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The Supreme Court of Canada agreed on Thursday to hear a challenge to Ontario's ban on pharmacy chain-labelled generic drugs, a ruling that could boost the fortunes of Shopper's Drug Mart and other Canadian pharmacy chains.

Shoppers, and closely held Katz Group, are challenging provincial regulation from 2010 that forbids them and other Canadian drug stores from selling their own private-label drugs.

Part of a package of regulatory changes that have weighed on pharmacies' earnings, the rule was upheld by Ontario's highest court in December 2011, and has kept Shoppers from selling its Sanis private-label drugs in the province, its biggest market.

The Supreme Court could hear the appeal as early as this fall.

In a release, Shoppers said it was pleased with the outcome.

A Supreme Court ruling against Shoppers and Katz could inspire similar bans in other provinces, which have already followed Ontario's lead in cutting prices for generic drugs.

But a decision in the companies' favour would help offset the impact of those price cuts, which along with changes in reimbursement rules have weighed on earnings.

- with files from Reuters