Quebec generic drug plan requires offsets: Coutu
Drug chain reports fourfold profit increase
Longeuil, Que.-based pharmacy chain Jean Coutu Group Tuesday called on the Quebec government to help it cope with the province's move to lower generic drug prices.
"The Jean Coutu Group strongly believes that offsetting measures need to be adopted to assist market participants with the transition to lower generic drug prices," CEO François Coutu told analysts and investors in a conference call.
Quebec recently announced it expects to save $164 million a year from lower prices on generic drugs.
Ontario made a similar move in its March 25 budget, which led to opposition from the drug industry there.
Quebec's drug policy requires the province to offer the lowest price in Canada.
Ontario decided last month, after a highly public battle with Shoppers Drug Mart, that generic drug prices will be 25 per cent of the price of patented drugs, down from 50 per cent before the change.
However, Quebec has so far not disclosed possible subsidies for the makers and sellers of generic drugs.
"The implementation of this price reduction has been postponed for a period of four to eight weeks while the minister consults the interested parties on other aspects of their reimbursement policy," Coutu said.
"Concerning provincial drug price reforms, we do not expect a significant impact on the consolidated results of the company from the prescription drug reform announced for Ontario, which was implemented in the beginning of July."
The comments came the same day as Jean Coutu announced a fourfold increase in its first-quarter profit, from the same period in 2009.
The chain made $43.2 million, or 18 cents a share, in net income with $642.9 million in revenue for the three months ending May 29.
The earnings matched analyst estimates compiled by Thomson Reuters but revenue came in short of expectations, which had been for $667.9 million.
With files from The Canadian Press