An Ontario court ruling could allow Shoppers Drug Mart to sell its discount branded drugs in place of name brand products.

The ruling challenged an Ontario government regulation that barred Shoppers and other chains from substituting their private-label prescription drugs. 

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Shoppers Drug Mart could resume its plans to introduce sales of private-label drugs in Ontario. ((Peter Jones/Reuters))

In a written decision, Ontario Superior Court of Justice Divisional Court judges Larry Whalen, Anne Molloy and Katherine Swinton said the private-label drug ban "interferes with the right to trade and commercial freedom, without specific authority to do so."

The ruling does not prevent chains from using no-name generic versions of popular drugs.

"While we are encouraged by this decision, we assume that all parties are reviewing the ruling and considering their options/next steps," Shoppers spokeswoman Lisa Gibson said in an email Friday.

"Accordingly, we do not wish to discuss the matter further at this time."

The provincial government introduced the ban as parts of Ontario's reforms aimed at reducing drug costs.

The decision could allow Shoppers to resume its plans to introduce the sale of private-label drugs.

"I definitely think it is positive, because other pharmacies have wanted to pursue the same avenue because they are all being pressured with this new drug plan, and so one of the ways to get around it is generic drugs," Brian Yarbrough, a retail analyst at Edward Jones in St. Louis, Mo. said. "It will probably be some potential for lower costs for consumers," he said.

It is too early to call the decision a victory for Shoppers but the ruling was in the company's favour, Yarbrough said.

Ontario's Ministry of Health and Long-Term Care could appeal the decision.

With files from CBC's Scott Anderson, The Canadian Press