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Canada top court upholds ban on privately labeled drugs

The Supreme Court of Canada [official website] on Friday upheld [text] a ban on pharmacies selling their own generic drug brands. The ruling addresses the Drug Interchangeability and Dispensing Fee Act and the Ontario Drug Benefit Act [texts] which were meant to control the rising price of pharmaceuticals. Under this scheme, private pharmacies may not control generic drug manufactures and sell the drugs under their own name without actually manufacturing. This creates an "arms length" operation requirement between the pharmacies and the drug manufacturers. Judge Abella reasoned:

The private label Regulations fit into this strategy by ensuring that 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. In this way too, the Regulations correspond to the statutory purpose of reducing drug costs since disentangling the cost of pharmacy services from the cost of drugs puts Ontario in a better position to regulate both.
Pharmaceutical companies have been opposing the statutory scheme claiming it has cost them between $600 and $800 million per year. The current ruling only applies to Ontario.

Pharmaceuticals continue to create various controversies. In June the US Supreme Court [official website] ruled [JURIST report] generic drug design defect claims are preempted by federal law. Last November, the Supreme Court of Canada ruled against Pfizer [JURIST report] on in a Viagra patent claim. That July the US Department of Justice (DOJ) [official website] settled a case [JURIST report] with a British pharmaceutical company who pled guilty to several counts of fraud. In June the Wisconsin Supreme Court [official website] ruled against pharmaceutical companies for inflating prices. In April the US Supreme Court held [JURIST report] that generic drug manufacturer may employ the counterclaim provision of the Hatch-Waxman Act [text, PDF].

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