Pointing to the Ontario government's drug reform plan, which aims to slash pharmacy reimbursement, Katz Group's flagship Rexall drug store chain has enacted a hiring freeze for its corporate head office.


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Rexall freezes hiring in response to reform plan

April 13th, 2010

MISSISSAUGA, Ontario – Pointing to the Ontario government's drug reform plan, which aims to slash pharmacy reimbursement, Katz Group's flagship Rexall drug store chain has enacted a hiring freeze for its corporate head office.

The company said Tuesday that the move, which includes eliminating pharmacy student and intern programs in Ontario, is effective immediately.

Customers also will be charged for prescription deliveries at all Rexall and Rexall Pharma Plus locations in Ontario starting on April 19.

"We are disappointed these measures must be taken, particularly given our long-standing commitment to the professional development of pharmacists," Andy Giancamilli, chief executive officer of Rexall, said in a statement.

"The imminent health care cutbacks imposed by the [Ontario Premier Dalton] 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," said Giancamilli, who also is CEO of Katz Group North America, which has nearly 1,500 drug stores, and chairman of the National Association of Chain Drug Stores. "We are committed to doing all we can to continue to provide the best possible pharmacy care to our patients and customers despite the looming and severe cutbacks to pharmaceutical health care."

Rexall said it will continue to assess its operations, professional practice and future investment plans in Ontario "to determine the company's ability to preserve the high level of pharmacy services and patient care customers have come to trust at Rexall and Rexall Pharma Plus."

The company had voiced its opposition to Ontario's reform plan last week, along with another top Canadian drug chain, Shoppers Drug Mart.

Plans call for the province to reduce prescription generic drug prices for patients under the Ontario Drug Benefit Program from 50% of the equivalent brand-name price for multisource generics to 25% of the cost of the branded equivalent. Prices for generics in the private sector will also be cut to 25% of the branded price by 2012, and Ontario plans to eliminate the current pharmacy reimbursement model of professional allowances paid by generic drug makers to pharmacies, according to Rexall.

"The impact of the proposed changes will not only upset levels of patient care but will result in reduced store hours, store consolidations and closures, employee layoffs, elimination or reductions in free services such as calling physicians for refills and advice to patients on health matters, as well as freezing pharmacist hires," Rexall stated late last week. "These measures are required in order to adjust to the traumatic affects of the Ontario drug reform plans."

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