Domenic Pilla, the head of a major health services company, has been handed the top job at Shoppers’ Drug Mart just as Canada’s largest pharmacy chain grapples with the impact of drug reforms in several provinces.
“I am delighted to join Shoppers Drug Mart at this time of challenge and reform in health care and community pharmacy,” said Pilla, who becomes president and chief executive of Shoppers on Nov. 1.
“A time of change is also a window of opportunity for the company to continue to lead the industry in providing innovative patient services while driving organizational efficiencies and continued growth in the retail sector,” Pilla said in a statement.
Shoppers, along with Canadian pharmacies big and small, is feeling pressure on its bottom line due to declining prescription revenue as a result of generic drug reform in Ontario, British Columbia, Alberta and Quebec.
Prescription sales represent about half of all of Shoppers’ revenues.
Ontario and other provinces have outlawed professional allowances that generic drug companies paid to pharmacies in exchange for stocking their products, which pharmacies say cost them hundreds of millions of dollars a year.
Shoppers is also involved in a legal fight with the Ontario government over the province’s regulations last year that stopped pharmacies from selling their own lower-priced versions in place of popular name-brand drugs.
Shoppers owns Sanis Health Inc., which is deemed a generic drug manufacturer even though it doesn’t make the drugs, but is supplied by a contractor.
The drugs it supplies to Shoppers pharmacies are considered private label.
Pilla, who will also join the retailer’s board of director, will be responsible for navigating the company through such challenges.
He was most recently president of McKesson Canada, a drug supply, health care services and technology company. He has held the position since 2006.
Pilla replaces former Shoppers president and CEO Jurgen Schreiber, who unexpectedly left in February to work in the private equity business outside North America. He joined Shoppers in 2006.
Kathleen Wong, an analyst at Veritas Investment Research, believes Pilla was likely selected due to his familiarity with the pharmaceutical and health care industries at a time when regulatory reform is Shoppers’ biggest issue.
“He spent 30 years in the industry,” she said.
“I’m sure that he has been watching the drug reform that has been going on in the last year or so. I think there’s definitely an advantage there.”
Pilla has also been an executive at RNG Group and at Petro-Canada.
He graduated from McGill University with a bachelor’s degree in chemical engineering.
At McKesson Canada, Pilla oversaw the subsidiary of the world’s largest health care services company, which delivers medicine, supplies and information technology to industry players.
Shoppers chairman Holger Kluge said Canada’s largest pharmacy chain was interested in Pilla because of his experience in managing the delivery of health care services to a range of providers including pharmacies, hospitals, governments and patients.
“He brings a strong vision, experienced leadership, passion and energy to work with our associate owners and employees in delivering continued best-in-class experiences for all our customers,” Kluge said in a statement.
Pilla will take over from interim president and CEO Dave Williams, who will help with the leadership transition.
Shoppers Drug operates 1,185 Shoppers Drug Mart and Pharmaprix stores across Canada and licenses or owns 60 medical clinic pharmacies.
The retailer also owns and operates 63 Shoppers Home Health Care stores and other health care and drug sector businesses.