At first glance, this Shoppers Drug Mart in Burlington, Ont., looks similar to one you might see anywhere in Canada. Located in a neighbourhood plaza next to takeout joints and an indoor golf facility, it stocks all the usual toiletries, cosmetics and snacks. But head to the back of the store, and you will find yourself in a waiting area, with cushy seating, three consultation rooms and a reception desk where a “care co-ordinator” in a sharp blazer stands ready to greet visitors.
“Welcome to Shoppers Health,” a nearby sign says. “Let us help you with your health care needs.”
This clinic offers travel vaccinations, cholesterol screening and consultations with pharmacists – by walk-in or appointment – on a number of conditions, including urinary tract infections, pink eye, skin rashes and acid reflux.
Renovated last year, this location represents what Loblaw Cos. Ltd. is aiming to build in many more stores. Internally at the company, locations like it are referred to as the “future of pharmacy.”
More than a decade after Loblaw bought Shoppers Drug Mart Corp., the company’s ambitions have grown far beyond owning Canada’s largest drugstore chain.
Loblaw’s reach into the health care sphere has expanded significantly since that 2014 deal – investing in businesses including telemedicine, medical record-keeping software and physiotherapy clinics. The grocery giant, along with many other private enterprises, is attempting to seize opportunities to fill a growing gap in the Canadian medical system.
“There’s a lack of access to physicians,” Shoppers president Jeff Leger says. “One in five Canadians don’t have access to a primary care provider. There’s lots of great solutions, but they take time to mature, and get more doctors. So people are turning to pharmacists and other professionals to help fill those gaps.”
But the rise of private players in Canada’s health care system has led to clashes with proponents of the country’s publicly funded model, and critics question whether a corporate behemoth such as Loblaw should be permitted to play a larger role in that system. Its health business has already been a source of controversy.
Hundreds of Loblaw’s own pharmacists have told the country’s largest pharmacy regulator that they have felt pressure to put the bottom line ahead of patient care. The company faced a public outcry earlier this year when it struck a deal with Manulife Financial Corp., Canada’s largest insurer, to exclusively deliver some specialty drugs – after which Manulife walked the deal back.
Loblaw has worked to rebuild trust with Canadians as the country’s largest grocer after more than two years when it drew the ire of many consumers feeling the pain of once-in-a-generation inflation in food prices. Now, Loblaw will also have to prove to patients that it can be trusted as their health care provider.
Galen Weston, executive chairman of Loblaw, shakes hands with Holger Kluge, Shoppers Drug Mart board of directors chair, during a news conference announcing Loblaw's acquisition of Shoppers Drug Mart Corporation for $12.4-billion in July, 2013.Philip Cheung/The Globe and Mail
In the summer of 2013, Galen G. Weston made the $12.4-billion deal that would transform his family’s sprawling retail empire. Shoppers had been on Loblaw’s wish list for years. The deal was the culmination of a long courtship, and catapulted Loblaw to owning a 25-per-cent share of the Canadian pharmacy market, from low single digits previously.
“I have long believed that the next chapter for growth at Loblaw should be based in a vision that combined health, wellness and nutrition,” Mr. Weston told analysts when the deal was announced, on July 15, 2013.
Now, more than a decade after the deal closed in 2014, it is clear that Loblaw was not just expanding its drugstore business. This was the beginning of a major strategic shift. And the company believes Shoppers has more room to grow in Canada: Although 85 per cent of Canadians already live within a 10-minute drive of one of Loblaw’s 1,800 pharmacies, there are still plans to build more.
On a recent call, Loblaw chief executive officer Per Bank had a message for Mr. Leger. “We said, ‘Okay go ahead, build as many clinics as we can cope with,’” Mr. Bank recalled on a recent conference call to discuss Loblaw’s second-quarter earnings. It was one of the only changes he made to Shoppers’ “winning” strategy, he told analysts on the call.
As it builds those locations, Loblaw will use Burlington as a model.
