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Value Drug Mart defends Rx.

EDMONTON, Alberta -- Reduced government allowances for generic drugs are threatening the viability of pharmacies in Alberta, notes Value Drug Mart Associates Ltd. general manager Clay Thompson.

Allowances for existing generic molecules at 56% of the brand's price, and for new molecules at 45% of the brand, "reduce the stores' ability to manage their businesses and earn good profits," he says.

The premise that generic manufacturers' advertising allowances and professional allowances will keep pharmacies in the black "or in some cases just afloat" is flawed and needs to be changed, says Thompson.

"Pharmacists deserve to be paid for the services they provide at a rate commensurate with their training and the quality care they bring to the community," he asserts.

In response to the cuts, Value Drug Mart has backed a grassroots campaign in rural Alberta called "I Care About My Pharmacist." The campaign's web site includes a petition to the provincial legislative assembly to change its policy "to ensure that community pharmacies and pharmacists in Alberta are adequately compensated for the existing services that they provide Albertans and that the access to these services is not reduced as a result of the implementation of the Alberta Pharmaceutical Strategy."

Over 13,000 Albertans have signed the petition.

"We've been quite focused on making sure the public--particularly in rural Alberta--is aware of the kind of impact the government's change is going to have on their health care," Thompson says.

Alberta pharmacists dispense some 37 million prescriptions a year, and intervene on over 640,000, the web site notes.

While this year may be one of adjustment, Value Drug Mart shareholders continue to do well, says Thompson. Script counts and customer traffic are up, he notes. "We're pleased with that trend anyway," he comments.

The chain does a strong front-end business, he adds, despite competition from national chains and big boxes. "We probably have a flyer running in every one of our communities at least once a week this year," he remarks.

The company now comprises 34 Value Drug Mart stores, all owned by shareholders--as well as 11 Apple Drugs and 11 Rxcellence units. The owners of the latter 22 outlets get the company's services, but are not shareholders and have no stake in the retailer's distribution center and operations.

Stores are located up and down the length of Alberta, from La Crete in the north, not far from the Northwest Territories, to Cardston, just above the Montana border. There are also two outlets in British Columbia (in Fernie and Grand Forks), and a store in Lloydminster, Alberta, is on the border of Saskatchewan.



Al Hodgins, CEO


16504-121 A Ave.

Edmonton, Alberta T5V 1J9 Canada

Phone: (780) 453-1701

Fax: (780) 454-7720

Web site:

* INDUSTRY RANK--30 in sales, 25 in stores

* Full-year results

Sales--$179.3 million *

Net earnings--N/A

Comparable-store sales--N/A

* Number of drug stores--56 (34 Value Drug Mart, 11 Apple Drugs, 11 Rxellence)

* Number of provinces operating--2

* Number of stores opened in 2009--N/A

* Number of stores closed in 2009--N/A

* Number of stores planned for 2010--N/A

* Average sales per store--$3.2 million *

* Average store size--5,500 sq. ft. (Value); 3,000 sq. ft. (Apple); 1,000 sq; ft. (Rxcellence)

* Distribution--Warehouse

* CDR estimate in Canadian dollars, N/A = Not available.
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Publication:Chain Drug Review
Geographic Code:1CALB
Date:Apr 26, 2010
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