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Shoppers Drug Mart wins round in private-label generics challenge
August 30th, 2012
TORONTO – The Supreme Court of Canada has cleared the way for Shoppers Drug Mart Corp. to proceed with its challenge of Ontario's ban on private-label generic drugs.
Canada's largest drug chain said Thursday that the court has granted its application for leave to appeal the Dec. 23, 2011, decision of the Court of Appeal of Ontario that restored the prohibition on private-label generics in Ontario.
"The company respects the decision of the Supreme Court of Canada and is pleased with the outcome," Shoppers Drug Mart said in a statement.
A Reuters report on Thursday said the court's action also allows Katz Group Canada, operator of the Rexall chain, to go ahead with an appeal of Ontario's ban on private-brand generics. Katz has been planning to introduce its own generics private label.
Shoppers Drug Mart introduced its generic drug private label, Sanis, last year. The company said that in the provinces where the brand can be deployed, it accounts for 53% of the generics dispensed in the stores. And by year-end, that percentage is expected to reach the low 60s.
Domenic Pilla, president and chief executive officer of Shoppers Drug Mart, has described the impact of the brand as "very beneficial."
In the drug chains' challenge of Ontario's ban on marketing private-label generics, the court of first instance found in favor of the pharmacy retailers, but that judgment ended up being reversed. With Thursday's announcement, the appeal of the ban can move forward.
Private-label generics have been seen as a way for Canadian drug chains to regain some of the profits lost through provincial health reforms, which have slashed pharmacy reimbursement for generics and eliminated professional allowances paid by generic drug makers to pharmacies.