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TORONTO (Reuters) - Shoppers Drug Mart Corp said on Wednesday it is reviewing government reforms to the way prescription drugs are priced in Ontario, Canada's most populous province, and how the changes will affect the company's bottom line.
Shoppers, Canada's biggest pharmacy chain, said it is taking a fresh look at its strategic priorities and initiatives, and is reviewing its forecasts for prescription sales growth in fiscal 2010.
The Ontario government, looking to keep health care costs in check, said on Wednesday it will impose lower generic prescription drug prices under the Ontario Drug Benefit Program.
Shoppers Drug Mart said it is "strongly opposed" to the changes, adding it believes they will have a negative impact on pharmacy services and patient care in the province, "as it is inevitable that pharmacies will have to make reductions to their current service offerings".
The company said the reforms would require all pharmacies, including the more than 600 Shoppers Drug Mart pharmacies in Ontario, to review their operating, investing and professional practice models to ensure long-term sustainability.
Shoppers said it will report its quarterly results on April 28 and it expects to provide more information on its review at that time.
"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," said Jurgen Schreiber, president and chief executive of Shoppers Drug Mart.
"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 today, but remains well positioned for the long term," he said.
Reporting by John McCrank; editing by Peter Galloway