Shoppers Drug Mart (Symbol-SC) -- why so beaten down lately?

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Bylo Selhi
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by Bylo Selhi »

I found this paragraph from the linked article quite damning:
The government held a competition that effectively asked the generic companies to indicate the lowest price at which they would sell a particular drug to the pharmacies. The one or two companies with the lowest price would win the government business for that drug. One of the drugs was ranitidine, a drug to treat ulcers and heartburn, which was listed on the government’s formulary at 40 cents a pill. Just before the government opened the competition, GlaxoSmithKline Inc., the maker of Zantac, the brand-name version of ranitidine, dropped its price to 18 cents per pill. Stevenson says the generics never bid. According to the retired executive, it would have angered their customers and led to a lowest-price-wins market that would have dug into profits. With no bids from the generics, the government halted the competition and accepted GSK’s price. Then, the government surveyed 150 pharmacists to see whether they were actually offering Zantac. Yet, according to Stevenson, many pharmacies did not stock it. It’s not hard to understand why: it’s far more profitable to sell a generic drug with a rebate than a brand-name drug that doesn’t have one.
I suppose pharmacists, while they are professionals, have no fiduciary duty to their clients so this is hardly surprising.

<OT>Feel free to draw parallels to mutual fund salespeople who have no fiduciary duty to their clients either and are busy lobbying the Ontario government to keep things that way.</OT>
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by Hammerer »

Bylo Selhi wrote:I found this paragraph from the linked article quite damning:
The government held a competition that effectively asked the generic companies to indicate the lowest price at which they would sell a particular drug to the pharmacies. The one or two companies with the lowest price would win the government business for that drug. One of the drugs was ranitidine, a drug to treat ulcers and heartburn, which was listed on the government’s formulary at 40 cents a pill. Just before the government opened the competition, GlaxoSmithKline Inc., the maker of Zantac, the brand-name version of ranitidine, dropped its price to 18 cents per pill. Stevenson says the generics never bid. According to the retired executive, it would have angered their customers and led to a lowest-price-wins market that would have dug into profits. With no bids from the generics, the government halted the competition and accepted GSK’s price. Then, the government surveyed 150 pharmacists to see whether they were actually offering Zantac. Yet, according to Stevenson, many pharmacies did not stock it. It’s not hard to understand why: it’s far more profitable to sell a generic drug with a rebate than a brand-name drug that doesn’t have one.
I suppose pharmacists, while they are professionals, have no fiduciary duty to their clients so this is hardly surprising.
Naw, what really happened is that the pharmacies sold generic ranitidine at a "loss", at the Zantac price of 18 cents/pill. As they're interchangeable and of equal efficacy, there was no reason to stock Zantac in this situation, just continue as usual at a lower price. Also, the key phrase is the vague "many pharmacies", they didn't say "most" , a "majority" or what percentage. The opinion of a pharmacy is not necessarily the opinion of a pharmacist.

I'd think a pharmacy would order in Zantac if requested. Why stock an item that you rarely sell when you have next-day and same-day (at no extra charge!) delivery wholesalers?

The government was free to de-list the generic ranitidine entirely, but for whatever reason, chose not to do so.
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by adrian2 »

Another voice stating opinions similar to mine: It’s time for customer to win in Big Pharma vs. Liberals
Connie Woodcock wrote:Until four years ago, I had always had drug coverage. I never gave a thought to pharmacies’ dispensing fees or whether I was getting a generic drug or the original product. When you’re not paying, you really don’t care. But when my husband retired, those things suddenly mattered.

So it really irks me to hear the chorus of whining and complaining now rising from Ontario’s pharmacies. They don’t want to fix their business plans — they want me to continue making major contributions to their bottom line.

So they’ll have to cut hours, maybe even stop staying open until midnight. How many pharmacies need to be open that late anyway? I remember a time when there was exactly one in all of Toronto.

In my community, although there’s a drugstore, the pharmacist doesn’t work weekends and you can’t even buy an Aspirin until Monday.

Cut services? Be my guest. I don’t need my pharmacist’s constant advice and I don’t need him to give me a vaccination or a blood pressure test. My doctor and the local health unit do those jobs just fine, thanks.

I expect my doctor to keep an eye on the drugs he’s prescribing in case there’s a conflict. All I want my pharmacist to do is dispense my drugs accurately.

Oh, and stop calling me your “patient.” I’m your customer. We have a business, not a health care relationship and stop pretending otherwise.

