Supreme Court sides with Ontario on generic drugs

TORONTO — Ontario declared victory Friday in a key battle to clamp down on health-care costs, as Canada’s top court upheld a ban on big pharmacies selling their own prescription private-label generic drugs.

In a 7-0 decision, justices of the Supreme Court of Canada said the province’s 2010 decision to outlaw the practice was consistent with its efforts to ensure transparent drug pricing — a decision that could influence other provinces.

“We’re very pleased that our program and our initiative has been supported, because there’s no reason that people in Ontario should pay more for the same drugs than people in other parts of the country,” Premier Kathleen Wynne said during a visit to Leamington, Ont.

Shoppers Drug Mart issued a short statement, saying while it respects the decision, “it is disappointed with the outcome.” Ontario’s law also eliminated so-called “professional allowances” that genericdrug companies paid to pharmacies for stocking their products.

The cash-strapped Liberal government wanted to reduce generic drug prices to 25 per cent of the price of patented drugs — down from a previous 50 per cent — and said cutting those professional allowances was the way to do it. Shoppers and Rexall, two of the country’s largest pharmaceutical chains, challenged the province because they wanted to be able to sell their own generic versions of big-name drugs.

Private-label, or store-brand generic drugs, are identical in formula to other generic and name-brand drugs that are made and sold by big pharmaceutical companies.

Essentially, the pharmacy chains wanted to get into the drug-manufacturing market. They argued that private labelling allowed them to cut costs by using their own version of the drugs rather than those bought from a manufacturer.