Ontario's provincial government is trying to send a conciliatory message to angry pharmacy businesses while saying it will proceed with changes to how those businesses are compensated for dispensing prescription drugs.

On Tuesday, Health Minister Deb Matthews praised the role of pharmacists in providing primary health care.

"If they are taking pressure off our family doctors, if they're taking pressure off emergency departments, we want to compensate them for that," she said.

"Pharmacists are extremely well-trained people. They've got six years of education. I want to put that education to work."

The government wants to outlaw professional allowance fees paid by drug companies to pharmacists to stock their particular products. The fees total $750 million per year.

The government claims the change will lower the cost of generic drugs by 50 per cent. It believes the allowances, which are intended to fund patient services, are being used by pharmacies in other ways.

In a letter to the industry on Monday, Matthews said the government wants to move to a system that "delivers higher fees for dispensing medicines, that directly pays for direct patient services and that commits new and extra funding to help rural pharmacists."

The government has $150 million set aside, including $100 million to compensate pharmacy owners for providing services such as flu shots. However, CTV Toronto's Paul Bliss said Matthews did suggest more could be made available.

Pharmacy backlash

The pharmacies are already fighting back against the policy.

The Rexall drug store chain announced Tuesday it will be instituting a hiring freeze at its head office, eliminate its intern and pharmacy student programs in Ontario and will start charging for home delivery as of April 19.

"We are disappointed these measures must be taken, particularly given our long-standing commitment to the professional development of pharmacists," Andy Giancamilli, Rexall's CEO, said in a news release.

"The imminent health care cutbacks imposed by the McGuinty Liberal Government have forced us to take immediate action and review our existing business model for the delivery of health care to ensure the viability of our business in the communities we serve."

Rexall operates 250 pharmacies in Ontario.

On Monday, Shoppers Drug Mart -- which has 500 locations in the province -- announced hours after Matthews' letter that it would be cutting store hours at seven locations in the London area. Matthews is MPP for London North Centre.

Two of those stores would see the pharmacy closed while the remainder of the store would be open.

Premier Dalton McGuinty called for cooler heads to prevail, even though he vowed to continue with the policy change.

He said it's not right for Ontario to pay more for generic drugs than other jurisdictions even though it's the second-largest drug buyer in the world.

"The fact is we're paying 25 to 75 per cent more than other places around the world," McGuinty told reporters at Queen's Park on Tuesday.

"So we think we should be getting a better bargain for Ontario families. Remember, they're paying for this either through their taxes or as private payers, and we think it's important that we get a fair deal."

Opposition parties

Despite the looming turmoil, the McGuinty government got some support from the NDP.

"They make their decisions and they have to run the risk of turning off their own customers," NDP Leader Andrea Horwath said about the pharmacy companies' responses.

"Having said that, I think it's time that we address this issue and that drug costs are brought down for the people of the province and to help our spiraling costs in the health-care sector," she said.

Progressive Conservative Leader Tim Hudak said McGuinty and Matthews need to sit down and talk with the pharmacy industry.

"I am concerned that the approach that the government has taken will result in a lower level of service for seniors and worried moms or dads," he said.

McGuinty has said negotiations with the pharmacy industry were unsuccessful.

With a report from CTV Toronto's Paul Bliss and files from The Canadian Press

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