There are a few other things I don’t need in many pharmacies.

For instance, when did it become necessary for Shoppers Drug Mart or Rexall to sell milk, bread and other groceries? Isn’t that what supermarkets and corner stores are for?

Oh yeah, I forgot. Pharmacies can’t sell cigarettes any more so they’ve had to get creative. And you have to admit charging double what a product is worth and then being paid to stock it is pretty creative.
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by eezee »

A few years ago we went to Portugal for one month. Before leaving I made sure I had all my required meds with me.
When I unpacked in Albufeira I discovered that my diabetes pills (metformin ) got left behind. I went to a pharmacy and explained my dilemma. No problem, I got 120 Name brand (MERCK) in bubble packs and paid 5.40E$ for the works.
I pay that in C$ just for the dispensing fee here.
I am going to live forever .... so far so good.
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by Bylo Selhi »

Connie Woodcock wrote:Until four years ago, I had always had drug coverage. I never gave a thought to pharmacies’ dispensing fees or whether I was getting a generic drug or the original product. When you’re not paying, you really don’t care. But when my husband retired, those things suddenly mattered.
This is key IMO. Few people have to pay for drugs out of pocket so they're insensitive to the price, not to mention the dispensing fees. The only reason pharmacies began carrying generics in the first place was because insurers refused to pay for name brands. The only reason a SDM or Katz pharmacist charges twice as much to dispense the same drugs as a pharmacist at Costco or Wal-Mart is because it's not coming directly out of the patient's pocket.
maybe even stop staying open until midnight. How many pharmacies need to be open that late anyway?
SDM has already started this. Great! I welcome the arrival of ATM-like pharma dispensers (see my link upthread) that will be open 24x7x365. No doubt Schreiber and Katz will be whinging about those as well and threatening to reduce their services even more.
the pharmacist doesn’t work weekends and you can’t even buy an Aspirin until Monday.
So don't go to a drug store. Go to a grocery store, Wal-Mart, Zellers, etc. and get your aspirin or any other NSAID, in a variety of dosages and formats, in your choice of name brand or generic, for a lower price.
I expect my doctor to keep an eye on the drugs he’s prescribing in case there’s a conflict. All I want my pharmacist to do is dispense my drugs accurately.
As I pointed out upthread, that would be a mistake for a variety of reasons.
Oh, and stop calling me your “patient.” I’m your customer. We have a business, not a health care relationship and stop pretending otherwise.
You are their patient. A pharmacist has a legal and ethical obligation to treat you as one. That's the primary reason why they're not allowed to also sell tobacco or potable alcohol.
For instance, when did it become necessary for Shoppers Drug Mart or Rexall to sell milk, bread and other groceries? Isn’t that what supermarkets and corner stores are for?
No, that's what the oil industry wants you to believe gas stations are for ;)
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Post by Taggart »

Bylo Selhi wrote:
Connie Woodcock wrote:
the pharmacist doesn’t work weekends and you can’t even buy an Aspirin until Monday.
So don't go to a drug store. Go to a grocery store, Wal-Mart, Zellers, etc. and get your aspirin or any other NSAID, in a variety of dosages and formats, in your choice of name brand or generic, for a lower price.
As I found out a few weeks ago, make sure you don't go too early in the morning, before the pharmacist gets in. In both Wal-mart and Loblaws stores, you can't get low dose aspirin (ASA 81 mg) early, when the store first opens. It's kept under lock and key. Want the extra-strength ASA at that time? No problem, it's out on the rack. :shock:
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by FinEcon »

Apologies to Bylo for me kind of dropping out of the more policy part of this story, as I am not an ON resident so my focus/concern is that of an potential SC investor, not as an ON taxpayer. Also, I'll skip the ad hominem based on the woman's name....(I'm juvenile, tell me something I don't know)
Connie Woodcock wrote: Until four years ago, I had always had drug coverage. I never gave a thought to pharmacies’ dispensing fees or whether I was getting a generic drug or the original product. When you’re not paying, you really don’t care. But when my husband retired, those things suddenly mattered.

