Business observers expressed nervousness Thursday about the news that U.S. health-care giant McKesson Corp. has offered $3 billion to buy the Rexall pharmacy chain with related companies.
McKesson already owns some smaller drug stores and is the one of two big suppliers to Canadian market, including Rexall, and is now “now adding to its size and buying power by acquiring 470 Rexall stores,” The Globe and Mail reported.
“This will bring reduction in competition and reduction in service. It will also minimize choice for Canadian consumers,” Bruce Cran, the President of Canadian Consumers’ Association, told Humber News.
“A drug supplier buying a drug store chains never happened before,” Ben Shenouda, a media spokesperson for Independent Pharmacists of Ontario, told Humber News.
“There’s just two suppliers on the Canadian market: McKesson and Kohl and Frisch, so if one of them owns drug stores, there’s not too many options for even smaller chains, never mind independent pharmacies,” Shenouda said.
Competition won’t be fair and the rules of the game will change now, with McKesson owning a pharmacy chain, he said.
“This will bring reduction in competition and reduction in service. It will also minimize choice for Canadian consumers,” – Bruce Cran, President of the Canadian Consumers’ Association
“The acquisition of Rexall Health supports McKesson’s commitment to drive value in the industry by improving healthcare solutions delivered in the pharmacy; it enhances our ability to provide best-in-class pharmacy care through an expanded retail footprint for patients across Canada,” said John H. Hammergren, chairman and chief executive officer of McKesson Corporation in the press release.
McKesson Canada promised in the press release diverse customer base, including independent pharmacists, will benefit from competitive pharmacy solutions and industry leading service levels.
The transaction is still to be reviewed by the Competition Bureau of Canada.