analysts on average had been expecting revenue of $3.16 billion and the chain delivered.

Revenue was $3.1 billion from $3.05 billion a year ago. On a same-store basis — a key measure in the retail world — sales were up by 1.5 per cent.

Prescription sales rose by 1.5 per cent to $1.5 billion in the third quarter, as the volume of prescriptions improved by 3.6 per cent.

But the growth was largely offset by a decline in the average drug price due to the legislation reducing generic prescription reimbursement rates.

Meanwhile, generic prescriptions continued to grow. The cheaper alternatives made up 57 per cent of prescriptions in the third quarter, compared with 55 per cent a year ago.

As the company works to ramp up growth in other areas of store sales, it reduced its reliance on prescription sales slightly to 48.7 per cent from 49 per cent last year.

Front of store sales were $1.6 billion in the third quarter, up 2.6 per cent, led by strong sales in cosmetics, food and candy and other convenience categories.

The results also reflected the benefits the chain has realized from an efficiency drive to reduce costs and improve productivity.

Those benefits helped to partially offset higher operating expenses associated with its expansion strategy.

The company opened 15 stores in the third quarter and expanded eight others. At the end of the quarter, Shoppers had 1,328 stores.

Pilla, who became the Toronto-based company's chief executive effective Nov. 1, is a McGill University graduate and member of the Quebec Order of Engineers. He was president of McKesson Canada, a major player in Quebec's pharmacy business, just before his appointment.

Shoppers shares were down 36 cents to close at $42.48 Wednesday on the Toronto Stock Exchange.

CICPO speaking out to Protect the Rights of Seniors

Story below as appears in the Grand Falls-Windsor Advertiser by journalist Renell LeGrow.

Group concerned over contracts

The Council of Independent Community Pharmacy Owners is crying foul over contracts being signed between personal care homes and big chain pharmacies for exclusive rights to pharmaceutical needs for residents.

Published on September 8, 2011

Personal care homes signing deals with big chain pharmacies

It's a fight the Council of Independent Community Pharmacy Owners is ready to fight - but where do they take it?

The Advertiser has learned a number of personal care homes in the region have signed contracts with some big chain pharmacies for exclusive rights to pharmaceutical needs for residents.
CICPO Executive Director Sue Kelland-Dyer said they're hearing the stories province-wide.

"Here's what appears to be going on," she said. "Number one, the big chain stores that are involved in this thing are both Shoppers Drug Mart and Lawton's. There is no evidence of others involved, those would be the two, and the predominant player in that would be Lawton's Drugs. What we're hearing essentially is that they go into the homes, and they cut a cheque, so much per bed, and what they receive in return is exclusivity of the people or residents of the home."

When contacted by the Advertiser, the homes in Grand Falls-Windsor declined comment, however Ms. Kelland-Dyer said it is happening.

"Quite often too they come in from outside the community, which is also a problem," she said. "So in Grand Falls-Windsor's case, I think the couple of cases that are there, one is a Lawton's and one is a Shopper's, but neither of them is operating in the community. They're operating their services to the home from outside the community. One from Gander, and the other from Bishop's Falls."
Ms. Kelland-Dyer said the complaints are pouring into CICPO of upset seniors and families, wanting to keep their long-time family pharmacist.

"What they're being told is that if you do not transfer over and go to another pharmacist and another pharmacy, basically we will not give you your medication," she said. "These people have been with their pharmacy for years. We've had reports of seniors crying, really upset, didn't know what to do, and the most difficult part is because they've been waiting to get into a home, or probably just getting in, they're not comfortable with rocking the boat."

Ms. Kelland-Dyer called the situation a real mess.

"To the people who have called our pharmacies, and its not just Grand Falls-Windsor... what do we say for these seniors?" she said. "Somehow this is continuing to fall on deaf ears and at some point it's going to break."

Ms. Kelland-Dyer cited a letter she was forwarded from a resident of Golden Years Estate in Grand Falls-Windsor.

"Dear Resident of the Golden Years Estate, It is the commitment of the Golden Years Estate to provide it's residents with the ultimate care and service, which is why beginning on Monday, Feb 1, we will be switching all pharmaceutical requirements and needs to Lawton's Drugs. The Golden Years Estate and Lawton's Drugs ensure that there will be no disruption in medications or prescription service and delivery, and that residents will enjoy enhanced customer service and satisfaction. We appreciate you're understanding and co-operation regarding this decision, and we look forward to a prosperous new year filled with good health and happiness."

That's a senior's rights issue, according to Ms. Kelland-Dyer.
"You and I can pick whoever our pharmacist is, whoever our doctor is, we can change if we want or stay there if we want, but it's our choice," she said. "This has come down to seniors not having a choice. And I tell you, there's a lot of upset. We've been trying to get to the bottom of this, how do we put this complaint together, who do we lodge the complaint to, but clearly there has to be some action taken because you have people who, I know, are in tears."
Ms. Kelland-Dyer feels the government should step in.

"I know our pharmacies in Grand Falls-Windsor were supplying the homes, but there was no force," she said. "If a resident wanted to go to Roy Green, or one wanted to go to Wayne Morris, or one wanted to go to Ken Dicks, they just did. There was no blocking them."

The biggest concern for CICPO is the relationship between patient and pharmacist. Ms. Kelland-Dyer said with any luck, the pharmacist becomes a life-long health care provider, much like a family physician.

"Particularly as it involves chronic illness like heart conditions, high and low blood pressure, diabetes, asthma and that sort of thing," she said. "There's an ongoing need for medications, compliance with those medications and ongoing discussions back and forth between the doctor and the pharmacist as to what perhaps would be the best approach from a medication perspective."
Ms. Kelland-Dyer said families need to be able to speak on behalf of their loved ones.