So it really irks me to hear the chorus of whining and complaining now rising from Ontario’s pharmacies. They don’t want to fix their business plans — they want me to continue making major contributions to their bottom line.
So it really irks me to hear the chorus of whining and complaining now rising from Ontario’s drug consuming population. They don’t want to pay market rate for anything, they want corporations (like SC, Rexall, etc) to continue making major donations to their personal consumption basket. Who doesn't want to be subsidized but at least be honest about the desire for government transfers. Call a spade and spade. I am happy with the transfer from society I receive from the public library but it is just that, a transfer through which I line my own pocket.
Connie Woodcock wrote: So they’ll have to cut hours, maybe even stop staying open until midnight. How many pharmacies need to be open that late anyway? I remember a time when there was exactly one in all of Toronto.

In my community, although there’s a drugstore, the pharmacist doesn’t work weekends and you can’t even buy an Aspirin until Monday.

Cut services? Be my guest. I don’t need my pharmacist’s constant advice and I don’t need him to give me a vaccination or a blood pressure test. My doctor and the local health unit do those jobs just fine, thanks.
The world has moved on....apparently without Connie Woodcock (resisting rude reference to that name again). Personally, as a consumer, I am happy when businesses are open 24/7. Hell, I'm happy when businesses open giving me more options as a consumer. And whatever happened to 'if you don't like it, just don't shop there'? If SC, doesn't add value for you as a consumer, don't shop there but as far as getting in the way of me or anyone else and SC transacting? Come on! Also, I can imagine that Ms Woodcock would be very angry upon being discharged from a hospital on Dec 24th and realizing that SC or Rexall are the ONLY places in most jurisdictions that are open 24/7/365. And no the hospital will not always give a discharging patient everything he/she needs.
Connie Woodcock wrote: I expect my doctor to keep an eye on the drugs he’s prescribing in case there’s a conflict. All I want my pharmacist to do is dispense my drugs accurately.

Oh, and stop calling me your “patient.” I’m your customer. We have a business, not a health care relationship and stop pretending otherwise.

There are a few other things I don’t need in many pharmacies.
Maybe there's a legitimate debate there. Are pharmacists necessary? Dunno, outside of my circle of competence so I'll defer to the status quo.
Connie Woodcock wrote: For instance, when did it become necessary for Shoppers Drug Mart or Rexall to sell milk, bread and other groceries? Isn’t that what supermarkets and corner stores are for?

Oh yeah, I forgot. Pharmacies can’t sell cigarettes any more so they’ve had to get creative. And you have to admit charging double what a product is worth and then being paid to stock it is pretty creative.
Good thing Tsar Woodcock has decreed the universe be free of businesses (and by extension, their customers) deciding what should sit on their shelves. Bylo had some valid points with the tobacco products but now we're so far down the slippery slope I've stepped in dogshit. Not sure if this woman is an idiot who believes this nonsense or if she is simply talking her book. How about pharmaceuticals be priced at market rate, w/o any government intervention on pricing whatsoever.

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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by FinEcon »

To break from the chorus of 'Shoppers Drug Mart must die', here's some good news in case anyone is not aware, of the pilot project between SC and Rogers:
http://www.marketnews.ca/LatestNewsHead ... gMart.html
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by adrian2 »

FinEcon wrote:How about pharmaceuticals be priced at market rate, w/o any government intervention on pricing whatsoever.
Like in the rest of the world where are they priced at half the Ontario rate or less, and where they don't have "professional allowances" kickbacks that go, in part, to the pockets of SC shareholders?
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

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Connie Woodcock wrote:Perhaps it’s time for pharmacies to learn a lesson from Canadian Tire, which announced last week it’s getting back to basics. After years of trying to lure shoppers with home decor and kitchenware, it’s going to focus on its core business — automotive parts and services.

Maybe pharmacies should do the same and focus on drugs instead of Wonderbread.
Connie Woodcock thinks that Shoppers should move away from its profit-driving non-pharmacy business and back into its diminishingly-profitable pharmacy business?
Taggart wrote: As I found out a few weeks ago, make sure you don't go too early in the morning, before the pharmacist gets in. In both Wal-mart and Loblaws stores, you can't get low dose aspirin (ASA 81 mg) early, when the store first opens. It's kept under lock and key. Want the extra-strength ASA at that time? No problem, it's out on the rack. :shock:
To explain the confusion:
I believe it has to do with labelling: The regular ASA is for pain/fever, so it will say things like taking for only X number of days, if fever/pain/etc persist, seek medication attention etc. The low-dose aspirin will likely say it's to take daily for cardiac reasons, which has greater/complicated hazards associated with it, and may be unnecessary. Technically, this is to afford the pharmacist an opportunity to talk to the person (or vice versa), recognize them and check for potential issues, or for staff to be trained to watch for people buying a lot of due to potential for abuse.

