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Top court backs Ontario's ban on pharmacy-brand generic drugs

Staff writer |
The Supreme Court of Canada has upheld Ontario's right to bar pharmacy chains like Shoppers Drug Mart and Rexall/Pharma Plus from selling their own house-brand versions of popular generic drugs.

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The question before the court was whether the province could prevent Shoppers and the Katz Group, which owns the Rexall/Pharma Plus chain, and other drug stores from selling their own generic drugs simply by introducing new regulations to that effect under current laws or if it had to pass new laws.

The court ruled that Ontario didn't overstep its powers by amending the laws governing how prescription drugs are sold in the province to make the changes it wanted and that the changes were consistent with the intended purpose of those laws, namely, reducing drug costs.

"The 2010 private-label regulations contribute to the legislative pursuit of transparent drug pricing," the court said in its ruling.

"They fit into this strategy by ensuring that pharmacies make money exclusively from providing professional health care services, instead of sharing in the revenues of drug manufacturers by setting up their own private label subsidiaries.

"If pharmacies were permitted to create their own affiliated manufacturers whom they controlled, they would be directly involved in setting the [province-covered drug] prices and have strong incentives to keep those prices high."

British Columbia, Alberta and Quebec have also been revisiting their provincial drug pricing plans in the face of prices they say are increasingly out of step with what people in jurisdictions outside Canada are paying for drugs. So far, Ontario is the only province to ban the sale of private-label generic drugs.

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