The Ontario government can try to force down the price of generic prescription drugs — even if it hurts pharmacies — after receiving the blessing of the Supreme Court.
In a unanimous decision Friday, the court ruled Ontario can ban pharmacies from selling their own private label generic drugs.
Justice Rosalie Abella wrote that the regulations are meant to ensure "pharmacies make money exclusively from providing professional health care services, instead of sharing in the revenues of drug manufacturers by setting up their own private label subsidiaries."
The justices agreed the goal is to take away a manufacturer’s incentive to keep prices high, though the court doesn’t draw conclusions about the effectiveness of the regulations.
"Whether they will ultimately prove to be successful or represent sound economic policy is not the issue," Abella wrote.
Shoppers Drug Mart has its own prescription drug subsidiary, Sanis, while the owners of Pharma Plus and Rexall planned to set up their own.
Together, they challenged the 2010 regulations. They won before the Ontario Divisional Court, but the Ontario Court of Appeal overturned that ruling.
Friday’s decision was a bitter pill for pharmacies to swallow.
"Rexall is disappointed, but the highest court in the land has rendered its decision and we will respect the ruling," spokesman Derek Tupling said in an e-mail.
Pharmacies have been fighting for years against the Ontario regulations that have squeezed up to $800 million from them annually.
The decision only applies to Ontario, but could provide a guide for other provinces.