I feel a great deal of these "Must be locked up when a pharmacist isn't present" items are on their way from RX or "Pharmacist's consultation required first" to "Can be sold anywhere".
Last edited by Hammerer on 27 Apr 2010 00:32, edited 1 time in total.
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Post by AltaRed »

Hammerer wrote:The low-dose aspirin will likely say it's to take daily for cardiac reasons, which has greater hazards associated with it, and may be unnecessary. Technically, this is to afford the pharmacist an opportunity to talk to the person (or vice versa), recognize them and check for potential issues, or for staff to be trained to watch for people buying a lot of due to potential for abuse.
Must be provincially regulated. The low dose ASA is out in the shelves with all the other OTC stuff in Calgary.
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Post by Hammerer »

AltaRed wrote:
Hammerer wrote:The low-dose aspirin will likely say it's to take daily for cardiac reasons, which has greater hazards associated with it, and may be unnecessary. Technically, this is to afford the pharmacist an opportunity to talk to the person (or vice versa), recognize them and check for potential issues, or for staff to be trained to watch for people buying a lot of due to potential for abuse.
Must be provincially regulated. The low dose ASA is out in the shelves with all the other OTC stuff in Calgary.
Correct. There's a national body that makes guidelines, and most provinces/territories blindly follow it most of the time, but not always.
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I happen to know that Wal Mart in Ontario "encourages" people to get a prescription for the low dose aspirin so they can prescribe their advice (and collect their fee). Abuse of the system? It is in my eyes.
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Dennis wrote:I happen to know that Wal Mart in Ontario "encourages" people to get a prescription for the low dose aspirin so they can prescribe their advice (and collect their fee). Abuse of the system? It is in my eyes.
That reminds me, DW had a prescription for iron pills last year. When I took it to the pharmacy counter at WalMart the tech (not the actual Pharmacist) showed me the same iron pills on the shelf with the vitamins for about $3. I think she said the prescription would have been close to $15.
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by Bylo Selhi »

Hammerer wrote:Connie Woodcock thinks that Shoppers should move away from its profit-driving non-pharmacy business and back into its diminishingly-profitable pharmacy business?
I hope all you loyal SDM shareholders aren't pinning your hopes for recovery on Canada Post outlets or other of Schreiber's "profit-driving non-pharmacy" schemes. I stood in line at one this morning for over 15 minutes in a line that was "serviced" by a lone clerk who was busy gossiping with her "customer", completely oblivious to the lengthening queue. When I finally got to the counter and presented my registered mail pickup slip it turned out that I was at the wrong outlet, i.e. not the SDM a 5 minute walk from me but one a 15 minute drive at the other end of town. Now that error wasn't SDM's fault but it did afford me another opportunity to wait patiently at an even longer line at the other SDM postal outlet, again "serviced" by a lone clerk who was equally oblivious to the growing queue. This one's badge indicated she was the postal outlet manager, so presumably they have more than one clerk and presumably she has the authority to get said additional staff to pitch in. Anyway I wasted so much time twiddling my thumbs in SDM's queues that I didn't dare waste any more buying anything from any other of Schreiber's "profit-driving non-pharmacy business."