“That is what it would look like in all our new stores,” Mr. Leger says in an interview at Loblaw’s head offices in Brampton, Ont. “We think it’s helping to redefine what a primary care experience is.”
It’s not just the pharmacies that are being transformed. Loblaw’s wider health care business is as well. In 2020, the company invested $75-million for a minority stake in Toronto-based telemedicine provider Maple Corp. In 2022, Loblaw acquired Lifemark Health Group for $845-million, a network of more than 300 clinics that provide services including physiotherapy, occupational therapy, massage therapy and mental-health services. The previous year, Lifemark (in partnership with human-resources firm WCG) had won a $560-million, multiyear contract with the federal government to provide care to veterans.
The Lifemark deal was a major bet on paramedical clinics, and Loblaw is already beginning to explore how it can commingle with Shoppers. In 13 locations, Lifemark clinic directors and staff have been working with the pharmacy teams to identify patients with chronic diseases who might consider treatments with a physiotherapist or kinesiologist. Pharmacists can then refer them to Lifemark, and in some cases, Lifemark providers are using Shoppers’ clinic rooms for treatments.
“It’s a nice way to integrate things,” Mr. Leger says.
Shoppers Drug Mart pharmacist Cristina Gumangan uses the Maple app in September, 2020. That year Shopper Drug Mart invested $75-million for a minority stake in Toronto-based telemedicine provider.DARRYL DYCK/The Globe and Mail
Similar integration is happening elsewhere: In 2016, Loblaw spent roughly $170-million to acquire QHR Corp., an electronic medical record-keeping service for doctors. QHR’s Accuro software is now being used in Lifemark clinics, and in pharmacies in Alberta, where pharmacists are allowed to prescribe drugs for a variety of conditions. By weaving Accuro into the existing pharmacy management system used for processing prescriptions, pharmacy teams have “a more comprehensive picture of what’s going on” with patients, Mr. Leger says.
Telemedicine provider Maple already provides publicly-funded primary care in Nova Scotia, and Mr. Leger says he believes pharmacists could be collaborating more with Maple in provinces where pharmacists have been granted a wider scope of care.
And there are the Theodore & Pringle Optical clinics in 177 of Loblaw’s grocery stores, where customers can have their eyesight tested and buy prescription glasses.
Jeff Leger, left, speaks with Fabio De Rango, associate owner of a Shoppers Drug Mart store in Burlington. Renovated last year, the location represents what Loblaw is aiming to build in many more stores.Nick Iwanyshyn/The Globe and Mail
Effectively, Loblaw is knitting its businesses together to keep people coming back to its locations for more of their daily needs. But this level of integration can be a cause for concern because it can lead to a “closing off” of services, says Quinn Grundy, a professor at the University of Toronto who studies the interaction between private companies and the public health care system.
Dr. Grundy raised the possibility “that particularly the data collection and then the vertical integration, would allow for what I would call steering – or ensuring that patients and customers stay within the ecosystem – whether they’re aware that’s happening or not.”
This happens digitally as well. In 2020, Loblaw launched its PC Health app, which allows customers to manage prescriptions and order refills they can pick up without lengthy waits at a pharmacy counter, including at pickup lockers in some locations. The app offers appointments as well, steering users to book services at Loblaw-owned pharmacies or Lifemark clinics. According to the company, more than one million people have activated accounts on the app.
It also tells Loblaw even more about its customers: PC Health encourages users to sign in via their PC Optimum loyalty accounts, which also track their spending patterns at Loblaw-owned grocery stores. Users can earn more points by completing health-related “journeys,” such as doing stretches or following programs for diabetics to lower their blood sugar.
Michael Serbinis, founder & CEO of League Inc., opens the PC Health app, which his company built.Christopher Katsarov/(Christopher Katsarov/The Globe
The app was built by digital startup League Inc., in which Loblaw’s controlling shareholders, the Weston family, are investors through their private holding company, Wittington Investments Ltd. Given the companies’ relation, this type of collaboration is not uncommon. Wittington regularly introduces technology startups to executives at Loblaw if those startups can offer services that might help the retail business. The startups also benefit from gleaning insights from a major retailer with enormous reach. And many of them are in health care: Wittington’s venture capital unit focuses heavily on investing in the space.
