Supreme Court of Canada to Hear Appeal of Ontario Generic Drug Rules

Article excerpt

Supreme Court to hear generic drug cases

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OTTAWA - A long-escalating battle between the Ontario government and two of Canada's major drug store chains will now be fought before the country's top court.

The Supreme Court of Canada issued a ruling on Thursday announcing it would hear a pair of appeals from Shoppers Drug Mart and Rexall owner the Katz Group of Companies. They are fighting to regain the right to sell generic versions of name-brand drugs in the province.

In keeping with standard practice, The Supreme Court justices did not offer reasons for agreeing to hear the cases.

The decision marks the latest turn in a long and complex battle over the fate of lower-priced private label versions of generic drugs.

The legal rangling erupted after the province enacted regulations in 2010 that stopped pharmacies from selling their own store-brand versions in place of popular name-brand drugs.

It also outlawed professional allowances that generic drug companies paid to pharmacies in exchange for stocking their products, which pharmacies say cost them $750 million a year.

Shoppers Drug Mart (TSX:SC) and Katz launched legal challenges against the government's decisions and won their first victory in February 2011, when a court ruled the province had no authority to ban pharmacies from selling their private label drugs.

Less than a year later, the Ontario Court of Appeal overturned that decision and ruled in favour of the government.

Shoppers Drug Mart issued a brief statement on Thursday praising the Supreme Court's willingness to hear the appeal.

"The company respects the decision of the Supreme Court of Canada and is pleased with the outcome," it said.

Katz, which owns and operates the Rexall and PharmaPlus chains, did not immediately respond to a request for comment.

Ontario Health minister Deb Matthews said the province would continue to fight for the best interests of the province's patients.

"We continue to believe that private label arrangements do not benefit taxpayers or patients and they are not consistent with our drug reforms," she said in a statement. …

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