P.S. To the right wingers on this thread. Note that both SDM postal outlets that delivered such exceptional customer service to me today are private enterprises :roll:
Hammerer wrote:I believe it has to do with labelling: The regular ASA is for pain/fever, so it will say things like taking for only X number of days, if fever/pain/etc persist, seek medication attention etc. The low-dose aspirin will likely say it's to take daily for cardiac reasons, which has greater/complicated hazards associated with it, and may be unnecessary. Technically, this is to afford the pharmacist an opportunity to talk to the person (or vice versa), recognize them and check for potential issues, or for staff to be trained to watch for people buying a lot of due to potential for abuse.
I've been buying low-dose aspirin for myself and for my parents for many years at the pharmacy sections of grocery stores, department stores and drugstores -- wherever they happen to be on sale for the lowest price. I rarely buy less than 2 or 3 bottles since the expiry dates are usually several years into the future. I've never been "recognized" by any pharmacist about this potentially abusive habit of mine. (All the people who use this aspirin do so on advice of their physicians, but that's hardly the point.)
augustabound wrote:That reminds me, DW had a prescription for iron pills last year. When I took it to the pharmacy counter at WalMart the tech (not the actual Pharmacist) showed me the same iron pills on the shelf with the vitamins for about $3. I think she said the prescription would have been close to $15.
OTOH at least in ON, seniors (who all get free prescription drugs), don't pay anything if they get a prescription from their doctor for iron pills (or low-dose aspirin for that matter) instead of buying them off the OTC shelf.
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I also lined up at the postal counter in our local SDM today, I was greeted cordially( I was 1st in line) and the Postal delivery/ p.u. guy took my parcel right off the scale and into his truck for downtown processing. A $10 fee for Toronto delivery. So far so good. I needed some groceries and found a new store addition to SDM with new coolers/freezers etc., so I picked up exactly what was on my list. At the checkout I was asked if I wanted to use up some of my shoppers Optimum points. I did, and the bill went from $40 to $15. I still have 130,000 points left accumalted mostly from RX expenditures, which by the way are refunded by my wifes medical plan.
Bottom line, my wifes colleagues,through their medical insurance plan contributions, are subsidising my groceries.
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Bylo Selhi wrote:I've been buying low-dose aspirin for myself and for my parents for many years at the pharmacy sections of grocery stores, department stores and drugstores -- wherever they happen to be on sale for the lowest price. I rarely buy less than 2 or 3 bottles since the expiry dates are usually several years into the future. I've never been "recognized" by any pharmacist about this potentially abusive habit of mine. (All the people who use this aspirin do so on advice of their physicians, but that's hardly the point.)
augustabound wrote:That reminds me, DW had a prescription for iron pills last year. When I took it to the pharmacy counter at WalMart the tech (not the actual Pharmacist) showed me the same iron pills on the shelf with the vitamins for about $3. I think she said the prescription would have been close to $15.
OTOH at least in ON, seniors (who all get free prescription drugs), don't pay anything if they get a prescription from their doctor for iron pills (or low-dose aspirin for that matter) instead of buying them off the OTC shelf.
Low-dose aspirin is not covered in Ontario, not even when it's 100% clear it needs to be taken. As well, in Ontario, the only place you'll find straight iron is behind the counter (RX not required). At least the places I've worked/been at, the people walking around confused in the OTC aisles will get offered assistance. But like I said, technically that's why, I'll believe you if you suggest it rarely happens in most places.

The abusive habit bit wasn't in regards to low dose ASA, but other problematic products (like Otrivin nasal spray).

Shoppers stock down again. I think it's going to be a long decline for them. They may fare relatively well (being able to accumulate a bigger chunk of the market), but things are not going to be like they were before. They may win some pricing power, but I don't think it will overcome their losses from pricing changes and other drug distribution forms. As this all spreads across Canada, good luck to them, they're simply too big to focus on niche services.
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by Bylo Selhi »

Is Ontario’s drugstore battle putting careers at risk?
Ayad must perform one supervised student work term and one postgraduate internship with a pharmacist before he can practise on his own. But he and many others have been caught in the battle between Ontario’s pharmacies and the government. The drugstore chains Shoppers Drug Mart and Rexall are cancelling hundreds of intern jobs...

Without those supervised internships, there’s no way to qualify for the licence, says Ayad...

The dispute is also affecting undergraduates at the School of Pharmacy at the University of Waterloo, which uses a unique co-operative education model. Jake Thiessen, the school’s director, said in a statement Tuesday that three co-op placements have been lost for the term starting in May and the impact is uncertain for students looking for spots in the fall. “The school is in discussions with multiple partners in order to ensure that our students’ experience is not compromised,” he said.

Thiessen said a co-op program at the pharmacy school — one of only two in Ontario — was strongly supported by the industry before it opened just over two years ago...
And this...
If the situation doesn’t change, Ayad says he will move to another province or to the United States so he can complete his training and start his practice.

But it doesn’t make sense for Ontario to make it more difficult for new pharmacists to practise, at a time when there is already a shortage...
Shortage? Of pharmacists? In Ontario? :shock:

Presumably only when your pharmacyconvenience store business model has one on every corner.
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Post by kcowan »

I wonder how the post office decides what outlet to leave your pickup? The closest location to us is a full service post office 5 blocks away but they always leave it in the SDM location in the (far end of the) mall!
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Post by Bylo Selhi »

<OT>
kcowan wrote:I wonder how the post office decides what outlet to leave your pickup?
Good question. That's another pet peeve, but with CPC not SDM.
The closest location to us is a full service post office 5 blocks away but they always leave it in the SDM location in the (far end of the) mall!
I didn't want to get into that in my SDM rant, however, stuff that's addressed to us gets picked up at a SDM a 5 minute walk away. That's why I went there first. In this case, I was actually picking up something for my mother. She lives about a kilometer away from us in a retirement home where many residents have mobility issues. There are two pharmacy-run postal outlets at malls a few minutes away from her, yet for some reason CPC decided her pickup location should be a 15 minute drive away. This makes no sense, especially when the "service" address is a major retirement home/assisted living center.

