A newly imposed ban on issuing loyalty reward points on prescription drug purchases has survived the first stage of a court challenge launched by major pharmacy chains.
Sobeys West Inc. and Jace Holdings Ltd. – parent firms of Canada Safeway and Thrifty Foods – had sought an interim court injunction suspending the ban but that was rejected last week by B.C. Supreme Court.
A full hearing of the College of Pharmacists of B.C. bylaw prohibiting loyalty programs on pharmaceuticals begins Jan. 31.
The two firms argued in part that the bylaw banning points issuance effective Dec. 2 was pushed through by smaller pharmacies that struggle to compete against the loyalty offers of big chains.
The college has said loyalty incentives are inappropriate “kickbacks” that could unduly influence customer purchasing behaviour.
The companies argued there was no evidence and only speculation that reward points might be a threat to the health of vulnerable patients.
Chief Justice Christopher Hinkson rejected Canada Safeway’s claim it would suffer “irreparable harm” due to loss of revenue and customers to competitors if the loyalty points ban was allowed to remain in place pending the hearing.
The court did not accept the big pharmacies’ claim that loyalty programs pose no threat.
“The fact that there has been no documented harm to the public from customer loyalty programs to date does not mean that the risk of harm is non-existent,” Hinkson ruled.
The college has suggested some patients might go without medicine in order to wait and refill a prescription on a day when a special points bonus is offered.
Hinkson said the pharmacy chains appear to have answered that concern by pledging not to offer unusual loyalty point bonuses on particular days.
Canada Safeway has also lodged a complaint about the loyalty rewards ban with the federal Competition Bureau.