Rather than cutting price, Shoppers builds brand: Not waiving new prescription user fee

While other stores are waiving Ontario’s controversial new $2 prescription user fee for certain groups such as seniors, Shoppers Drug Mart has responded with the Healthwatch Seniors Club, an addition to its Healthwatch umbrella program of services.

The drugstore chain’s Seniors Club program was launched in Ontario to coincide with the new $2-per-prescription user fee instituted by the province July 15 for users of the Ontario Drug Benefit Plan, low-income seniors and welfare recipients.

The odbp allows for pharmacies to charge a $6.11 prescription fee for those on the plan but will now subsidize only $4.11 of that fee.

Rather than absorbing the fee as Wal-Mart Canada, Zellers and Hy & Zell’s has done, Shoppers is taking a different tack: it is offering discounts on non-prescription products – and advertising these savings as much more significant than the savings on prescription purchases being offered by their competitors.

In fact, the company’s newspaper advertising from TBWA Chiat/Day of Toronto, which includes double-page spreads, pits itself against the discount chains with a comparison of savings for the average senior – a measly $54 on the competitors’ side and a claim of over $200 at Shoppers.

The $200 savings tab was an estimate based on the discounts Shoppers is offering, which include a 10% discount everyday on its more than 1,500 Life and Rialto brand front-shop products.

Terry Creighton of Shoppers communications department says, ‘Our research shows (seniors) are the highest purchaser of Life brand products, so when you add up all the potential savings, even with a conservative estimate of what they would normally spend, you’re looking at an over $200 value.

‘If they’re taking their prescriptions to a fee discounter, they’re looking at a possible savings of $54, because the average senior in Ontario has 27 prescriptions a year, a little over two per month on average.’

Although it has yet to finalize other advertising plans specifically for the Seniors Club package, Shoppers has been running a tv campaign focusing on various elements of Healthwatch since March, and several spots in the series deal with issues specific to seniors such as home delivery.

Meanwhile, Wal-Mart Pharmacy Division, which operates 129 pharmacies in the chain’s 134 stores, has been taking the lead in putting the focus on lower prescription fees.

In May, the retailer launched the Partners Plus preferred provider program for employers and insurance companies to show them how to cut the cost of benefit programs with its low dispensing fee.

The Wal-Mart fee varies in each market to a high of $6.26 in Ontario, which is over $4 lower than some of its competitors. Wal-Mart also provides patient consultation and other services similar to other pharmacy chains with its Wal-Mart a.s.k. program.

John Makepeace, director of the Wal-Mart Pharmacy Division, says, ‘I wouldn’t describe it as trying to start a fee war. What we do is try to read the market more accurately than maybe our competition does.

In the u.s., Wal-Mart is the second largest provider of pharmacy services, thanks largely to its lower fees, says Makepeace.

Pharma Plus Drugmart which operates 137 stores in Ontario is also promoting services to seniors rather than fee cuts.

Last fall Pharma Plus launched its Pharma Answers program which includes a 1-800 number that connects customers to a pharmacist 24-hours a day, an extensive in-store signage and information program, fact sheets and patient counseling.

Spokesperson Tim Carter says the program was developed to best suit the needs of customers who value information more than fee cuts.