“About half of our portfolio is health-care-related,” Wittington Ventures managing partner Jim Orlando says. For example, the firm has a minority stake in Abridge, which uses artificial intelligence to summarize conversations between doctors and patients, helping to fill out health records to save time for doctors. The software could also be used for conversations with other health professionals, such as pharmacists.
“Where we are aligned is that we want to find the newest and best technologies that solve real problems in an operating environment in a retailer,” Mr. Orlando says.
That relationship led Shoppers to host an event at its offices last year, showcasing four printer-sized devices from startup Truvian Inc. that offer blood testing without having to go into a lab. Mr. Leger put his own blood through the machine.
“I saw them run the results. They didn’t come from anywhere else, like Theranos – I’m joking,” he says, referring to the U.S. company led by Elizabeth Holmes that fraudulently claimed it would revolutionize blood testing.
The Truvian device has not yet been approved by Health Canada, and would need to be part of the provincial funding system for blood tests to be considered for use in stores, Mr. Leger added. But the prospect of having tests on-site in clinics and pharmacies is “really quite interesting.”
Shoppers Drug Mart experimented with two Beauty Clinics, which offered dermatology treatments in store. It sold both locations in 2022.Nathan Denette/The Canadian Press
Truvian recently announced a new commercial partnership with Shoppers. Details of the partnership are still to come.
Not all of Loblaw’s attempts to expand its health services have been worth continuing. Shoppers experimented with two locations called Beauty Clinics that offered dermatology treatments. It sold those in 2022. Other tests, putting SmileDirectClub’s teeth-straightening SmileShops in two locations, did not continue.
“We’ve been much more focused on the pharmacist side of things, as being the anchor,” Mr. Leger says. Part of the reason for that is Loblaw’s hope that the pharmacy business may become closer to a kind of medical clinic than it has ever been.
At the core of Shoppers’ strategy is the increasing scope of services its pharmacists can provide. A decade ago, “we had a very narrow scope,” says Mr. Leger, a licensed pharmacist who graduated from Dalhousie University’s pharmacy school in 1995. Now, the number of services in pharmacies and the public funding for them have been “expanding almost by the month,” he adds.
Traditionally, physicians have prescribed medication and pharmacists have dispensed it. But that balance has started to shift. Alberta was the first province to make significant changes, in 2007, to grant pharmacists the ability to prescribe any Schedule 1 drug. Other powers have followed, including the authority to order lab tests.
Proponents say this broadens access to health care at a time when family doctors have been in short supply. A report released earlier this year by researchers at St. Michael’s Hospital in Toronto estimated that more than six million Canadians did not have access to primary care.
Nese Uksel, vice-dean of University of Alberta’s pharmacy school, says pharmacists are widely accessible and, in rural communities, may be easier to find than family doctors. “People often see their pharmacist more than any other health provider because they’re going back for their prescription refills every three months,” she says.
A sign posted in a Shoppers Drug Mart pharmacy in Etobicoke explains Ontario's 2023 decision to allow pharmacists to provide prescriptions for minor health conditions.Tijana Martin/The Canadian Press
Ontario gave pharmacists the power to prescribe drugs for up to 19 minor ailments, including acne and pink eye, last year. The provincial government recently celebrated one million assessments by pharmacists and said the milestone is evidence that health care access has improved.
Loblaw is an active lobbyist of federal and provincial governments, according to an analysis of registries by the Council of Canadians. For example, the company’s registration in British Columbia notes one topic of its lobbying is “expanding the scope of prescriptions that may be filled directly by pharmacists.”
While nearly every province has given additional powers to pharmacists in recent years, the exact responsibilities and illnesses they can treat vary widely. Alberta tends to be among the most permissive, while Ontario is among the least, and the rest are in between.
