Costco Canada has been fined $7.45 million for allegedly charging pharmaceutical suppliers to stock their products in its pharmacies.
The fine, levied against Costco subsidiary CWC Pharmacies (Ontario) ltd., was announced last week after a three-year investigation by the Ontario Ministry of Health and Long-Term Care into the payments. The provincial government says such rebates artificially inflate the price of drugs to consumers.
Costco responded that it honestly believed at the time that the “advertising programs” were not illegal, and said it used the money raised to “reduce dispensing fees and drug markups” to consumers, reports the Toronto Star.
The fine applies to payments made between 2013 and 2015. Costco says it contacted the ministry in 2015 to confirm that the payments were legal, and the ministry acknowledged that Costco halted the payments while the review was underway.
In January 2018 two Costco pharmacy directors admitted they solicited more than $1.2 million in fees for advertising services from generic drug manufacturer Ranbaxy. The pair were fined $20,000 each, and charges were dropped as part of the settlement.