Recent amendments to Quebec’s Bill 15 (Professional Code and related provisions) introduce important changes to the regulatory framework governing private-label generic drug companies.
These amendments, adopted during the third reading of the bill, reflect a significant policy shift and introduce stricter conditions for the creation and operation of pharmacist-related private-label entities.
Higher Threshold to Establish Private-Label Companies
A key change is the introduction of a minimum threshold of 100 pharmacists required to establish a private-label company. This marks a substantial increase from the previously contemplated threshold of 10 pharmacists and considerably raises the bar for new market entrants.
New Limits on Sales Concentration
The amended framework maintains an existing rule that limits sales from a single generic manufacturer to a maximum of 50% of a pharmacy’s purchases.
In addition, new restrictions apply specifically to private-label companies owned by groups of pharmacists:
- A private-label company may not sell more than 3% of its total sales volume (in dollar value) to any individual pharmacy;
- This 3% cap must also remain within the broader constraint that it cannot exceed 50% of a pharmacy’s total purchases.
These measures are intended to limit concentration risk and reduce the potential for preferential supply arrangements between affiliated entities.
Structural Requirement: Link to a Wholesaler
Another important element is the requirement that private-label companies must:
- Either operate as a subsidiary of a wholesaler, or
- Hold an ownership interest in a wholesaler.
This condition aligns private-label activities with established distribution structures within the pharmaceutical supply chain.
Ministerial Discretion Based on Public Interest
The legislation also confirms that the Minister of Health retains discretionary authority to refuse the listing of any new private-label company based on “public interest” considerations. This provision introduces an additional layer of regulatory oversight and flexibility in assessing new market entrants.
What This Means for the Market
Taken together, these amendments significantly tighten the framework governing private-label generic drug companies in Quebec.
While pharmacist participation in private-label models remains permitted, it is now subject to more stringent conditions aimed at:
- Increasing barriers to entry
- Limiting sales concentration
- Strengthening alignment with existing distribution structures
- Preserving regulatory oversight in the public interest
These changes are expected to shape the evolution of the private-label market and influence how participants structure their operations in Quebec going forward.