BTW this sort of indifference to the needs of seniors isn't unique to CPC, nor to other enterprises, private or public.
</OT>
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Post by pitz »

Growth at Shoppers is gone
Shoppers, Canada's biggest pharmacy chain, said it now expects 2010 growth in prescription sales of 2 percent to 3 percent, down from its earlier forecast of 4 percent to 5 percent.
~$2/share earnings per year, P/E of 18 = $36. Likely fully valued here.
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Post by Locke »

pitz wrote:Growth at Shoppers is gone
Shoppers, Canada's biggest pharmacy chain, said it now expects 2010 growth in prescription sales of 2 percent to 3 percent, down from its earlier forecast of 4 percent to 5 percent.
~$2/share earnings per year, P/E of 18 = $36. Likely fully valued here.
The stock doesn't look pretty, 5.5 year low and still going down and yield is still paltry.
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Bylo Selhi
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by Bylo Selhi »

While SDM bitches Loblaw improving pharmacy services to offset Ontario drug cost crackdown
The country's largest grocery retailer plans to "aggressively" increase market share in its drug store business to help offset a move by the Ontario government to cut the funding pharmacies receive.

Loblaw Companies Ltd. (TSX:L) has nearly 500 pharmacies in its grocery stores across the country, and said that if Ontario eliminates the professional allowances currently paid to drug stores by generic drug manufacturers, the impact on its pharmacy business will be "substantial."

"The (profit and loss) impact on our business is substantial but not material and we intend to mitigate as much as we can by aggressively driving share in our drug store business," president and deputy chairman Allan Leighton said on a conference call Tuesday.

Loblaw is already implementing a variety of plans to increase its market share in the competitive pharmacy business, Leighton said. These plans include extending operating hours and services, introducing state-of-the-art technology, as well as a pilot program to create a smaller pharmacy that could fit in smaller stores.

Loblaw also sees an opportunity to expand the number of medical centres in its stores from 84 now to more than 200 over "the next few years," Leighton said. This would boost the amount of business at its pharmacies, as more customers could see a doctor and get a prescription filled at the same place.

"I've always felt we underperform (in our pharmacy business)," Leighton said.

"We see this as a big opportunity for us to drive our drug store business and frankly we're going to have to do that as part of our mitigation."...
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by Michael D »

Loblaws called their bluff. Competition is good. People should pay the real cost for drugs and dispensing fees. But competition on the fee side is stiff (Walmart, Costco, etc.).
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Re: Shoppers Drug Mart (Symbol-SC) -- why so beaten down lat

Post by FinEcon »

Michael D wrote:Loblaws called their bluff. Competition is good. People should pay the real cost for drugs and dispensing fees. But competition on the fee side is stiff (Walmart, Costco, etc.).
Competition is good, no argument there. However, this is a heavily regulated sector with a perverse set of incentives in which the end user rarely bears a cost which is tightly coupled to her benefit so IMO your point about competition doesn't really apply here. People in the situation Adrian posted above are not the norm. Most people in Canada are on the government tit or a private plan. IMO, a lot of the problems stem from the demand side not the supply side. All other points aside, if the average Canadian had to pay a market price for pharmaceuticals, she would be crying bloody murder. People take some life improving or extending drug largely covered by some form of insurance and they complain about their direct cost, which is typically only a small % of the total and a portion of the dispensing fee. Think about that for a minute or two. Are we Canadians even stingier than the famed Scots or do we simply have an unmatched sense of entitlement?

I offer a brief translation/summary the article Bylo posted: Loblaws intends to eat the pharma margin changes with volume and compensated service increases as well as attempt to make up the revenue on other areas of the floor. Same as SC, same as Rexall. Loblaw simply has relatively less skin in this game so they care less then SC or Rexall but good on them for attempting to capture some goodwill on changes in public opinion.
Show me the incentive and I will show you the outcome

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