Shoppers Drug Mart to Sell Store Brand Generic Drugs

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February 16, 2010

Toronto-based Shoppers Drug Mart Corp. is hoping to get the same profit lift from store brand pharmaceuticals as it has been getting for years from other store brand categories.

The chain of 1,132 stores across Canada will soon begin selling store brand generic drugs in an attempt to offset slimmer margins it is expecting due to government pharmaceutical reforms, according to the Toronto Globe and Mail.

Canadian drug stores reportedly are scurrying in anticipation of the governments health care reforms that are expected to include altering how much pharmacies can collect from generic drug producers.

"We had a look at this for quite some time," chief executive officer Jurgen Schreiber told analysts. "Our idea is to have a really top quality product ... with a very significant, different design [of the] packaging, which leads to patient safety." The first store brand generic drugs will be stocked behind the pharmacy counter “by early this year,” Schreiber added.

The program goal is also is to introduce better packaging that “makes it easier for pharmacy technicians to count and bundle pills –- and generate labor savings,” the report said.

Generic drug sales will continue to grow as numerous branded drugs, such as Lipitor, come off their patents and are converted to lower cost generics.

In 2009, Shoppers Drug Marts’ generic prescriptions account for 53 percent of total prescriptions filled, up from 51.2 percent in 2008. In 2010, the company expects generic prescriptions to increase even further to upwards of 56 percent.

Meanwhile, Rival Jean Coutu Group is tapping savings through its acquisition of Pro Doc, a generic drug company.

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