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Federal Court quashes Import Ban against Apotex companies

On October 14, 2015, the Federal Court quashed the Minister of Health (“Minister”)’s Import Ban against Apotex and certain related companies (collectively “Apotex”) on the basis that the Minister issued it for an improper purpose and denied Apotex procedural fairness: Apotex Inc v Minister of Health, 2015 FC 1161.

As previously reported, the Import Ban prevented Apotex from importing into Canada drug products from two of Apotex’s manufacturing facilities in India, Apotex Pharmachem India Pvt Ltd (APIPL) and Apotex Research Private Limited (ARPL). A related issuance of four “EL” letters purported to amend Apotex’s establishment licences, prohibiting import of all products apart from those deemed medically necessary.

Facts

Justice Manson made the following factual findings.

As a result of inspections carried out on APIPL by the US Food and Drug Administration (“FDA”) and the issuance of a Form 483 noting that APIPL failed to comply with US Good Manufacturing Practice (“GMP”) requirements, an Import Alert was issued by the FDA on all but one of the facility’s products. This led to a request from Health Canada that Apotex stop selling drugs containing active pharmaceutical ingredients (“APIs”) made by APIPL until Health Canada was provided with evidence of GMP compliance. Apotex responded by indicating that Health Canada had no basis to request that it cease sale of such products and also invited Health Canada to conduct its own inspection of APIPL.

To address the regulatory concerns raised, Apotex agreed to retest all APIs received from APIPL in Canada for quality assurance. Shortly thereafter, Apotex received a “warning letter” from the FDA, a copy of which was also sent to Health Canada, advising that APIPL’s “corrective and preventative actions continued to be insufficient to prevent recurrence of GMP deviations.” Health Canada then conducted a joint inspection of APIPL with Australia’s regulatory body to confirm whether APIPL was complying with the measures it undertook in response to the FDA’s Import Alert. According to evidence filed by Health Canada on the application, “the deficiencies noted are not critical [and do not] require immediate action to be taken.”

Another Apotex manufacturing facility, ARPL, was also dealing with similar issues at this time, including an FDA Import Alert and a request from Health Canada that Apotex voluntarily quarantine all products made by the facility, which it did for a brief time.

In the fall of 2014, the media reported on the issues and the manner in which Health Canada was addressing the matter: “the articles and editorials [were] highly critical of Health Canada and the Minister, portraying them as inept in comparison to the FDA, particularly in their regulatory approach towards Apotex, and attacking them for failing to protect the health of Canadians against suspect drugs.” The intense media scrutiny led to “vigorous questioning of the Minister in the House of Commons” and “an immediate reaction at Health Canada and in the Minister’s Office.”

As a result of a teleconference with the FDA, Health Canada was apprised of “new information” that it claimed “formed the basis for their regulatory action and resulting Import Ban of products from APIPL and ARPL.” The very next day, on September 30, 2014, and without notice, Health Canada advised Apotex that the Canadian Border Services Agency had been instructed to immediately restrict the import of drugs from the Indian manufacturing facilities. That same day, Apotex was also informed of the Import Ban by a call from Health Canada, press releases were issued by Health Canada and the Minister, and a list of the banned products was posted on Health Canada’s website. Prior to this time, Health Canada had not provided Apotex with any indication that the regulatory concerns with APIPL or ARPL could result in an Import Ban.

Judicial review application

Apotex commenced the judicial review application seeking, among other things, to have the Import Ban quashed.

The Court held that the Minister did not afford Apotex adequate procedural fairness:

  1. the Minister was procedurally unfair as she did not provide Apotex with any notice and deprived Apotex of an opportunity to be heard before the Import Ban was imposed unilaterally, thus denying Apotex the basic procedural rights required in the circumstances;
  2. there was no demonstration of a reasonable apprehension of bias, either from a lack of independence or impartiality; and
  3. the evidence demonstrated that the Minister acted for an improper purpose:

    “The above facts suggest that the Import Ban was motivated by the Minister’s desire to ease pressure triggered from the media and in the House of Commons – a purpose falling outside her delegated authority …. The Minister’s actions were therefore ultra vires and she erred in her exercise of jurisdiction by implementing an Import Ban …”

While unnecessary to consider whether the Minister acted beyond/without legislative authority in view of the above findings, the Court proceeded to make comments on this issue, stating that “the Minister used the correct statutory mechanism to add terms and conditions to Apotex’s ELs. However, in the present circumstances (when the Minister imposes terms and conditions on an existing EL under subsection C.01A.008(4)), the most basic procedural protections, like notice and reasons for imposing the new terms and conditions, should be afforded.”

The Court also held that the Minister’s decision was neither reasonable nor correct as it was motivated by an improper purpose and did not afford Apotex the procedural protections required by law, and it therefore quashed the decision. The Court held that the public statements made by the Minister and Health Canada in relation to the Import Ban were similarly invalid and thus ordered them to be retracted.

 


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