"We had one instance where a person was getting ready to leave their home and go into the personal care home," she explained. "Before they went into the home they said they were going to keep their same pharmacist. They were told it wouldn't be a problem. And then, the day they went to check into the home, they told her she had to sign the document or she wasn't going to be admitted. What do you do? We have other instances here in St. John's, where local pharmacists weren't able to treat their own parents or grandparents. It's something that's really weird, it came out of nowhere... it's not a happy picture."

Ms. Kelland-Dyer said CICPO is ready to fight this.
"Something has to give," she said. "You can't treat seniors any different than me or you."
The Advertiser placed calls to Shoppers Drug Mart in Bishop's Falls but they were not returned, prior to deadline.

Why CICPO will Not sit with Drugstore Chains

Please read below: This is in part is why Newfoundland and Labrador Independent Drugstores must not sit with mass retailers.

Why CICPO must not sit at a table with the chains!

Shoppers Drug Mart Corporation

Excerpts from 2010 Annual Report

Shoppers Drug Mart Corporation is the licensor of full-service retail drug stores operating under the name Shoppers Drug Mart® (Pharmaprix®in Québec). 

Leading Through Change   A message from David Williams, Chair of the Board of Directors

There is no doubt that the implementation of drug system reform initiatives in Ontario and in other provinces across the country will continue to have an impact on our industry and our business into 2011 and beyond, resulting in structural changes to both the competitive landscape and the private payer market.

… we are poised to capitalize on the expected consolidation of the marketplace, which we view as another attractive opportunity to gain market share and increase profitability.

Associate-owned Store Network

As at January 1, 2011, there were 1,182 Shoppers Drug Mart/Pharmaprix retail drug stores owned and operated by the Company’s licensees (“Associates”). An Associate is a pharmacist-owner of a corporation that is licensed to operate a retail drug store at a specific location using the Company’s trademarks. The Company’s licensed stores are located in prime locations in each province and two territories, making Shoppers Drug Mart/Pharmaprix stores among the most convenient retail outlets in Canada.

The Company operates in Québec primarily under the Pharmaprix® and Pharmaprix Simplement Santé® trade names. Under Québec law, profits generated from the prescription area or dispensary may only be earned by a pharmacist or a corporation controlled by a pharmacist. As a result of these restrictions, the licence agreement used for Québec Associates differs from the Associate agreement used in other provinces.

Under the licensing arrangements, the Company receives a substantial share of Associate store profits. The Company’s share of Associate store profits is reflective of its investment in, and commitment to, the operations of the Associates’ stores.

The success of the Company and the reputation of its brands are closely tied to the performance of its Associate-owned drug stores. Accordingly, the Company relies on its Associates to successfully operate, manage and execute the retail programs and strategies of the Company at their respective locations. 

The Company supports the operations of its Associates in many ways, including the provision of training and continuing education programs, as well as assistance with various administrative tasks. In addition, each Associate agrees to comply with the policies, marketing plans and operating standards prescribed by the Company, as specified in the Associate agreements with individual Associates. As well, through head lease control, the Company maintains control of all locations in its Associate owned store network.

Under the Canadian Institute of Chartered Accountants’ (“CICA”) Accounting Guideline 15, “Consolidation of Variable Interest Entities”, the Company consolidates the Associate-owned stores. The individual Associate-owned stores that comprise the Company’s store network are variable interest entities (“VIE”) and the Company is the primary beneficiary. 

The Company’s business strategies are designed to drive sales growth, maximize gross margin dollars and operating cash flow, leverage cost reduction opportunities and build customer loyalty. The Company believes that proper execution of its strategies will strengthen its position as the licensor of Canada’s leading drug store group, thereby generating increased revenue and profitability, which, in turn, should enhance long-term shareholder value. 

The dedication of the Company’s Associate-owners, combined with its ability to recruit, develop and retain talented pharmacists and technicians, has been, and continues to be, the primary contributor to the Company establishing itself as a leader in the practice of community pharmacy and health. Going forward, the Company intends to build upon this leadership position by continuing to deliver innovative pharmacy products, services and programs, including the introduction in 2010 of its own private label generic drug products marketed under the trademark SANIS™, that aim to improve patient health outcomes, build loyalty with patients and third-party payers, increase market share and enhance profitability. 

The Company plans to allocate $360 million to capital expenditures in 2011, with approximately 75% of this amount to be invested in the store network, including any related investments to acquire drug stores, prescription files and land. 

Competition

The Company faces competition from many retailers in the front store merchandise and non-prescription drug categories. The Company’s competitors in the retail pharmacy business include independent operators, banner groups, retail chains, mass merchandisers and larger supermarket chains with combination food/drug retail operations. These competitors may reduce prices in front store merchandise or reduce dispensing fees to increase market share, which could have an adverse impact on the Company’s market share and/or earnings.

Third-party Service Providers

The Company is reliant upon third-party service providers in respect of certain of its operations. It is possible that negative events affecting these third-party service providers could, in turn, negatively impact the Company. While the Company has no direct influence over how such third parties are managed, it has entered into contractual arrangements to formalize these relationships. In order to minimize operating risks, the Company actively monitors and manages its relationships with its thirdparty service providers. 

Real Estate

Successful implementation of the Company’s growth strategies is dependent upon the Company’s ability to increase the selling square footage of its Associate-owned store network through new store openings and acquisitions, expansions of existing stores and relocations of other stores to superior sites. The availability of suitable store locations and redevelopment opportunities with respect to existing stores, and the lease terms that the Company is able to negotiate in connection with new leases and store upgrading, may impact the Company’s ability to execute its strategic plan to the extent that desirable locations and/or redevelopment opportunities are not available on reasonable commercial terms.