Pharma In Brief - Supreme Court Upholds Ban On ''Private Label'' Generic Drugs In Ontario

Case: Katz Group Canada Inc. v. Ontario (Minister of Health and Long-Term Care) Nature of case: Appeal from applications for judicial review challenging the validity of Ontario regulations made under the ODBA and DIDFA Successful party: Ontario (Minister of Health and Long-Term Care) Date of decision: November 22, 2013

Summary

This was an appeal from applications for judicial review brought by Shoppers Drug Mart and Katz Group Canada Inc. ("Shoppers and Katz" or collectively the "Pharmacies"), challenging the validity of Ontario regulations made under the Ontario Drug Benefit Act, R.S.O. 1990, c. O.10 ("ODBA") and Drug Interchangeability and Dispensing Fee Act, R.S.O. 1990, c. P.23 ("DIDFA") (collectively the "Regulations"). Shoppers Drug Mart and Katz Group own and operate pharmacies across Ontario and sought to sell their own "private label" generic prescription drugs rather than source them from arms-length manufacturers. While the Divisional Court declared the impugned provisions as ultra vires, the Ontario Court of Appeal reversed this decision.

The Pharmacies were granted leave to appeal to the Supreme Court of Canada in August 2012 and sought a reversal of the Ontario Court of Appeal's decision that the impugned provisions of the Regulations banning "private label" drugs are intra vires the governing statute and of full force and effect.

The Supreme Court of Canada ("SCC") dismissed the Shoppers and Katz' appeal and upheld the Regulations as intra vires.

Background

The ODBA is the governing legislation for Ontario's public drug benefits plan. It provides for the conditions under which the government will reimburse pharmacies for prescription drugs dispensed to eligible patients under the Ontario Drug Benefit Plan (such as seniors and persons receiving social assistance); the drugs that are reimbursed are designated as listed drug products on the Formulary. The DIDFA is the governing legislation for the dispensing and sale of prescription drugs in Ontario. The DIDFA sets out the rules surrounding generic and brand name drug interchangeability, the pricing of interchangeable drugs and the dispensing fees that may be charged by pharmacists. Generally, a generic drug cannot be sold in the "private" market unless it is designated as "interchangeable" with a brand name drug product. In 2010, several amendments were made to the ODBA and DIDFA, including a provision that banned the interchangeability and reimbursement by the provincial drug...