Pharmacists at Shoppers file proposed lawsuit against Loblaw, alleging unethical corporate practices

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Shoppers Drug Mart pharmacists have filed a proposed class-action lawsuit against the company and parent Loblaw Cos. Ltd., alleging the drugstore chain breached their franchise agreements with unethical corporate practices, including putting pressure on franchise holders to bill the health care system for unnecessary services.

Law firm Ricketts Harris LLP filed a proposed class action against Shoppers Drug Mart Inc. on behalf of a group of Ontario pharmacists. The pharmacists, known as associate-owners, claim Shoppers Drug Mart breached their franchise agreements, as well as their duty of fair dealing and good faith.

The class action alleges the corporate practices imposed by Shoppers Drug Mart are “unsafe” and “unethical” and compromise a pharmacist’s ability to “deliver safe and effective patient care.”

Loblaw L-T spokesperson Dave Bauer said in an e-mail to The Globe and Mail that the class action “has no merit whatsoever” and the company “intends to vigorously defend it.”

The allegations have not been tested in court.

The lead plaintiff for the class action, which has not yet been certified, is Ontario-licensed pharmacist Sivajanan Sivapalan, who worked under a franchise agreement for Shoppers Drug Mart in Beamsville, Ont., for more than a decade before the company terminated his contract.

According to a court document, franchise agreements are typically reviewed by Shoppers Drug Mart every two to three years. Mr. Sivapalan first entered into a franchise agreement with Shoppers Drug Mart in 2011, and renewed his contracts in 2014, 2017 and 2020.

Mr. Sivapalan says that after he expressed concerns about the corporate practices, Shoppers Drug Mart terminated his franchise agreement in January, 2023, with no reason provided.

The claim states that certain corporate practices were introduced around the time Loblaw purchased Shoppers Drug Mart in 2014, and include: minimizing support staff hours, imposing targets on the volume of medication reviews – known as MedsCheck, public naming and shaming of pharmacists who fail to meet performance targets or quotas, mandating the use of a proprietary computer system for pharmacy services that is prone to glitches, and requiring off-site and centralized preparation of medications, which the suit claims is “prone to medication dispensing errors.”

“The corporate practices obstruct associate owners’ professional judgment as pharmacists, and their ability to care for patients in accordance with the standards of practice for pharmacists and the code of ethics,” plaintiff lawyers Andrea Sanche and Aly Haji said in a court filing.

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The group of pharmacists say that despite raising their concerns about corporate practices, Shoppers Drug Mart and Loblaw “have taken little to no action” to address those concerns, including MedsCheck calls. The service is billed to Ontario’s public health insurance plan – and can cost up to $75 a review.

During a board meeting last month, the directors of the Ontario College of Pharmacists, a self-regulatory body for the profession, responded to pharmacists who raised concerns about being pressed by corporate pharmacy owners to bill for unnecessary services. In March, college staff surveyed 4,309 pharmacy professionals, representing 20 per cent of Ontario’s work force and a third of all those in the province employed by corporate pharmacies. About 70 per cent of respondents reported feeling workplace pressure to bill for unnecessary services, with MedsCheck as the most commonly cited instance.

The survey included more than 2,000 professionals who worked at Loblaw-owned pharmacies.

After the meeting, the board introduced a zero-tolerance policy for business practices that compromise the ability of pharmacists to deliver safe and effective care to their patients.

“The feedback from registrants indicated that pressure to meet MedsCheck quotas is a symptom of a broader problem of corporate influence diminishing pharmacists’ decision-making autonomy as health care professionals,” Shenda Tanchak, chief executive of the Ontario College of Pharmacists, said in an e-mail to The Globe. “Corporate pressures can lead to sub-optimal care and the potential for errors.”

Since then, Ms. Tanchak says, the college has seen an increase in complaints and reports about MedsCheck and other professional services that may be related to the pressure to meet corporate targets. The college is analyzing its threshold for initiating investigations and the criteria it applies when accrediting pharmacies to ensure all “necessary steps are taken to protect patients from risk.”

“This adds up to increased regulatory scrutiny,” Ms. Tanchak added.

The group of pharmacists involved in the class action claim Shoppers Drug Mart did not provide any guidance regarding the new zero-tolerance policy, which they say could put them at an “increased risk” of regulatory scrutiny for professional misconduct with respect to the corporate practices.

Instead, they allege Shoppers Drug Mart has attempted to “reframe” corporate practices such that pharmacists – not the company – would be held responsible under the zero-tolerance policy, which could lead to the suspension or revocation of pharmacy licences.

The class action also claims that Shoppers Drug Mart terminated agreements with pharmacists for criticizing the company’s corporate practices.

The class action includes all pharmacists who are currently Shoppers Drug Mart franchisees, as well as any pharmacists who had Shoppers Drug Mart or Shoppers Drug Mart London franchise businesses in Ontario and were terminated by Shoppers after 2014.

With a report from Susan Krashinsky Robertson