Pharmacists are not allowed to use customer incentive programs

A bylaw prohibiting pharmacists from using customer incentive programs was struck down on judicial review on the basis of unreasonableness. The College of Pharmacists appealed. The appeal was allowed as the court found that the bylaws conformed to the rationale of the statutory regime.

Administrative law – Bylaws – College of Pharmacists – Compliance with legislation – Decisions of administrative tribunals – Evidence – Judicial Review – Pharmacists – Professional governance and discipline – Public Interest – Reasonableness simpliciter – Rules – Standard of Review

Sobeys West Inc. v. College of Pharmacists of British Columbia, [2016] B.C.J. No. 116, 2016 BCCA 41, British Columbia Court of Appeal, January 27, 2016, I.T. Donald, M.V. Newbury and R.B.T. Goepel JJ.A.

Sobeys West Inc., the owners of Safeway, and Jace Holdings Ltd., the owner of Thrifty Foods (the “Petitioners”) and the intervenor, Shoppers Drug Mart Inc., all offer customer benefits and loyalty programs to their customers, including patients of their pharmacies. The Petitioners challenged a College of Pharmacists bylaw prohibiting pharmacists from participating in customer incentive programs, arguing on judicial review that the bylaw was unreasonable and went beyond what was required to address the theoretical harms raised by the College. The chambers judge agreed and struck down the bylaw on the basis of unreasonableness.

In considering the reasonableness of the bylaws, the chambers judge found that competing public interests were at stake – on one hand, the public’s interest in obtaining prescriptions and pharmacy services at the lowest price, and on the other hand, the avoidance of a number of harms or potential harms associated by the College with incentive programs offered by pharmacies. Following an analysis of some of the affidavit evidence relating to concerns cited by the College, the chambers judge concluded that the impugned bylaws were overbroad and their net effect was harmful to the public interest in obtaining pharmacy services and prescriptions at the lowest price. He therefore ruled that the bylaws were unreasonable.

The College of Pharmacists appealed. The appeal was allowed and the Court of Appeal overturned the decision of the chambers judge, finding that he erred in his interpretation and application of the reasonableness standard.

The College’s broad duty under the Health Professions Act was to exercise its powers in the public interest. Public interest extends to the maintenance of high professional standards and professionalism on the part of the profession. The College had bona fide concerns that customer incentives offered by pharmacies were a matter of concern to the public interest. There was some anecdotal evidence to support those concerns. Other jurisdictions had reviewed the matter and at least one had adopted a similar prohibition. Absent a Charter challenge, the College of Pharmacists was not required to select the least intrusive path nor to wait until there was empirical evidence demonstrating harm of customer incentive programs. No authority was cited for the proposition that because the bylaws affected a “right” of the public or engaged a competing public interest, the onus shifted to the College to show that the bylaws met the reasonableness standard. The substance of the bylaws conformed to the rationale of the College’s statutory regime. The question of whether the bylaws were a reasonable response to the College’s concerns about customer incentives was a matter of policy that would benefit from the particular expertise of pharmacists as opposed to a court of law. A bylaw is not unreasonable merely because a Court might think it goes further than is prudent or necessary or convenient. The bylaw fell within the range of “possible acceptable outcomes” that are “defensible in respect of the facts in law”.

Although not raised as a ground of appeal, the Court found that the chambers judge erred to the extent that he relied on evidence that was not directly or indirectly before the Council of the College regarding the merit of the bylaws. On judicial review, the Court must show deference for the decision already made rather than decide the matter anew on different evidence. To the extent that the chambers judge may have admitted “fresh evidence” he was in error by conflating common law principles and evidentiary requirements applicable to interim injunction applications with administrative law principles governing judicial review of the bylaw making functions of the College council under the Health Professions Act.

This case was digested by Lara C. Zee of Harper Grey LLP. If you would like to discuss this case further, please feel free to contact her directly at lzee@harpergrey.com or review her biography at http://www.harpergrey.com.

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