But the growing responsibilities have also led to some pushback from other health care providers.
At its July board meeting, the Ontario College of Pharmacists disclosed that it had received complaints from members that some doctors were refusing to look at documentation that pharmacists had sent them about their patients.
And the Ontario Medical Association slammed a July 24 announcement from the province that it was launching consultations to empower pharmacists to treat more ailments, as well as expanding the tests and vaccines they can give. The OMA said the province should invest in family doctors’ offices instead of seeing pharmacists as a “quick fix” to a lack of access for patients.
Alykhan Abdulla, a family doctor in Manotick, Ont., who has served on boards and committees for his profession’s provincial and federal organizations, says he thinks pharmacists lack the training he and other physicians receive on thousands of medical conditions and how to diagnose them.
“They spend a significant amount of time dealing with the chemistry and how drugs interact,” he says. “I love that. That’s fantastic. That’s their expertise.” But that is not, he continued, enough to fill the gap for families lacking primary care.
Mr. Leger begs to differ. He believes pharmacists “can do anywhere from 40 to 60 per cent of what a family physician can do.”
But Dr. Abdulla disputes that, calling it “a made-up number,” he says. “Now you want to replace an emergency department with a pharmacist? That doesn’t make any sense.”
Shoppers has experimented with owning its own family care practices, though that didn’t last long. In 2020, it opened a chain called The Health Clinic by Shoppers that eventually grew to 10 locations in B.C. and Ontario. Loblaw owned the leases and equipment in the clinics, and equipped them with staff, though, because of legal restrictions, patient records had to be owned by the physicians, who worked as contractors.
But in the spring of 2024, Loblaw sold the clinics to Well Health Clinic Network Inc. for an undisclosed sum.
A Real Canadian Superstore in Lethbridge, Alta., shows one example of what the company hopes to achieve instead. In 2022, a former doctor’s office had been sitting empty, so Loblaw staffed it with two pharmacists. “Immediately, they were seeing 40 to 50 patients a day,” Mr. Leger says.
As of May 1, Loblaw has opened 82 “pharmacy care clinics,” he says, most of them in Alberta and Nova Scotia. The company wants to expand that to 250 locations by the end of 2025.
Loblaw hopes it can keep expanding these as more provinces increase the scope of care. As new Shoppers locations open, “everything going forward is going to be the new format,” Mr. Leger says. “We expect it to be everywhere.”
A licensed pharmacist himself, Mr. Leger is spearheading Shoppers’ strategy to increase the scope of services its pharmacists can provide.Nick Iwanyshyn/The Globe and Mail
But the pursuit of profit in health care can be ethically fraught and has opened Shoppers up to regulatory scrutiny in recent months.
The first was the preferred pharmacy network (PPN) agreement the company signed with Manulife that would have seen Shoppers become the exclusive provider of high-cost specialty drugs. The deal, which became public in January, drew public outcry from patient groups, a rebuke from federal Innovation Minister François-Philippe Champagne and criticism from independent pharmacists, who said they were unfairly shut out from providing care to patients with Manulife insurance.
In February, Manulife announced it was backing out of the deal and would open its network to any pharmacy. That took some heat off of the insurer and Shoppers, though it drew the attention of provincial pharmacy regulators, who have continued to look into the industry practice in the months since and renewed calls for provinces to ban closed PPNs, as Quebec does.
Mr. Leger characterizes the Manulife deal as an experiment that didn’t work out. “We stayed out of it for a long time, for very much the fundamental reason that we believe that people should have choice about where they go,” he says. “But at one point, we felt we needed to join, because it was a big category, growing and we weren’t part of it, at least to the level that we thought we should be.”
When asked why the Manulife PPN was originally structured as an exclusive deal, Mr. Leger says the company agreed to invest in infrastructure to take part in it, and that “we’d like to have as many patients as possible.”
