Rexall blames Ontario cutbacks for prescription deliver fees

EDMONTON – The Rexall drugstore chain will start charging for prescription deliveries in Ontario as the battle over how pharmacies are compensated for filling generic drug prescriptions escalates.

The company will also freeze hiring at its Mississauga corporate headquarters and eliminate pharmacy student and intern programs in Ontario, the company said Tuesday.

"We are disappointed these measures must be taken, particularly given our long-standing commitment to the professional development of pharmacists," said CEO Andy Giancamilli in a media release.

"The imminent health care cutbacks imposed by the McGuinty Liberal government have forced us to take immediate action and review our existing business model for the delivery of health care to ensure the viability of our business in the communities we serve."

The move comes after Shoppers Drug Mart Corp. announced Monday it is cutting store operating hours at locations in London, Ont.

The company – which warned last week that reductions in payments to pharmacies to carry generic drugs would force it to close stores and lay off employees – said it is reviewing its operations in each market across the province.

Rexall said Tuesday it was also assessing operations, professional practice and future investments in Ontario in light of the province’s plans to cut the price of generic drugs for consumers and eliminate rebates paid by manufacturers to encourage pharmacies to sell their drugs.

When announced last Wednesday, the new policies, which Ontario expects to help save the province more than $500 million a year, were criticized by pharmacy associations who said the changes would lead to store closures and higher dispensing fees to make up for the loss of the rebates.