Canadian Supreme Court To Hear Private Brand Appeal

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.

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 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.

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.

The ongoing court battles reflect the cash-strapped Ontario government’s efforts to cut health-care costs as it struggles to balance its books. A $16-billion deficit has forced the province to review everything from soaring drug plan costs to public sector wages and financial transfers to restrain spending growth.

The initial court ruling in February 2011 said the province went too far with a regulation that barred the sale of private-label generic drugs.

The rule had prevented pharmacies from selling their own lower-priced versions in place of popular name-brand drugs.

However, the appeal judges ruled last December that the lower court’s analysis was too narrow, adding the government regulations were not too harsh.

“Neither Shoppers nor Katz is precluded from engaging in the purchase or sale of drugs in Ontario as long as they do so in accordance with the legislative and regulatory scheme,” said the ruling.

“This is regulation; it is not a prohibition.”

SOURCE:  The Canadian Press

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Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.