Now, he says, Loblaw is “equally happy” for Manulife’s network to be open. While he does not rule out the possibility that Loblaw would consider other PPN deals in the future, he says the company supports those deals being open to other pharmacies.
“People should have access and the choice to go wherever they like, full stop,” he says.
The other major source of criticism has come from some of the company’s own pharmacists. In April, current and former Shoppers pharmacists filed a class-action lawsuit against Loblaw and Shoppers, alleging unethical corporate practices that included pressure on pharmacists to bill public health insurance for unnecessary services. The lawsuit alleges Loblaw insisted on pharmacies using computer systems it owned, which were prone to glitches, and placed targets for pharmacists to perform a certain number of medication reviews, known as MedsCheck.
Loblaw has said the allegations are baseless, and the lawsuit has not yet been tested in court.
Pharmacies can bill for up to $75 per MedsCheck call. The Ontario Ministry of Health paid out a total of $60-million to pharmacies for MedsCheck billing in the province’s 2022-23 fiscal year, according to a CBC report.
Meanwhile, the Ontario College of Pharmacists has been conducting its own probe of corporate pressure on pharmacists, including MedsCheck quotas. In a survey of more than 4,000 pharmacy professionals, Rexall, Walmart and Shoppers were singled out for having more than 80 per cent of respondents who worked at their locations reporting workplace pressures. (By comparison, only 18 per cent of those who worked at independent pharmacies reported those concerns.)
When he sees pharmacy students for on-the-job training, Toronto independent pharmacy owner Kyro Maseh says he notices the practices they’ve learned at corporate-owned chains, particularly Shoppers.
“They come to me and they do a medication review, I have them redo it,” says Mr. Maseh. “Because it’s too rushed. That’s not how you do a MedsCheck.”
When Mr. Maseh does these himself, they take 45 minutes to an hour. “It’s like I have to wash the Shoppers off of them, for lack of better terms.”
Mr. Leger says that medication reviews are “a very impactful service” that resulted in positive changes for many patients. After recent meetings with pharmacy associates and the college, he says, the company made “some significant adjustments” to the program, including around labour expectations. Pharmacy franchise owners have “been pretty happy with the changes,” he says. “And they’re super excited about doing more.”
Recently, Canadian consumers’ trust in the grocery sector has been shaken after Loblaw and its parent company George Weston Ltd. admitted to participating in bread price-fixing scheme nearly a decade ago.Sammy Kogan/The Globe and Mail
All of this is happening as the grocery side of the business is under public pressure. Recently, Loblaw and its parent company, George Weston Ltd., agreed to a $500-million class-action settlement related to a bread price-fixing scheme, which the companies admitted they participated in nearly a decade ago. Executives at Loblaw have expressed hope that the settlement will put the case behind them, but it has also served as a reminder to many Canadians of the scandal.
And while grocery executives have pressed the point that retailers did not cause rampant food inflation in recent years, many consumers’ trust in the sector has been shaken. This has implications for the industry’s largest player as well – at a time when it is attempting to expand its role in a highly sensitive part of people’s lives, namely health care.
Where Loblaw sees itself supporting the publicly funded health care system, critics see the company as undermining it.
Jason MacLean, chair of the Canadian Health Coalition and secretary-treasurer of the National Union of Public and General Employees, says provincial governments are essentially outsourcing health care to private businesses, instead of supporting the burnt-out doctors and nurses working for hospitals or in independent practices.
“My concern is, we’re going to have a company that was involved in a bread scandal – and not only that, is under some boycotts throughout the country because of the price gouging accusations that have come forward, and has been studied on Parliament Hill,” Mr. MacLean says. “They’re the same ones that we’re going to and trust to have our health care in their best interest? Their only interest is profit.”
Mr. Leger says he sees his pharmacies as operating no differently than doctors’ offices, which are often private businesses that bill public insurers.
“They’ve relied on hospitals and physicians to do the vast majority of that particular work; that’s changing over time, and they’re expanding around other providers,” he says. “We see ourselves as one of those providers that are ready.”