Jean Coutu eagerly awaits deal expanding role of Quebec pharmacists
LONGUEUIL, Que. - Drug store chain Jean Coutu is eager for the long-delayed implementation of a Quebec law that would expand the role of pharmacists in the health-care system and drive more traffic to its stores.
"We are ready," CEO Francois Coutu said Tuesday following the company's annual meeting. "The government has a unique partner in the distribution of pharmaceuticals that is more efficient, that we can provide seven days a week."
The Quebec law passed in 2011 is designed to free up the time doctors spend on routine visits by allowing pharmacists to renew some prescriptions, administer some medicines that don't require a diagnosis and to order lab tests.
Similar tasks are already performed by pharmacists in some other provinces, including Alberta, British Columbia and New Brunswick, where governments are looking to save money by reducing visits to hospitals and doctors.
However implementation in Quebec has been delayed as compensation for pharmacists appears to have been the main stumbling block in reaching a deal between the Association of Quebec Pharmacy Owners and the former Parti Quebecois government. Coutu hopes the new Liberal government will finally reach agreement on a fee to offset the additional costs to pharmacists.
"The public especially needs us in the moments when it's difficult to get medical and nursing services, that is the nights and weekends," added founder Jean Coutu. "But there has to be compensation. We're not health missionaries."
The company said each store would have to hire more pharmacists in order to answer customer questions and fulfil their other new responsibilities. The company has devoted thousands of hours to training pharmacists, adapting technology for patient records and building consultation rooms in some stores.
The change won't result a large increase in revenue for Jean Coutu, but should increase traffic as patients visit the stores more frequently and could lure customers from other chains.
"If we are better prepared than our competitors and we are able to provide that service better than our competitors we'll have an additional hedge on our competition," added chief financial officer Andre Belzile.
The change will reduce the pressure on the medical system, especially in small communities where there are few doctors and often no nearby hospital. Jean Coutu has focused on expanding its presence outside urban centres.
Earlier Tuesday, Jean Coutu (TSX:PJC.A) said it earned $54.1 million, or 29 cents per share in the first quarter, compared with $108.6 million, or 51 cents per share a year earlier. The decrease was attributable to a gain of $54.4 million last year related to its investment in U.S. pharmacy chain Rite Aid.
Excluding this gain, Jean Coutu earned $54.1 million, or 29 cents per share for the first quarter of its 2015 financial year, compared with $54.2 million, or 26 cents per share a year ago. Analysts had estimated adjusted earnings per share of 30 cents, according to data compiled by Thomson Reuters.
Revenues increased to $688.6 million from $681.6 million a year earlier.
Analyst Irene Nattel of RBC Capital Markets said the results were stable, with earnings per share increasing 13 per cent due to a 12 per cent reduction in the number of outstanding shares.
Generic drugs accounted for 67.8 per cent of prescriptions in the quarter, compared with 66 per cent of prescriptions in the prior-year quarter.
The introduction of new generic drugs cut pharmacy's retail sales growth by 1.1 per cent and price reductions of generic drugs reduced the growth of those sales by 1.2 per cent.
Earnings by the company's generic drug manufacturer, Pro Doc, increased 30.5 per cent to $22.7 million as revenues grew 20 per cent to $39.7 million.
The total number of prescriptions filled increased by 4.2 per cent, reinforcing the company's focus on growing its business organically by adding 10 to 15 new stores annually.
Sales of non-prescription drugs, which represented 8.7 per cent of total retail sales, decreased by 0.1 per cent after increasing by 3.6 per cent in the same period of fiscal year 2014.
Same-store sales, referring to stores open for at least a year, increased 0.1 per cent in the quarter with pharmacy sales increasing by 0.3 per cent and front-end (non drug) sales decreasing 0.5 per cent due to a cold early summer and weak allergy season.
On the Toronto Stock Exchange, Jean Coutu's shares closed down 10 cents to $22.10 in Tuesday trading.
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Note to readers: This is a corrected story. An earlier version incorrectly identified the group negotiating on behalf of Quebec pharmacies.
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