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Second pharmacy chain, Rexall, to cut services in Ontario

A protest sign is installed in front of a Shoppers Drug Mart in the west end of London, Ont., challenging the recent provincial government decision on generic drug pricing.

GEOFF ROBINS/Geoff Robins/The Globe and Mail

Canada's second-largest pharmacy chain is joining the rush to trim services even before the Ontario government's planned changes to generic drug rules are adopted.

Starting next Monday, the Rexall and Pharma Plus stores in Ontario will charge up to $8 to deliver prescriptions to customers' homes, said chief executive office Andy Giancamilli. Rexall is also freezing hiring at head office and dropping programs for summer students and interns.

The retail chain was slated to take on about a dozen interns from among graduating pharmacy students, as well as up to 50 summer students, but has rescinded the offers, Mr. Giancamilli added.

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Rexall announced the new measures on Tuesday just minutes before Ontario Health Minister Deb Matthews suggested that the government would consider increasing the $100-million in payments set aside for pharmacists. There could be concessions, she said, if pharmacists expand their role by providing such services as vaccinations and chronic disease management.

"If they're taking pressure off our family doctors, off emergency departments, we want to compensate them for that," Ms. Matthews told reporters.

The government's plans to ban Ontario pharmacies from collecting $750-million a year in "professional allowances" from generic drug makers has sparked a highly public spat between Ms. Matthews and drugstore chains.

Shoppers Drug Mart targeted her hometown for its first cuts to customer service. Starting on Tuesday, the country's largest drugstore chain cut the operating hours at seven retail outlets in London and implemented "lock-and-leave" measures in two locations where the pharmacy closes while the rest of the store remains open.

The Opposition suggested that small, family-owned pharmacies will feel the brunt of the changes and that many will be forced to close. This would hurt consumers because there are not drugstores on every corner in small towns, said New Democrat Leader Andrea Horwath.

Bradley Pharmacy Ltd. is one such business that is facing an uncertain future, said owner and operator Terry McMahon.

The drugstore has been a fixture in the northeastern Ontario city of Sudbury since Mr. McMahon's mother opened it in 1954 and is the only pharmacy in town serving the francophone community.

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"I'm worried about my patients," Mr. McMahon said in an interview. "I'm worried about looking them in the eye and telling them things are going to change drastically."

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About the Authors

Karen Howlett is a national reporter based in Toronto. She returned to the newsroom in 2013 after covering Ontario politics at The Globe’s Queen’s Park bureau for seven years. Prior to that, she worked in the paper’s Vancouver bureau and in The Report on Business, where she covered a variety of beats, including financial services and securities regulation. More

Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More

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