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The Regulator Knows Best: British Columbia Court of Appeal Upholds Bylaws Prohibiting Customer Incentive Programs
Professional Regulatory Alert

In Sobeys West Inc. v. College of Pharmacists of British Columbia, 2016 BCCA 41, the British Columbia Court of Appeal determined that it was reasonable for the College of Pharmacists to prohibit pharmacists from using “customer incentive programs.”

In September 2013, the British Columbia College of Pharmacists introduced bylaws prohibiting “customer incentive programs” that encouraged patients to use particular pharmacies or pharmacists. Prohibited incentives included money, gifts, discounts, rebates, refunds, customer loyalty schemes, coupons, goods or rewards. 

Sobeys West Inc. challenged the College’s bylaws. Initially, on judicial review, the British Columbia Supreme Court held the bylaws to be overbroad with a net effect that was “harmful to the public interest in obtaining pharmacy services and prescriptions at the lowest price.” As a result, the bylaws were held to be unreasonable.

On appeal, the British Columbia Court of Appeal found that the judicial review judge had considered evidence that should not have formed part of the “record” in the judicial review and that the judge had improperly applied the standard of reasonableness.

The Court of Appeal held that the College of Pharmacists could enact bylaws aimed at preventing harm to the public even without empirical evidence that harm had actually occurred. Even though the “evidence supporting the need for the bylaws was thin” and anecdotal, the College of Pharmacists did not need to wait for better empirical evidence and did not need to select the least intrusive method to address its bona fide concerns that inducements from pharmacists were a matter of public interest and professional standards. The Court of Appeal held that the bylaws were valid and enforceable as they represented a reasonable response to questions of policy within the particular expertise of pharmacists.

The case is an important acknowledgement by the Courts of regulators’ powers to regulate the professions in the best interests of the public by anticipating issues and responding using their particular expertise, not just by reacting to problems.

In 2014, the Alberta College of Pharmacists sought to introduce similar prohibitions against “customer incentive programs.” Sobeys West Inc. also challenged these Alberta prohibitions and the case will be making its way through the Alberta Courts. So far Sobeys West Inc. has obtained a Court Order staying the implementation of the prohibitions, arguing that since the prohibitions have not yet come into effect, maintaining the status quo would avoid disruption. Field Law will be monitoring the Alberta proceedings and will report on major developments.